Council Regulation (EC) No 1264/2006 of 21 August 2006 terminating the investigations concerning the anti-dumping measures applicable to imports of silicon carbide originating in the Russian Federation and Ukraine and imposing a definitive anti-dumping duty on imports of silicon carbide originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EC) No 384/96
Date: 2006-08-21
Institutions: Council of the European Union
Subjects: China, Russia, Ukraine, anti-dumping duty, anti-dumping measure, import (EU), originating product, semi-metal

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1264/2006

of 21 August 2006

terminating the investigations concerning the anti-dumping measures applicable to imports of
silicon carbide originating in the Russian Federation and Ukraine and imposing a definitive anti-
dumping duty on imports of silicon carbide originating in the People's Republic of China following
an expiry review pursuant to Article 11(2) of Regulation (EC) No 384/96

THE COUNCIL OF THE EUROPEAN UNION,

Decision 94/202/EC (4), accepted an undertaking offered
by the Government of Russia, in conjunction with V/O
Stankoimport, Moscow, Russia.

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1)
(the
basic Regulation) and in particular Articles 11(2) and 11(3)
thereof,

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

Whereas:

1. PROCEDURE

1.1. Previous investigations, measures in force and

on-going investigations

(1)

By Regulation (EC) No 821/94 (2), following an expiry
review in accordance with Article 14 and 15 of Regu-
lation (EEC) No 2423/88 (3), the Council prolonged the
imposed definitive anti-dumping duties on imports of
silicon carbide (SiC) originating in the People's Republic
of China (PRC), Poland, the Russian Federation (Russia)
the Commission, by
and Ukraine. At

the same time,

(2)

(3)

(4)

In May 2000, by Regulation (EC) No 1100/2000 (5), the
Council again prolonged the definitive anti-dumping duty
on imports of SiC originating in the PRC, Russia and
Ukraine following an expiry review and also prolonged
the undertaking offered by the Russian government in
conjunction with V/O Stankoimport, Moscow, Russia
accepted by Commission Decision 94/202/EC.

The investigation mentioned in recital 1 leading to the
imposition of definitive anti-dumping duties and the
acceptance of undertakings
from certain exporters
concerned by this investigation, and the expiry reviews
concluded in 1994 and 2000 mentioned in recitals 1
and 2 will hereinafter be referred as to ‘the original
investigations’.

In 2004, by Regulation (EC) No 991/2004, the Council
the exemption from the anti-dumping
provided for
duties of
imports into the new Member States that
acceded to the European Union on 1 May 2004 (the
EU-10) made under the terms of special undertaking
offers (enlargement undertakings), and authorised the
Commission to accept those enlargement undertakings.
On this basis, by Decisions 2004/498/EC (6)
and
2004/782/EC (7), the Commission accepted the under-
takings offered by the Ukrainian exporting producer
Open Joint Stock Company ‘Zaporozhsky Abrasivny
Combinat’. The acceptance of this undertaking expired
on 20 May 2005.

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(4) OJ L 94, 13.4.1994, p. 32.
(5) OJ L 125, 26.5.2000, p. 3. Regulation as amended by Regulation

(2) OJ L 94, 13.4.1994, p. 21. Regulation as last amended by Regu-

(EC) No 991/2004 (OJ L 182, 19.5.2004, p. 18).

lation (EC) No 1786/97 (OJ L 254, 17.9.1997, p. 6).

(3) OJ L 209, 2.8.1988, p. 1.

(6) OJ L 183, 20.5.2004, p. 88.
(7) OJ L 344, 20.11.2004, p. 37.

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following a

In January 2004 the Commission initiated a partial
interim review (8) requested by Zaporozhsky Abrasivny
the Ukrainian exporting producer. The
Combinat,
applicant had alleged that
significant
change of circumstances it should be granted market
economy treatment (MET) and that its dumping margin
was significantly below the level of the measures in force.
However, following an investigation,
it was found that
the company did not meet the criteria to be granted MET
(Article 2(7)(c) of Regulation (EC) No 384/96 and the
investigation was
through
subsequently
Council Regulation (EC) No 779/2005 (9).

terminated

Finally, on 30 June 2005 (10), the Commission initiated
an anti-dumping proceeding concerning imports of SiC
originating in Romania, further to a complaint lodged by
(CEFIC) on
the European Chemical
behalf of producers representing 100 % of
the total
Community production of SiC. However, further to the
withdrawal of the complaint by CEFIC on 1 March 2006,
the
by Commission
Decision 2006/423/EC (11).

investigation was

Industry Council

terminated

1.2. Request for an expiry review

(9)

(10)

(11)

Following the publication of a notice of
impending
expiry of the anti-dumping measures in force of SiC
originating in the PRC, Russia and Ukraine (12),
the
Commission received, on 24 February 2005, a request
to review these measures pursuant to Article 11(2) of the
the Commission
basic Regulation. At
the
received also a request
product
to
measures
concerned originating in Russia pursuant
to Article
11(3) of the basic Regulation.

to review the form of
of

the same time,

applicable

imports

the

after

determined,
that

consulting
sufficient evidence existed for

the Advisory
Having
Committee,
the
initiation of an expiry review pursuant to Articles 11(2)
and an interim review pursuant to Article 11(3) of the
basic Regulation, the Commission initiated both reviews
on the same date (13).

1.3. Investigation

the

advised

officially

importers,

exporting
The Commission
producers,
raw material producers, users
known to be concerned and their associations, the repre-
sentatives of the exporting countries and the Community
producers of the initiation of the expiry and the interim
review. 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.

in one of

the basic Regulation,

the large number of Chinese exporting
In view of
producers and importers in the Community not related
to an exporting producer
the countries
concerned, it was considered appropriate, in conformity
with Article 17 of
to examine
In order to enable
whether sampling should be used.
the Commission to decide whether
sampling would
indeed be necessary and,
if so, to select a sample, the
above parties were requested, pursuant to Article 17(2) of
the basic Regulation, to make themselves known within
two weeks of the initiation of the proceeding and to
provide
information
Commission with
requested in the notice of initiation.

the

the

(12) No Chinese exporting producer submitted the requested
cooperated in the present
information and none
proceeding. It was thus decided that sampling was not
necessary with regard to the Chinese producers.

(5)

(6)

(7)

(8)

These requests were lodged by the European Chemical
Industry Council on behalf of producers representing
100 % of the total Community production of SiC. The
request for an expiry review 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
for an interim
the Community industry. The request
the form of
review was based on the fact
the
measures would be
and would not
eliminate the injurious effects of the dumping.

that
inappropriate

(13)

(8) OJ C 3, 7.1.2004, p. 4
(9) OJ L 131, 25.5.2005, p. 18.
(10) OJ C 159, 30.6.2005, p. 4.
(11) OJ L 168, 21.06.2006, p. 37.
(12) OJ C 254, 14.10.2004, p. 3.

Six unrelated importers in the Community provided the
initiation and
information requested in the notice of
expressed their willingness to cooperate in the further
investigation. From the
three
companies were
sample. These
importers represented the largest representative volume
of
in the Community
(98 %), which could be investigated within the time
available.

imports of known importers

six importers,
the

above
for

selected

(13) OJ C 129, 26.5.2005, p. 17.

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(14) Questionnaires were therefore sent to the three sampled
Community importers, to two Community producers, to
18 Community users, to 16 raw material suppliers and
to the two known exporting producers in the Ukraine
and in the Russian Federation. In addition, two producers
in Brazil, which was selected as the potential analogue
country, were contacted and received a questionnaire.

(17)

The investigation regarding the likelihood of a conti-
nuation or recurrence of dumping and injury covered
the period from 1 April 2004 to 31 March 2005 (inve-
stigation period or IP). The examination of the trends
relevant for the assessment of a likelihood of a conti-
nuation or recurrence of injury covered the period from
1 January 2001 up to the end of
the IP (period
considered).

(15)

Full replies to the questionnaires were received from the
three sampled Community importers, seven users, two
raw material producers and two exporting producers in
the countries concerned, as well as from two producers
in the analogue country.

(16)

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

the premises of

Community producers:

— Kollo Silicon carbide BV (Netherlands), ESK-SIC

GmbH (Germany),

— Navarro SiC, SA (Spain);

Producers in the exporting countries:

— JSC Zaporozhsky Abrasivny Combinat, Zaporozhsky

(Ukraine),

— JSC Volzhsky Abrasive Combinat, Volzhsky (Russia);

Producers in the analogue country:

— Saint-Gobain Materials Cerámicas Ltda, Minas Gerais

(Brazil),

— Treibacher Schleifmittel Brasil Ltda, Sao Paolo (Brazil);

Importers in the Community:

— Imexco-Ullrich GmbH (Germany),

— Smyris Abrasivi (Italy);

Users the Community:

— Morganite Crucible Limited (United Kingdom),

— TGA Ltd (Czech Republic).

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

to this disclosure. The

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(19)

The product concerned is the same as that in the original
investigations which led to the imposition of measures
currently in force,
i.e. SiC. SiC is currently classifiable
within CN code 2849 20 00.

(20)

SiC is produced by heating silicon and coke
(or
petroleum coke) at high temperatures (up to 2 000 °C).
The output of this process is crude SiC which is usually
further processed for its final end-uses. The production
the output automatically
process of SiC is such that
comprises
related to different
content concentration of silicon. The different grades
can be segregated into two main grades: crystalline and
metallurgical. The crystalline grade is considered to be of
higher quality because it has higher silicon content. The
crystalline grade is further classified under the types black
and green.

a variety of grades

(21)

The crystalline grade is normally used in the manufac-
turing of abrasive tools, grinding wheels, high-quality
refractory products, technical ceramics, while the metal-
lurgical grade is normally used in foundry and blast-
in the
furnace operations as a silicon carrier. As
previous
to be
both grades have
considered as forming one product for the purpose of
this investigation.

investigations,

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2.2. Like product

(27)

(22) As established in the original investigations, the current
investigation confirmed that the product concerned and
the products manufactured and sold by the exporting
producers on their domestic markets, as well as those
manufactured and sold by the Community producers
on the Community market and by the producer in the
analogue
the
analogue country have the same basic physical and
chemical characteristics and end uses and are therefore
considered to be like products within the meaning of
Article 1(4) of the basic Regulation.

country on the domestic market of

concerned.

the size of

its domestic market makes Brazil a
First,
representative country for the establishment of normal
two countries
value
Second,
the
for
domestic prices
in Brazil are governed by normal
market forces given the level of demand in the market
and the existence of competing producers. Third, the
basic physical and chemical characteristics of the like
product produced in Brazil can be considered to be
identical
two
countries concerned. Finally, no arguments against the
use of Brazil as an analogue country were put forward.

exported from the

to the product

3. LIKELIHOOD OF A CONTINUATION AND/OR
RECURRENCE OF DUMPING

3.1. Preliminary remarks

(23)

In this expiry review,
full cooperation from the two
known producers in Ukraine and the Russian Federation
was obtained. However, as mentioned in recital 12, no
producer came forward from the PRC.

(28)

Therefore it was concluded that Brazil was a reasonable
and appropriate choice as an analogue country in order
to establish normal value for imports of SiC originating
in the PRC and the Ukraine.

3.2.2. Normal value

3.2.2.1. N o r m a l

p r o d u c e r s
U k r a i n e

v a l u e
i n

t h e

f o r

e x p o r t i n g
t h e

P R C a n d

3.2. Dumping of imports during the investigation

period

3.2.1. Analogue country

(29)

It was first examined whether the domestic sales by the
Brazilian producers, overall and per product type, were
made at volumes which were representative as compared
to the volumes exported by the PRC and the Ukraine
respectively.

(24)

Since the Ukraine (14) and the PRC were not considered
as market economy countries during the investigation
period (and in the preceding investigations), normal
value had to be established in accordance with Article
2(7)(a) of the basic Regulation, i.e. based on information
obtained in a market economy third country where the
product was produced and sold domestically. Moreover,
it is recalled that the exporting producer in Ukraine had
not been able to obtain MET in an interim review which
was concluded just before the initiation of this expiry
review (see recital 5).

(25)

In the initiation of this expiry review, it was envisaged to
use Brazil as an analogue country from where infor-
mation about production costs and domestic sales
could be obtained.
is recalled that Brazil has also
been used in the previous expiry review.

It

(26)

The investigation has confirmed that Brazil
is still an
appropriate analogue country for the following reasons:

(14) The Ukraine was granted Market Economy Status through Council
Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17). The
new status only applies to investigations initiated as from 1 January
2006.

(30)

It was found that the volumes of domestic sales by the
Brazilian producers exceeded considerably the export
sales to the Community by exporting producers in the
PRC and the Ukraine, both overall and by product type.

(31)

(32)

It was then examined whether the domestic sales of each
of the two cooperating producers in Brazil, Saint-Gobain
Materials Cerámicas Ltda and Treibacher Schleifmittel
Brasil Ltda, to independent customers had been made
to Article
in the ordinary course of
2(4) of the basic Regulation.

trade, pursuant

for both companies,

It was found that,
the weighted
average selling price of all sales during the IP, was
higher than the weighted average unit cost of production.
Therefore, all domestic sales were regarded as having
been made in the ordinary course of trade. In addition,
in order to ensure a fair comparison between prices in
Brazil and normal value in the PRC and the Ukraine,
adjustments were made in order to take into account
of any differences in PCN or level of trade.

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(33)

In accordance with Article 2(1) of the basic Regulation,
normal value was based on the weighted average prices
of
the two Brazilian producers' sales to independent
customers on their domestic market.

the
concerned, normal value was calculated as
average price of all domestic sales of the product
type in question irrespective of whether these sales
were profitable or not.

(34)

Subsequent to the definitive disclosure, CEFIC questioned
the accuracy of the determination of the normal value
claiming that according to their information, sales prices
in the Brazilian domestic market were above the export
price from the Ukraine to the Community market.
However, this claim was not supported by substantiated
documentary evidence and had to be rejected. Indeed, the
adjustments mentioned in recital
(32) above allowed
ensuring fair calculation of normal value.

3.2.2.2. N o r m a l

V a l u e

f o r

e x p o r t i n g

p r o d u c e r s i n R u s s i a

(35)

It was first examined whether the volumes, overall and
per product type, of domestic sales by the exporting
i.e. represented
producer in Russia were representative,
at least 5 % of the volumes exported to the Community.

(36)

(37)

It was found that, compared to the overall volume of
sales, and for some of the product types, the volume of
domestic sales represented at least 5 % of the volumes
exported to the Community. For those product types
where the volume of domestic sales was less than 5 %
of the volumes exported to the Community, the normal
value had to be constructed pursuant to Article 2(3) of
the basic Regulation.

For those product types where the volumes of domestic
sales represented 5 % of the volumes exported,
it was
examined whether the domestic sales of
the Russian
producer to independent customers had been made in
the ordinary course of trade, pursuant to Article 2(4)
of the basic Regulation. This was done by establishing
to independent
the proportion of domestic
customers, of
the product
each exported type of
concerned, not sold at a loss on the domestic market
during the investigation period.

sales

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

(c) For those product types where less than 10 %, by
volume, was sold on the domestic market at a
price not below unit cost,
it was considered that
the product
type concerned was not sold in the
trade and therefore, normal
ordinary course of
value had to be constructed in accordance with
Article 2(3) of the basic Regulation.

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

3.2.3. Export price

PRC

(39) As mentioned in recital 12, no exporting producers in
the PRC cooperated in the investigation. As a result,
export prices had to be established on the basis of
facts available in accordance with Article 18(1) of the
basic Regulation, i.e. information in the complaint.

(a) For those product types where more than 80 %, by
volume, of sales on the domestic market were not
below unit costs, i.e. where the average sales price of
the product type concerned was equal to or higher
than the average production cost for the product type

(40)

The export prices for exporting producers in Ukraine and
Russia were established in accordance with Article 2(8) of
the basic Regulation, on the basis of export prices
actually paid or payable by independent customers in
the Community.

Ukraine and Russia

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(41) When calculating the export price for

the Russian
exporter for those transactions which were handled by
Stankoimport (i.e.
imported AD-free under the Quanti-
tative Undertaking (QT)), all expenses incurred as a result
of Stankoimport's involvement have been deducted in
order to arrive at the export price at ex-works level.

(47)

(42)

CEFIC contested the findings with regard to the export
prices determined for Ukraine arguing that prices charged
for Ukrainian imports would be much lower. In support
of their claim, they submitted certain price offers. This
claim, however, had to be rejected as price offers can not
be taken into consideration without proof that the trans-
action(s) finally materialised. In any event, as mentioned
at recital 40, export prices retained for dumping calcu-
lation were those charged by the exporting producer
concerned. These prices were verified during the on
spot
the company
concerned.

the premises of

investigation at

Russia

It is recalled that Russia has a QT since 1986. The QT
has enabled one Russian importer, Stankoimport,
to
import into the Community a fixed quantity (fixed in
into the Community
% of Community consumption)
free of
this
threshold have been subject to anti-dumping duties. In
the dumping calculations performed, no distinctions have
been made between those quantities which were exported
through the QT (77 %) and those which were subject to
the antidumping duty (23 %).

anti-dumping duties. Quantities

above

(48)

The dumping margin for exports of SiC from Russia
during the IP was found to be below the de minimis
threshold of Article 9(3) of the basic Regulation.

3.2.4. Comparison

(43)

The normal values and the export prices were compared
on an ex-works basis. In accordance with Article 2(10) of
to achieve a fair comparison
the basic Regulation,
export price,
between the normal value
and the
adjustments were made in respect of
transport costs,
trade and packing cost which were claimed
level of
and demonstrated to affect prices and price compa-
rability.

3.3. Developments of imports should measures be

repealed

3.3.1. PRC

(49) As has already been explained, no exporting producers
cooperated in this investigation. Thus, the likely scenario
of what would happen if measures were allowed to lapse
the
has been based on facts available,
complaint and data from Comext (Comext is an elec-
tronic database of foreign trade of the European Commu-
nities).

in particular

3.2.5. Dumping margin

(44)

In accordance with Article 2(11) and (12) of the basic
Regulation, the dumping margin was established on the
basis of a comparison of the weighted average normal
value of each product type with the weighted average
export price of the corresponding type.

(50)

PRC

(45) On the basis of facts available, in accordance with Article
18(1) of the basic Regulation,
information in the
complaint, the dumping margin has been established in
the same order as the previous investigation, i.e. around
50 %.

i.e.

Relationship between Chinese export prices to third
countries and the price level in the Community

The main third countries to which Chinese exports were
directed during the IP were the United States of America
and Japan. Information in the complaint suggests that
Chinese cif-prices to the United States of America, for
the grade ‘Macro Black’, expressed in euro, were in the
range of EUR 650/tonne. Moreover, Chinese cif-prices to
Japan for the grade ‘Macro Green’, expressed in euro,
were in the range of EUR 770/tonne. Price statistics
published in business journals supports the accuracy of
these price quotations by Chinese exporters.

Ukraine

(46)

The dumping margin for exports of SiC from Ukraine
during the IP was found to be below the de minimis
threshold of Article 9(3) of the basic Regulation.

(51) Moreover,

it was found that the average export prices
from the PRC to the United States of America, as
obtained from the Comext database, were significantly
below the normal value obtained from the analogue
country in this investigation, which indicates that these
exports may also have been made at dumped prices
during the investigation period.

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‘Macro Green’)

(52) Given that the average price of the Community Industry
(around EUR 1 000 ‘Macro Black’ and around EUR 1 500
for
considerably higher, Chinese
exporting producers would, in the absence of measures,
have an important incentive to divert significant export
quantities from their present third country markets to the
Community market.

is

(53)

concerned to the EU were

It should also be recalled that Chinese exports of the
found to be
product
dumped in the original
investigation and continued to
be dumped at the same high levels during the IP of
the current investigation. There is no reason to believe
that this behaviour would change.

likely start to utilise their significant unused capacity for
exports to the Community.

3.3.2. Russia

(58) As the only known exporting producer in Russia has
cooperated in this investigation, the likely scenario of
what would happen if measures were allowed to lapse
has been mainly based on information supplied by the
exporting producer's verified reply to the questionnaire.

Relationship between prices in the Community and
prices within Russia

(54) Moreover, the information available on normal value and
prices to third countries, as explained above, supports the
conclusion that
if measures
would lapse, Chinese exporters would continue their
dumping practises.

there is likelihood that,

(59)

It should first be mentioned that the prevailing price level
within the Community is already subject to a significant
influence from imports from Russia given the QT in
place, as
is already satisfying
the Russian exporter
around 10 % of Community consumption.

To conclude, there is likelihood that, should measures be
repealed, Chinese exports which at present are destined
to the
to third
Community. Moreover, should measures be repealed,
there is a clear
the quantities
exported.

risk for dumping of

country markets

redirected

are

Unused capacities and stocks

the price level

in the Community,

(60) When comparing the prevailing price level on the
in Russia with the prevailing price
domestic market
level
in Russia is
generally lower. However, given that the quantities that
the Russian producer has been able to export free from
antidumping duties under
the
Russian producer has had an incentive to export the
crystalline grades (triggering higher prices per tonne) to
the Community,
its
domestic market and for other destinations). Therefore
if
the real price differential between the same grades,
any, would be
comparison
between average price levels suggests.

leaving metallurgical grades

the QT were pre-set,

than what

smaller

for

a

(55)

(56)

In the request for this review, CEFIC (referring to infor-
mation collected and published in business journals) has
estimated the total production capacity in the PRC to be
between 600 000 and 700 000 tonnes. The actual
production has been estimated to be around 440 000
tonnes, leaving an unused capacity of between 160 000
and 260 000 tonnes. There is no information about
stocks.

(61)

To conclude, while the generally higher price level in the
Community would normally trigger an increase in
exports to the Community should measures be allowed
to lapse, this scenario does not appear to be likely in the
present case. Indeed, given the existence of the QT, the
potential increase of imports of especially high-grade SiC
should not be overestimated as the Russian exporter
already has had the opportunity to export significant
quantities of SiC and has had the incentive to export
high-grade SiC. Thus, an increase of imports of SiC is
likely to be limited both in quantities and in types of SiC
(metallurgical grades) and would in any event in all like-
lihood not be at dumped prices.

(57) On the basis of the above,

it is clear that exporting
producers in the PRC have a significant spare capacity
to utilise for increased production. To conclude, should
measures be repealed, exporting producers would very

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Relationship between export prices to third coun-
tries and prices within Russia

sold on its main export market, the United States, to
the Community market, should measures be repealed.

(62) More than 75 % of the exports to third countries by the
Russian producers are destined for the United States of
America. When comparing the domestic prices and the
export prices to the United States of America, the price
levels of the exports to the United States of America are,
on average, higher. It should be recognised, however, that
the mix of grades of the products sold for export and
those sold on the domestic market are probably different
(likelihood of exports containing higher value-per-tonne
grades to cover the transport costs involved), which
makes it difficult
to draw conclusions from such a
comparison. Nevertheless, it is noted that these exports
are not subject to antidumping measures and that there
are no indications that such exports would be dumped.

Relationship between export price to third countries
and the price level in the Community

(63) When comparing the Russian exporter's export prices to
the United States of
its main third country market,
America, with the Russian exporter's export prices to
the Community market,
the
it
QT in place. As explained above, given the pre-set quan-
tities that the Russian exporter has been able to export to
the EC, it has had an incentive to export high value-per-
tonne grades to the Community market.

is important

to recall

(64)

Similarly and as explained in recital 62,
it can be
assumed that also the exports to the United States of
America, given the transport costs involved, contain
mainly high value-per-tonne grades. Thus, this puts the
average selling price to the Community market and to
the United States market on a reasonably comparable
basis.

Unused capacities and stocks

(67)

the exporting producer in Russia is
The capacity of
limited to 62 000 tonnes. During the IP, it was found
to work close to full capacity, having increased its utili-
sation rate during the reference period. The stocks were
found to be normal for this kind of business.

(68) Given the technology used by the Russian producer (a
technology using train cars as places of processing, which
are marshalled between electricity installations and places
for unloading/sorting),
it is unlikely that the exporting
producer would be able to expand in the near future.

(69)

To conclude, should measures be allowed to lapse, there
are no indications that the Russian producer would be
able to increase its production in order to increase its
exports to the Community.

3.3.3. Ukraine

(70) As the only known exporting producer in the Ukraine
has cooperated in this investigation, the likely scenario of
what would happen if measures were allowed to lapse
has been mainly based on information supplied by the
exporting producer's verified reply to the questionnaire.

(65) Having compared the average selling price to the
Community market with the average selling price to
the market of the United States of America, the prices
to the United States market have been found to be, on
average, higher.

Unused capacities and stocks

(71)

The capacity of the exporting producer in Ukraine is
limited to 23 000 tonnes. During the IP, it was found
to work close to full capacity, having increased its utili-
sation rate during the reference period. The stocks were
found to be normal for this kind of business.

(66)

To conclude, there seems to be no apparent incentive for
the Russian producer to divert its quantities presently

(72) Given the technology used by the Ukrainian producer
(same as the Russian producer which is explained in
recital 68),
exporting
producer would be able to expand in the near future.

is unlikely that

that

the

it

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(73)

the

the

capacity of

exporting
CEFIC claimed that
producer would be as high as 32 000 tonnes. However,
this argument was based on hypothetical
information
without taking into considerations standstill periods for
the
maintenance and repair, nor taking into account
specificities of
concerned
the producing
which is located in an urban area and submitted to
environmental
the
constraints. On these
capacity as established in recital 71 was confirmed and
the claim by CEFIC had to be rejected.

company

grounds,

(79) On the basis of facts available, it was found that Chinese
exporters are still dumping and would be likely to
continue
the
Community market should measures be allowed to lapse.

dumping

practices

towards

their

(80)

it was found that

Therefore,
there is a likelihood of
continuation of dumping by exporting producers in the
PRC should measures be allowed to lapse.

(74)

To conclude, should measures be allowed to lapse, there
are no indications that the Ukrainian producer would be
able to increase its production in order to increase its
exports to the Community.

3.4.2. Ukraine

Relationship between prices in the Community and
prices within the Ukraine and third countries

(81)

It is recalled that the Ukrainian exporter has been found
not to export at dumped prices during the investigation
period and there are no indications that such situation
would change if measures were allowed to lapse.

(75) When comparing the prevailing price level on the
in the Ukraine with the prevailing
to third
in the Ukraine and to third

domestic market
price level
countries, the price level
countries are, on average, lower.

in the Community, and prices

(76) However,

a meaningful

comparison
third country markets

between the
and the
Ukrainian market,
Community market was not possible because
the
product mix is very different and average prices are
therefore not
the domestic
comparable. Moreover,
limited in size and the
market
Ukrainian producer
the
various (high-value) grades as the Community producers.

is not able to produce all

in the Ukraine is

(77)

It could therefore not be established whether, should
measures be allowed to lapse, the Ukrainian exporter
would have an incentive to divert volumes from its
domestic market or from its export markets to the
in view of the findings
Community market. However,
on dumping, and in the light of
the overall higher
price level prevailing in the Community, it is concluded
that, even if exports to the Community market increased,
likelihood not be made at
these exports would in all
dumped prices. Moreover,
the increase would in any
event be limited (estimated at less than 10 000 tonnes),
given the limited capacity of the Ukrainian exporter.

(82)

Furthermore,
it was found that, although exports from
the Ukraine to the Community may increase, should
measures be repealed, such increase is expected to be
limited.
the
Ukrainian producer holds,
this increase of exports to
the Community is assumed to be less than 10 000
likelihood not be made at
tonnes and would in all
dumped prices.

Indeed, given the limited capacity that

(83)

Therefore, it is considered that there is no likelihood of
recurrence of dumping of
imports originating in the
Ukraine.

3.4.3. Russian federation

(84)

It is recalled that during the investigation period, the
Russian producer has been found not
to export at
dumped prices and there are no indications that such
situation would change if measures were allowed to
lapse.

(85)

3.4. Conclusions on likelihood of a continuation or

recurrence of dumping

3.4.1. PRC

(78)

It is recalled that no exporting producers in the PRC have
cooperated in the investigation.

it

is recalled that

Furthermore,
the Russian exporting
producer has been able to supply the Community
market with a fixed quantity of SiC through a QT for
many years. The quantities exported through this channel
have amounted to, during the IP, around 17 % of the
Russian producer's
the Russian
exporting producer is already well established on the
market, i.e. a sudden increase of imports originating in
Russia is therefore highly unlikely.

total capacity. Thus,

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(86) Moreover,

since

the prices

at which the Russian
exporting producer has sold to third countries were
found to be higher than those at which quantities were
sold to the Community, the risk for trade diversion of
significant quantities to the Community market appears
to be relatively small.

— Navarro SiC, SA (Spain).

(93) As above Community producers represent 100 % of the
is
Community production of
concluded that
the complainant producers constitute
the Community industry within the meaning of Articles
4(1) and 5(4) of the basic Regulation.

like product,

the

it

(87)

Finally, it was found that the Russian exporting producer
was working close to full capacity and has a limited
ability to increase its capacity.

(88)

For these reasons, it is considered that there is no risk of
imports originating in the
recurrence of dumping of
Russian Federation.

(94)

5. SITUATION ON THE COMMUNITY MARKET

5.1. Preliminary remarks

The examination of the impact of the imports concerned
on the Community industry included an evaluation of
the economic factors and indices having a bearing on
the state of the industry as listed in Article 3(5) of the
basic Regulation.

(89) Given the

the
proceeding should be terminated against these countries.

for Ukraine

and Russia,

findings

4. DEFINITION OF THE COMMUNITY INDUSTRY

(90)

The structure of the Community industry changed since
the last expiry review, i.e. the former German producer
Elektroschmelzwerk Kempten GmbH, München, split in
two related companies, one located in the Netherlands
and the other in Germany. Only the former is producing
and processing the crude SiC,
the latter one further
processes SiC produced by Kollo Silicon carbide BV but
the final product remains the like product. Moreover,
ESK-SIC GmbH sells its own SiC but also SiC produced
by Kollo Silicon carbide BV Therefore both companies
are considered as forming one group.

4.1. Community production

(91) Within the Community, the like product is manufactured
by two producers which constitute the total Community
production within the meaning of Article 4(1) of the
basic Regulation.

5.2. Consumption in the Community market

(95)

The apparent Community consumption was established
on the basis of the volume of imports of the product
concerned from the countries concerned and all other
in the
sales
and the volumes of
third countries
Community market of the Community industry.

(96)

The volume of imports was determined on the basis of
Eurostat figures corresponding to the relevant CN code
during the period considered.

(97) On this basis, Community consumption has slightly
increased from 217 137 tonnes in 2001 to 226 450
tonnes in the IP,
the
i.e. an increase by 4 % over
period considered. The trend is showed in table 1.

(98)

The consumption trend did however not evolve steadily.
It is noted that it first decreased from 2001 to 2003
where it fell by 10 %. From 2003 onwards, however,
consumption increased again by more than 10 % up to
the IP where it exceeded the level of 2001.

4.2. Community industry

(92)

The following European Community producers have
supported the request:

(99)

— Kollo Silicon carbide BV (Netherlands), with its

related company ESK-SIC GmbH (Germany),

The decrease at the beginning of the period considered is
to a large extent explained by the replacement of SiC by
other products
ferro-silicone and industrial
diamond, which were less expensive at that time.

such as

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(100) From 2003 onwards, however, in line with a price decrease of SiC, consumption increased again.

Table 1

Community consumption (tonnes)

217 137

205 231

194 486

218 919

226 450

Index

100

95

90

101

104

2001

2002

2003

2004

IP

5.3. Volume, market share and prices of imports from the PRC

(101) The volumes and market shares of imports of the product concerned from the PRC developed as set
out in table 2. Since the exporting producer in the PRC did not cooperate, the price and volume
trends were based on information available in accordance with Article 18 of the basic Regulation.
Given that no other more reliable information was available volume trends were based on Eurostat
statistics.

(102) The volume of imports originating in the PRC amounted to 1 205 tonnes and represented a market
share of 0,6 % in 2001. In 2002 the volume of imports increased slightly and reached a level of
1 467 tonnes, corresponding to a market share of 0,7 %, before declining to 651 tonnes during the
IP, corresponding to a market share of 0,3 %.

(103) Prices of imports from the PRC decreased slightly. However, it should be noted that given the low
quantities exported from the PRC, the export prices could not be considered as representative, as they
may relate to very specific product types or very specific customers. Therefore no meaningful
conclusion could be drawn on price trends on the basis of Eurostat figures. However, on the
basis of the information submitted in the complaint regarding prices, it could be established that
Chinese prices (ranging from EUR 624 to 1 814/tonne depending on the grade and the quality) were
undercutting EC prices by more than 30 %.

Table 2

2001

2002

2003

2004

Volume of imports from the PRC (tonnes)

1 205

1 467

1 465

787

IP

651

Market share of imports from the PRC

0,6 %

0,7 %

0,8 %

0,4 %

0,3 %

5.4. Imports from other countries concerned by the present review

(104)

In order to present a complete picture of the situation on the Community market, the trends of
imports of SiC from other countries were also examined. It should be noted, however, that, as regards
prices, the data are not comparable given the differences in the product mix, resulting in huge price
differentials.

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5.4.1. Russia

(105) The evolution of imports from Russia is as follows:

Table 3

2001

2002

2003

2004

IP

Volume of imports from Russia (tonnes)

21 901

24 368

21 061

20 457

21 810

Market share of imports from Russia

10,1 %

11,9 %

10,8 %

9,3 %

9,6 %

Prices of imports from Russia (EUR/tonne)

Index: 2001 = 100

453

100

465

103

477

105

464

102

480

106

(106) The volume of imports from Russia decreased slightly from 21 901 tonnes in 2001, corresponding
to a market share of 10,1 %, to 21 810 tonnes in the IP, corresponding to a market share of 9,6 %.
Average prices of imports from Russia increased by 6,0 % between 2001 and the IP, i.e. from EUR
453/tonne to EUR 480/tonne. A significant volume of imports originating in Russia were made out
of the quantitative undertaking mentioned in recital 2. It is to be reminded that an anti-dumping duty
of 23,3 % was applicable to all imports exceeding the anti-dumping-duty-free quantities fixed by the
before mentioned undertaking.

5.4.2. Ukraine

(107) The evolution of imports from Ukraine is as follows:

Table 4

2001

2002

2003

2004

IP

Volume of imports from Ukraine (tonnes)

4 956

6 760

7 829

8 491

7 718

Market share of imports from Ukraine

2,3 %

3,3 %

Prices of imports from Ukraine (EUR/tonne)

Index: 2001 = 100

504

100

502

99

4 %

469

93

3,9 %

3,4 %

468

96

489

97

(108) The volume of imports from Ukraine increased from 4 956 tonnes in 2001, corresponding to a
market share of 2,3 %, to 7 718 tonnes in the IP, corresponding to a market share of 3,4 %. Average
prices of
from EUR
504/tonne to EUR 489/tonne. Except for a significant percentage of imports made within the
quantitative undertaking mentioned in recital 4 between 2004 and 2005, an anti-dumping duty
of 24 % was applicable to imports originating in Ukraine during the period considered.

imports from Ukraine decreased by 3,0 % between 2001 and the IP,

i.e.

5.5. Imports from other third countries not concerned by the present review

5.5.1. Romania

(109) As mentioned above in recital 6, on 30 June 2005, the Commission initiated an anti-dumping
proceeding concerning imports of
to a
complaint lodged by CEFIC. However, further to the withdrawal of the complaint by the complainant
Community industry this investigation was terminated.

the same product originating in Romania,

further

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(110) The evolution of imports from Romania is as follows:

Table 5

2001

2002

2003

2004

IP

Volume of imports from Romania (tonnes)

14 173

15 694

22 844

38 459

42 387

Market share of imports from Romania

6,5 %

7,6 %

11,7 %

17,6 %

18,7 %

Prices of imports from Romania (EUR/tonne)

Index: 2001 = 100

439

100

468

107

465

106

445

101

456

104

(111) The volume of imports from Romania rose from 14 173 tonnes in 2001, corresponding to a market
share of 6,5 %, to 42 387 tonnes in the IP, corresponding to a market share of 18,7 %. Average
prices of imports from Romania increased by 3,9 % between 2001 and the IP,
i.e. from EUR
439/tonne to EUR 456/tonne.

5.5.2. Norway

(112) The evolution of imports from Norway is as follows:

Table 6

2001

2002

2003

2004

IP

Volume of imports from Norway (tonnes)

60 496

43 400

32 520

38 160

38 550

Market share of imports from Norway

27,9 %

21,1 %

16,7 %

17,4 %

17,0 %

Prices of imports from Norway (EUR/tonne)

Index: 2001 = 100

971

100

919

95

963

99

898

93

973

100

(113) The volume of imports from Norway decreased from 60 496 tonnes in 2001, corresponding to a
market share of 27,9 %, to 38 550 tonnes in the IP, corresponding to a market share of 17,0 %.
Average prices of imports from Norway remained stable between 2001 and the IP, i.e. from EUR
971/tonne in 2001 to EUR 973/tonne during the IP.

5.5.3. Other third countries not mentioned above

(114) The evolution of imports from other third countries not mentioned above is as follows:

Table 7

2001

2002

2003

2004

IP

not

44 473

52 143

48 354

44 804

48 271

Volume
mentioned above (tonnes)

imports

of

from countries

Market share of
mentioned above

imports from countries not

20,5 %

25,4 %

24,9 %

20,5 %

21,3 %

Prices of imports from countries not mentioned
above (EUR/tonne)

Index: 2001 = 100

630

100

618

558

560

552

98

89

89

88

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(115) The volume of

imports

from other

third countries
increased slightly from 44 473 tonnes in 2001, corre-
sponding to a market
to 48 271
tonnes in the IP, corresponding to a market share of
third
21,3 %. Average prices of
countries not mentioned above decreased from EUR
630/tonne in 2001 to EUR 552/tonne in the IP.

imports from other

share of 20,5 %,

5.6. Conclusion

(116) The investigation revealed that imports from Russia and
in terms of market
Ukraine remained relatively stable,
share as well as in terms of average prices. It further
revealed that import quantities of Chinese SiC were too
small to draw any meaningful conclusion on price trends
for SiC of any grade. Therefore, information available to
the complaint, was used and
the Commission,
revealed that Chinese prices were significantly under-
cutting EC prices.

i.e.

(117)

levels

than imports

It also showed that imports from Romania practically
replaced imports from Norway in quantitative terms as
the market share of Romanian imports increased at
from Norway decreased.
similar
While imports
from Norway were made at higher
average prices than those of the Community industry
(EUR 973/tonne) possibly due to the high quality
grades, import prices from Romania were at significantly
lower level (EUR 456/tonne). In this context it has to be
noted, however, that imports from Romania refer almost
exclusively to the less expensive metallurgical grade, so
that no comparison with average prices from other
countries can be made.

(118) As to the development of imports originating in other
it can be noted that the average price
third countries,
followed a decreasing trend, whereas
the quantity
imported into the Community as well as the market
share remained stable during the period considered.

sales of the further processed SiC would be compensated
by any profit or loss made by the first producer in the
captive market, as both producers are considered as one
economic entity.

6.2. Production

(120) Production in volume by the Community industry
increased
considered.
Production went down in 2002, in line with a decrease
of consumption. From 2002 onwards the production
volume evolved positively.

by 4 % during

period

the

6.3. Production capacity and capacity utilisation

rates

(121) After a decrease in capacity utilisation between 2001 and
2002, capacity utilisation rates have slightly increased
since that year and over the period considered by 3
percentage points. As capacity of production remained
unchanged throughout the period considered, this deve-
lopment is in line with the development in production
volume. Capacity utilisation was always above 75 %
during the period considered.

6.4. Sales prices and factors affecting domestic

prices

(122) Unit sales prices of the Community industry increased
slightly between 2001 and the IP (less than 5 %). They
reached an exceptional peak in 2002, but decreased since
then to relatively stable levels slightly above the level of
2001. The peak in the Community's sales prices in 2002
is explained by an increase in production cost during the
same period which the Community industry had to
reflect
sales prices accordingly. Subsequently,
partly due to the decrease in the Community industry's
production cost, partly due to the continued price
pressure on the Community market,
the Community
industry's sales prices decreased again.

in its

6. ECONOMIC SITUATION OF THE COMMUNITY
INDUSTRY

6.1. Preliminary remark

6.5. Stocks

(119) One Community producer sold part of its output to a
related producer which further processed SiC and sold it
as the like product on the free market. In the following
analysis, however, sales between these related parties
have not been taken into account. In particular, it was
considered that any parallel analysis of captive sales and
sales on the free market is not necessary, since sales of
the further processed goods remain sales of
the like
product. Thus,
taking into consideration captive sales
would lead to double counting. Likewise, any profit or
loss made on the free market by the second producer for

(123) Stocks have slightly decreased over the period considered;
i.e. by 1 %, although they increased significantly over the
period 2002-2003 before decreasing to its level of 2001
during the IP. This increase has to be explained by the
decrease in sales volume as explained in recital 124.
From 2003 onwards, stocks decreased not only due to
the increase in sales on the Community market but also
to an increase of the Community industry's export sales.
Notwithstanding this development, it was considered that
the level of stocks has been kept at a very reasonable
level during the entire period considered.

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6.6. Sales volume and market share

6.12. Return on net assets

(124) Sales of the like product by the Community industry on
the Community market have overall declined by 4 %
during the period considered. As Community con-
sumption increased by 4 % during the period con-
sidered, such decrease of sales has been translated in a
loss of market shares of the Community industry i.e.
2,6 %.

(131) Return on net assets was calculated by expressing the
pre-tax net profit of
sold in the
Community as a percentage of the net book value of
fixed assets allocated to the like product sold in the
Community. It showed a similar development as profi-
tability (see recital 132).

the like product

6.7. Investments

6.13. Profitability

(125)

Investments had an increasing trend and doubled over
the period considered.
investments
concerned replacement, and maintenance but also deve-
lopment of products for new applications.

It was found that

6.8. Growth

(126) Overall, it has to be noted that the Community industry's
market shares in the free market fell (see recital 124),
whereas the overall market grew by 4 %. The Community
industry has therefore not been able to participate in the
growth of the market.

(132) Profitability of the Community industry, expressed as a
percentage of net sales, showed a sharp downward trend
from 2001 to 2003, where the already low profit margin
more than halved. Profitability then went up without,
however, reaching its level of 2001. During the IP, the
profits realised by the Community industry represented
slightly more than half of the level reached in 2001. In
2002, the rise in prices could not countervail the rise in
cost of production nor the loss caused by lower sales
volumes. 2003 showed even lower figures as prices
decreased while sales volumes decreased even more. In
2004 and during the
the
IP,
Community industry improved due to an important
rise in sales volume while the price level was stable.

the profitability of

6.9. Employment and wages

(127) Employment decreased by 7 % during the period
considered. Total wages decreased by 2 % during the
period considered. On the other hand the weighted
average salary increased because severance payments
had to be made for laid off workers. Moreover,
in
order to fully benefit
from the investments made in
terms of equipment, skilled workers had to be hired
causing thus an increase in labour cost.

6.14. Magnitude of dumping margin

(133) As concerns the impact on the Community industry of
the actual margin of dumping, no
the magnitude of
meaningful conclusion can be drawn given the low
level of imports from the PRC.

6.10. Productivity

6.15. Recovery from the effects of past dumping

(128) Productivity per employee, measured as output per
increased during the period considered by
employee,
12 %. This improvement
in productivity mirrors the
level of investments carried out in machinery as well as
the reduction of employees.

(134) While

the

indicators
in the

improvement
industry further
in 2000,
measures
trends of
some
Community industry is still
situation.

examined above
situation of

show some
the Community
to the imposition of anti-dumping
they also evidence the negative
the
in a fragile and vulnerable

indicators which show that

6.11. Cash flow, ability to raise capital

(129) Cash flow increased during the period considered by

10 %.

6.16. Conclusion

(130) The Community producers did not face any problems to
raise capital. They financed their activities through loans
from related companies and banks. Self financing was
also used.

the following indicators
(135) Between 2001 and the IP,
sales prices, capacity utilisation
developed positively:
and production volume of
the Community industry
increased while closing stocks decreased slightly. Pro-
ductivity increased significantly.
Investments and cash
flow also showed positive trends.

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(136) Conversely, the following indicators developed negatively:
sales volume decreased, cost of production per tonne and
average
increased while
employment decreased. Profitability and return on net
assets eroded as well.

employee

cost per

labour

(137) Overall,

indicators

the situation of
some

the Community industry is
show positive deve-
mixed: while
lopments, some others show a negative trend.
If one
compares the above trends with the ones described in
the Regulation (EC) No 1100/2000, it is clear that the
the anti-dumping measures in 2000
introduction of
enabled
its
situation, but not
to fully recover from its injurious
situation. Although the Community industry, following
positive
in new
it should be
equipment destined to new applications,
stressed that due to the highly price sensitive market,
its market share and profitability decreased.

the Community

developments,

to stabilise

to invest

industry

started

(138) The Community industry has benefited from a rise in its
unit price of SiC from 2001 to the end of the IP. The
initial rise should have compensated the rise in cost of
production due to the restructuring and the efficiency
related expenses. However,
the increase in the selling
price could not compensate the rise in the cost of
production and profit margins therefore decreased.

(139) Although consumption in the Community increased by
the Community
the period considered,
4 % over
industry's market share decreased by 2,6 %,
the
Community industry was not able to benefit from this
increase in consumption.

i.e.

(140) On the other hand, the Community industry's export
performance improved during the period considered as
its export sales increased significantly over the period
considered;
i.e. by more than 25 %. This development
shows that the Community industry produces a compe-
titive product
successful on third country markets
although in competition with other imports.

(141) When comparing the

situation of

injury indicators,

the Community
industry at the beginning and at the end of the period
considered, a number of
such as
capacity and capacity utilisation,
stocks and market
share are at similar levels. Other indicators, such as
sales volume, cost of production, profitability, return
on investments and employment show clear negative
trends while only few indicators,
i.e. unit sales prices,
investments and cash flow show positive
productivity,
It is therefore concluded that the situation of
trends.

the Community industry although stabilised during the
period considered, as compared to the period preceding
the imposition of measures in 2000, is still in a fragile
situation. In particular, the clear negative trend in profi-
tability which did still not reach an acceptable level
during the IP as well as the decreased market share of
the Community industry indicate that it could not fully
recover from the effects of injurious dumping.

7. LIKELIHOOD OF CONTINUATION OR RECURRENCE
OF INJURY

(142) As explained in recitals 56 to 57,

the exporting
producers in the PRC have the potential to substantially
raise their exports volume to the Community by redi-
recting current export volumes to third countries to the
more attractive Community market and/or by using their
significant spare capacities. Indeed, significant capacities
are available reaching more than 200 000 tonnes which
represents almost 100 % of Community consumption. It
is therefore likely that substantial quantities of Chinese
SiC will penetrate the Community market to regain lost
market share and increase it further should measures be
repealed.

(143) During the whole period under consideration the North
American market continued to be a key area of interest
for PRC. While there is just one crude SiC producer in
North America left with a capacity of 50 000 tonnes, the
consumption in this area is in the region of 250 000
tonnes. The PRC is providing 80 % of imports of US
crude silicon carbide imports and 57 % of SiC grain
imports, followed by Brazil (12 %), Norway (10 %) and
Germany (6 %). Even if PRC would be able to take over
the import share in the US of the other third countries,
the spare capacities
remain
sufficient
to flood the Community market with low
price SiC should measures be repealed. Indeed, the deve-
lopment on the US market where no anti-dumping
duties were in force, will very likely be mirrored on
the Community market should measures be repealed.

in the PRC would still

(144) Since none of

In this regard,
import

the Chinese exporting producers co-
operated, information on the likely Chinese price levels
should measures be repealed was based on information
available in accordance with Article 18 of the basic Regu-
information submitted in the
lation.
information
complaint,
available on the market was used. Thus,
and as
mentioned above in recital 56, the information in the
complaint suggests that export prices to the USA and
Japan for high quality grades were significantly below
the prices for similar grades of the Community industry.

and other

statistics

25.8.2006

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Official Journal of the European Union

L 232/17

(145) This trend was confirmed by other sources of

It

infor-
mation which show Chinese export prices to other
third countries such as the USA and South Africa signi-
ficantly below the export prices to the Community as
recorded in Eurostat, i.e. EUR 540/tonne for crystalline
grades (97 % minimum) and EUR 123/tonne for metal-
lurgical grades.
should be stressed that Chinese
exporters are able to produce and export all kind of
high quality SiC to the EC. The investigation revealed
that one of the most valuable and cost intensive SiC
was
sold to the EC at EUR 1 500/tonne duties
exclusive, which amounts to EUR 2 400/tonne import
duty and AD duty included. Even the latter price is
significantly below the price offered by the Community
producers. In more general terms, Eurostat statistics show
that, historically, export prices
from China to the
Community were very low,
i.e. approximately between
EUR 250 and 500/tonne. Thus, it can be expected that
Chinese SiC would enter the market again at very low
prices if measures lapsed.

8. COMMUNITY INTEREST

8.1. Introduction

(150) According to Article 21 of the basic Regulation, it was
examined whether the maintenance of the existing anti-
dumping measures would be against the interest of the
Community as a whole. The determination of
the
Community interest was based on an appreciation of
all the various interests involved.

(151)

It should be recalled that, in the previous investigation,
the prolongation of the measures was considered not to
be against the interest of the Community. During the
original
investigation, a significant number of the co-
operating users and importers were in favour of the con-
tinuation of the measures.

(146) This can be confirmed by the fact that, in 2006, after the
substantial reduction of the export license fees by the
Chinese authorities,
ranging from EUR 125 to
208/tonne down to EUR 25,8/tonne, export prices to
other third countries for the product concerned were
down to levels which would undercut even more the
current Community industry price level.

i.e.

(152)

In the present proceeding, no cooperating user, no
importer and no raw material producer opposed the
the PRC for
continuation of
reasons outlined below in recitals 153, 159 and 160
to 171.

the measures against

(147) Furthermore,

it is likely that,

in order to be able to
significantly increase their sales, using the huge spare
capacity, and gain a substantial market share in the
Community, Chinese exporting producers will have to
undercut prices of imports from third countries as well.
This will increase price pressure and not only prevent the
Community industry from recovering fully from the past
injury but also lead to a severe deterioration of its still
fragile situation.

8.2. Interest of the Community industry

8.2.1. Impact of the continuation of the measures

(153) Despite the partial recovery of the Community industry
since the imposition of anti-dumping measures in 2000,
it is clear that these measures have not yet fully had the
expected remedial effects on the Community industry.

(154)

(148) For the reasons set out in the above mentioned recitals, it
there is a likelihood that
has been determined that
in
Chinese exporting producers will
significant quantities
to the Community at dumped
prices considerably undercutting the EC prices to regain
lost market shares should measures against the PRC be
allowed to lapse.

resume exports

be

and

avoided

In case measures against imports of SiC originating in the
PRC are maintained, a further price depression on the
Community market would
the
Community industry would be able to reach a reasonable
price level and to improve its financial situation. This is
mainly due to the fact
that the Community industry
invested heavily in processing capacities of certain types
of SiC destined to new applications fields such as diesel
particle filters. This will, in all likelihood, allow them to
increase their sales prices and volume in the future and
to regain lost market share.

(149) Therefore it was concluded that there is a likelihood of
recurrence of injurious dumping should measures against
imports of SiC originating in the PRC be allowed to
lapse.

(155) The Community industry has proven to be a structurally
viable industry. This was confirmed by improved export
performance and it efforts of restructuring.

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Official Journal of the European Union

25.8.2006

(156) For the reasons set out above,

from the measures and further

it can be reasonably
expected that the Community industry will continue to
benefit
recover by
reaching reasonable profit margins. In this light, it was
concluded that it would be in interest of the Community
industry to maintain measures against imports of SiC
originating in the PRC.

8.2.2. Impact of the expiry of the measures

(157)

expected to enter

In contrast, should measures on imports of SiC origi-
nating in the PRC expire, massive imports of Chinese
SiC at dumped prices
the
are
Community market, causing a significant price pressure
on the Community market. Under these circumstances, it
is likely that the Community industry will start again to
suffer injury from increased imports at dumped prices
which will also result in a loss of market shares and a
its economic situation which is still
deterioration of
fragile.
the
In such a scenario,
Community industry is not excluded.

the disappearance of

(158)

It was therefore concluded that it would be in the interest
of the Community interests to maintain measures against
imports of SiC originating in the PRC.

8.3. Interest of importers

(159) As outlined in recital 13 the three sampled importers in
the Community not related to an exporting producer
filled in a questionnaire. These importers represented
the import volumes of known importers in
98 % of
the Community. They opposed the continuation of the
in force against Russia and
anti-dumping measures
Ukraine but did not
take any specific position with
regard to the anti-dumping measures in force against
the PRC.

(160)

It is recalled that
investigation it was
in the original
found that the impact of the imposition of measures
on importers would not be significant. This has been
confirmed by the present
Indeed, since
the imposition of measures, no significant change of
the economic situation of
importers has been found
and this is not expected to change if measures are main-
tained. The verified information submitted by the

investigation.

importers has also shown that they realised reasonable
profit margins despite the anti-dumping duty in force.

(161) On the basis of the foregoing, it was concluded that the
continuation of measures applicable to imports of SiC
originating in the PRC would not have a significant
effect on the situation of importers.

8.4. Interest of users

(162) As outlined in recitals 14 to 16, eighteen users in the
Community representing around 30 % of
the total
Community consumption provided basic information
related to their purchases of the product concerned and
expressed their willingness to cooperate. Finally, seven
users submitted full questionnaire replies, two of which
were investigated on-spot. In this context it has to be
noted that the majority of the cooperating users were
processors, and only one end-user. None of
the co-
operating users took any specific position as regards
the PRC.
the anti-dumping measures in force against

(163) SiC is used in a wide variety of applications and therefore
a large number of user industries are concerned such as
abrasive and polishing applications as well as refractory
segment
In the metallurgical
segment SiC is used as an alloy.

for crystalline material.

(164)

In examining the possible effect of the imposition of
measures on users, it was concluded in the original inves-
tigation that in view of the low level of cooperation and
comments submitted, measures in force did not have a
significant negative impact on their business.

(165) The current review investigation confirmed the findings
as far as SiC originating in the PRC is concerned. Indeed,
the analysis of
the questionnaire replies revealed that
users do not have to expect any cost increase should
measures be maintained. As measures at the same level
are already in force since 1986, the maintenance of these
measures would not change the current situation of the
In any case, since measures against Russia and
users.
Ukraine are
the users
having additional sources of supply, will rather improve.

the position of

terminated,

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Official Journal of the European Union

L 232/19

(166)

It is also recalled that since the imposition of measures
on imports of SiC originating in PRC no significant
change of
the economic situation of users could be
observed.

8.6. Conclusion on Community interest

(172) From the foregoing it was concluded that if measures
would lapse, the situation of the Community industry
would deteriorate, which may even lead to its disap-
pearance.

(167) Certain interested parties claimed that the continuation of
the measures on imports of SiC originating in the PRC
would lead to increased imports of
finished products
using Chinese SiC. However, no such increase has been
observed during the period considered despite the anti-
dumping measures in force against the PRC. There were
no indications that such an increase of
imports of
finished products was imminent or foreseeable in the
near future. Therefore this argument has to be rejected.

(168) Some users argued that there would be a shortage of
supply should measures be maintained against all three
countries which were subject to the present investigation.
However, in this respect it is recalled that the measures
currently in force have not led to any shortage of supply.
Moreover, since anti-dumping measures against Russia
and Ukraine are terminated, new sources of supply can
enter the Community without any anti-dumping duties.
Finally,
it is recalled that the purpose of anti-dumping
duties is not to prevent imports of SiC from PRC to enter
the Community market, but to ensure fair conditions of
trade. For these reasons, this argument has to be rejected.

(173) As for importers, users and raw material producers of
SiC, it was found that the imposition of the measures on
imports of SiC originating in the PRC did not have any
undue negative effects on their economic situation.

(174)

It is therefore concluded that there are no compelling
reasons of Community interest against the continuation
of the measures on imports of SiC originating in the
PRC.

9. INTERIM REVIEW

(175) Given the findings with regard to Russia and as outlined
above in recitals 84 to 89, the anti-dumping proceedings
against
this country will be terminated and the anti-
dumping measures in force will be repealed.

(176)

It follows that the interim review mentioned in recital 7
of this Regulation limited to the examination of the form
of the measures in force against Russia should also be
terminated.

(169) On the basis of the above,

it was concluded that the
continuation of measures applicable to imports of SiC
originating in the PRC would not have a significant
effect on the situation of users.

10. ANTI-DUMPING MEASURES

8.5. Interest of upstream industry

(170) The Commission received two replies

from suppliers of

to the que-
stionnaire
to the
Community industry. Both stated that anti-dumping
measures would have a rather limited impact on their
business.

raw materials

(171) The investigation confirmed these assessments.

is
therefore
are no compelling
reasons of the upstream industry against the continuation
of the measures against imports of SiC originating in the
PRC.

concluded that

there

It

(177) All parties were informed of

the essential

facts and
considerations on the basis of which the maintenance
of the existing measures is based. They were granted a
period to make
to this
disclosure. No comments were received which were of
a nature to change the above conclusions.

representations

subsequent

(178)

It follows from the foregoing that, as provided for by
Article 11(2) of the basic Regulation, the antidumping
measures applicable to imports of SiC, originating in
the PRC should be maintained.

(179) Finally, as outlined above,

the proceedings related to
imports of SiC originating in the Russian Federation
and in Ukraine should be terminated and the measures
repealed,

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Official Journal of the European Union

25.8.2006

HAS ADOPTED THIS REGULATION:

Article 1

The anti-dumping proceeding concerning imports of silicon
carbide originating in the Russian Federation and Ukraine
falling within CN code 2849 20 00 is hereby terminated and
anti-dumping measures imposed on those countries by Regu-
lation (EC) No 1100/2000 are repealed.

The rate of the duty applicable to the net, free-at-Community-
frontier price, before duty, shall be as follows:

Country

Rate of duty (%)

People's Republic of China

52,6

Article 2

Article 3

A definitive anti-dumping duty is hereby imposed on imports of
silicon carbide falling within CN Code 2849 20 00 originating
in the People's Republic of China.

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

The provisions in force concerning customs duties shall apply.

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

Done at Brussels, 21 August 2006.

For the Council
The President

E. TUOMIOJA