Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of ethanolamines originating in the United States of America
Date: 2006-09-28
Institutions: European Commission
Subjects: United States, anti-dumping duty, import, organic chemical

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.9.2006 
COM(2006) 560 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of ethanolamines originating in the 
United States of America 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

110 

Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the  European  Community,  as  last  amended  by  Regulation  (EC)  No  2117/2005  ("the 
basic Regulation") in the proceeding concerning imports of ethanolamines originating 
in the United States of America. 

120 

General context 

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

139 

141 

Existing provisions in the area of the proposal 

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

Consistency with other policies and objectives of the Union 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

219 

229 

230 

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

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

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

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

LEGAL ELEMENTS OF THE PROPOSAL 

305 

Summary of the proposed action 

On 26 July 2005, the Commission initiated an expiry review with regard to the imports 
of ethanolamines originating in the United States of America.  

EN 

2 

   EN 

 
 
 
The  enclosed  Commission  proposal  for  a  Council  Regulation  contains  the  definitive 
conclusions  regarding  the  continuation  of  dumping,  the  economic  situation  of  the 
Community  industry,  the  likelihood  of  a  recurrence  of  injurious  dumping  and  the 
Community interest.  

Given  the  finding  of  the  investigation  on  the  economic  situation  of  the  Community 
industry and on the likelihood of recurrence of injurious dumping, it is proposed that 
definitive anti-dumping duties should be imposed for a period of 2 years on imports of 
ethanolamines originating in the USA. 

It is proposed that the Council adopts the attached proposal for a Regulation in view of 
its publication in the Official Journal of the European Union on 25 October 2006 at the 
latest. 

310 

Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Regulation (EC) No 2117/2005 

329 

Subsidiarity principle 

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

Proportionality principle 

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

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

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

Choice of instruments 

Proposed instruments: regulation. 

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

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

331 

332 

341 

342 

BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

EN 

3 

   EN 

 
 
 
 
Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of ethanolamines originating in the 
United States of America 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against  dumped  imports  from  countries  not  members  of  the  European  Community1 
(hereinafter 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: 

A. PROCEDURE 

1. Measures in force 

(1) 

(2) 

In  February  1994,  the  Council  imposed,  by  Regulation  (EC)  No  229/942  definitive 
anti-dumping  duties  on  imports  of  ethanolamines  (product  concerned)  originating  in 
the  United  States  of  America  (‘USA’).  The  duties  took  the  form  of  minimum-price-
based  variable  duties  for  the  three  types  of  ethanolamines,  i.e.  monoethanolamine 
(MEA), diethanolamine (DEA) and triethanolamine (TEA). 

Following  a  request  of  the  Conseil  européen  des  fédérations  de  l’industrie  chimique 
(CEFIC) an expiry and interim review pursuant to Articles 11(2) and 11(3) of the basic 
Regulation  was  initiated  in  February  1999.  By  Regulation  (EC)  No  1603/20003  the 
Council  concluded  these  reviews  and  imposed  definitive  anti-dumping  measures  on 
imports  of  ethanolamines  originating  in  the  USA.  The  form  of  the  measures  was 
changed  as  they  took  the  form  of  a  specific  fixed  duty  per  ton  of  all  types  of 
ethanolamine. Two of the three companies benefiting from an individual anti-dumping 
duty were Dow Chemical Company and Union Carbide Corporation.  

(3) 

After  disinvestment  of  Dow  Chemical  Company’s  ethanolamine  business  into  the 
company  INEOS  LLC,  the  individual  anti-dumping  duty  of  EUR  69,40  per  ton 

1 

2 
3 

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) 
OJ L 28, 2.2.1994, p.40 
OJ L 185, 25.7.2000, p.1 

EN 

4 

   EN 

 
                                                 
applicable  to  Dow  Chemical  Company  was  attributed  to  INEOS  LLC4.  However, 
since the Dow Chemical Company acquired on 6 February  2001 all shares  of Union 
Carbide Corporation, a company benefiting from an individual anti-dumping  duty of 
EUR  59,25  per  ton,  the  Dow  Chemical  Company  is  still  active  in  the  ethanolamine 
business. The Union Carbide Corporation still exists but has become part of the Dow 
Chemical  Company  group  and  does  no  longer  have  any  independent  production 
activities.  

2. Request for an expiry review 

(4) 

(5) 

(6) 

Following  the publication  in  November  2004  of  a  notice  of  impending  expiry  of  the 
anti-dumping  measures  applicable  to  imports  of  ethanolamines  originating  in  the 
USA5, the Commission received on 25 April 2005 a request for a review pursuant to 
Article 11(2) of the basic Regulation.  

The  request  was  lodged  by  CEFIC  on  behalf  of  producers  representing  a  major 
proportion,  in  this  case  more  than  75%,  of  the  total  Community  production  of 
ethanolamine.  

The request was based on the grounds that 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  an  expiry  review,  the  Commission 
initiated by notice of initiation an investigation6 pursuant to Article 11(2) of the basic 
Regulation. 

3. Investigation 

(7) 

(8) 

(9) 

The Commission’s services officially advised the Community producers, the exporting 
producers  in  the  USA,  importers/traders,  user  industries  known  to  be  concerned,  as 
well  as  the  authorities  of  the  USA  of  the  initiation  of  the  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. 

The  Commission’s  services  sent  questionnaires  to  all  parties  known  to  be  concerned 
and to those who requested a questionnaire within the time limit set out in the notice of 
initiation. 

The Commission 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.  

(10)  Replies to the questionnaire were received from two exporting producers in the USA 
and  their  nine  related  importers  in  the  Community,  one  related  importer  in 
Switzerland, three Community producers (‘the applicant Community producers’), and 
one industrial user in the Community. One Community producer did not fully reply to 

4 
5 
6 

OJ C 306, 10.12.2002, p.2 
OJ C 276, 11.11.2004, p.2 
OJ C 183, 26.7.2005, p.13 

EN 

5 

   EN 

 
                                                 
the questionnaire and only submitted succinct information and two industrial users in 
the Community made their views known.  

(11)  The Commission’s services sought and verified all the information deemed necessary 
for the purpose of the determination of the likelihood of continuation or recurrence of 
dumping and injury and for the determination of the Community interest. Verification 
visits were carried out at the premises of the following companies: 

a. Applicant Community producers 

BASF AG, Ludwigshafen, Germany 

Innovene Europe Ltd., Staines, United Kingdom 

SASOL GmbH, Marl, Germany 

b. Exporting producers in the USA 

The Dow Chemical Company, Midland, Michigan and Houston, Texas, USA 

c. Related importers in the Community 

Dow Chemical Iberica SL, Tarragona, Spain 

INEOS Oxide Ltd., Antwerp, Belgium 

d. Related importer in Switzerland 

Dow Europe GmbH, Horgen, Switzerland 

e. Industrial users in the Community 

Degussa Goldschmidt Espana SA, Granollers, Spain 

4. Investigation period 

(12)  The  investigation  regarding  the  continuation  or  recurrence  of  dumping  and  injury 
covered the period from 1 July 2004 to 30 June 2005 (the ‘RIP’). 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  2002  up  to  the  end  of  the  RIP  ('period 
considered'). 

B. PRODUCT CONCERNED AND LIKE PRODUCT 

1. Product concerned 

(13)  The  product  concerned  is  the  same  as  that  covered  by  the  previous  investigations. 
Ethanolamines  are  obtained  by  making  ethylene  oxide  (EO),  itself  a  result  of  a 
reaction  of  ethylene  and  oxygen,  react  with  ammonia.  This  synthesis  leads  to  three 
competing reactions and to three different types of ethanolamines: monoethanolamine 
(MEA), diethanolamine (DEA) and triethanolamine (TEA), depending on how many 
times EO is bound. The maximum number of combinations is limited by the number 
of hydrogen elements in ammonia, namely three. The proportions of the three types in 

EN 

6 

   EN 

 
the  total  output  are  determined  by  the  production  installation  design,  but  can,  to  a 
certain  extent,  be  controlled  by  the  ammonia/EO  (the  ‘molar’  ratio).  Community 
installations are typically based on naphtha as energy carrier, whereas US installations 
are natural gas based. 

(14)  The product concerned is used as an intermediate and/or additive for surfactants used 
in  detergents  and  personal  care  products,  cosmetics,  fertilisers  and  crop  protection 
agents (glyphosate), corrosion inhibitors, lubrication oils, textile auxiliaries and fabric 
softeners  (esterquats),  photographic  chemicals,  paper  and  metal-works,  as  a  grinding 
and  binding  aid  for  cement  production  and  as  a  gas  scrubber  absorption  aid 
(sweetening the gas by removing acids). Since late 2004, beginning 2005, the product 
is also increasingly used for wood treatment. Finally, the product can also be used by 
the  manufacturers  themselves  or  by  their  related  manufacturers  in  the  production  of 
ethylene amines.  

2. Like product 

(15)  As in the previous investigations, it was shown that the product concerned produced in 
the  USA  and  sold  to  the  Community  is  identical  in  terms  of  physical  and  technical 
characteristics to the product produced and sold in the Community by the Community 
producers and that there is no difference in use between those products. It has further 
been  found  that  the  product  concerned  produced  in  the  USA  and  sold  to  the 
Community  is  identical  to  that  sold  on  the US  domestic  market.  Therefore,  all  these 
products must be considered to be like products within the meaning of Article 1(4) of 
the basic Regulation. 

C. LIKELIHOOD OF A CONTINUATION OR RECURRENCE OF DUMPING 

(16) 

In  accordance  with  Article  11(2)  of  the  basic  Regulation,  it  was  examined  whether 
dumping  was  currently  taking  place  and,  if  so,  whether  or  not  the  expiry  of  the 
measures would be likely to lead to a continuation or recurrence of dumping. 

1. Preliminary remarks 

(17)  Of the four US exporting producers named in the complaint, two did co-operate in the 

investigation. 

(18)  The  two  co-operating  exporting  producers  represented  100%  of  imports  to  the 
Community  during  the  RIP,  which  amounted  to  41.000  tonnes.  Imports  into  the 
Community  of  the  product  concerned  originating  in  the  USA  represented  16,7%  of 
Community  consumption  during  the  RIP  down  from  29%  during  the  previous 
investigation period (1998).  

2. Dumping of imports during the RIP 

Normal value 

(19)  With  regard  to  the  two  co-operating  US  exporting  producers,  normal  value  was 
established for each type of the product concerned, based on the price paid or payable 
on the domestic market in the USA by unrelated customers pursuant to Article 2(1) of 
the  basic  Regulation,  since  these  sales  were  found  to  have  been  made  in  sufficient 
quantities and in the ordinary course of trade. 

EN 

7 

   EN 

 
Export price 

(20)  As in the original and in the previous review investigation, this investigation showed 
again that the two cooperating US exporting producers exported the product concerned 
to  the  Community  via  companies  which  are  related.  As  a  consequence,  and  in 
accordance  with  Article  2(9)  of  the  basic  Regulation,  export  prices  were  constructed 
on the basis of the prices at which the imported product was first resold to independent 
customers  in  the  Community.  Allowance  was  made  for  all  costs  incurred  between 
importation  and  resale,  including  selling,  general  and  administrative  costs  and  the 
profit realised in the Community by the importing companies during the RIP. 

Comparison 

(21)  The  normal  value  was  compared  with  the  average  export  price  for  each  type  of  the 
product concerned, on an ex-works basis and at the same level of trade. In accordance 
with  Article  2(10)  of  the  basic  Regulation,  and  for  the  purpose  of  ensuring  a  fair 
comparison,  differences  in  factors  which  were  claimed  and  demonstrated  to  affect 
price  and  price  comparability  were  taken  into  account.  Adjustments  were  made  for 
inland and ocean freight, deferred rebates, handling and packaging costs, credit costs 
and import duties, which were all deducted from the resale prices in order to arrive at 
an ex-works basis.  

Dumping margin 

(22) 

In  accordance  with  Article  2(11)  of  the  basic  Regulation,  the  dumping  margin  was 
established  per  product  type  on  the  basis  of  a  comparison  of  the  weighted  average 
normal value with the weighted average export prices at the same level of trade. This 
comparison showed the existence of dumping during the RIP, even if at a lower level 
than  established  in  the  previous  review.  The  weighted  average  dumping  margin 
expressed  as  a  percentage  of  the  CIF  value  at  the  Community  frontier  was  4,8%  for 
INEOS and 20,3 % for Dow Chemical. 

3. Development of imports should measures be repealed 

Preliminary remarks 

(23)  Further to the analysis of the existence of dumping during the RIP, the likelihood of 

the continuation of dumping was examined.  

Level of dumping in case the measures are repealed 

(24)  The  removal  of  the  measures  would  allow  exporters  to  reduce  their  export  prices.  A 
reduction  of  export  prices  would  make  the  US  product  more  attractive  on  the 
Community market. If the export prices were reduced commensurate to the level of the 
duties, the dumping margins observed during the RIP would be 13,4% for INEOS and 
28,3% for Dow Chemical. 

Further room for exports to the Community market because of unused US production capacity 

(25) 

It is estimated that the unused production capacity in the US during the RIP is about 
90.000 tons. This was calculated on the basis of information from the two cooperating 
exporting producers as well as information from leading market journals. Compared to 

EN 

8 

   EN 

 
an  estimated  installed  total  capacity  in  the  USA  of  650.000  tons,  total  estimated 
fulfilled demand and captive use of 560.000 tons implies a capacity utilisation rate of 
86%, which is rather low given the favourable market conditions during the RIP. The 
relatively low capacity utilisation rate was a consequence of operational problems in 
certain production facilities. The spare capacity of 90.000 tons should be compared to 
the  volume  of  exports  from  the  US  to  the  Community  during  the  RIP  (41.088  tons) 
and  total  Community  consumption  (246.670  tons).  In  other  words,  there  is 
considerable potential to increase exports from the US and take over a large part of the 
Community market. The propensity of increased exports to the Community is further 
supported  by  the  45.000  tons  capacity  expansion  ongoing  in  2006  in  Mexico  and 
Brazil, both important export markets for the US producers. 

(26)  To  conclude,  there  is  some  spare  capacity  available  which  could  be  used  to  produce 

more ethanolamine and to sell it on the Community market should measures be lifted. 

Evolution of the prices in the Community market and in the exporting country market 

(27)  The ethanolamine market has been characterised by strong growth in the demand for 
DEA  in  the  years  2000-2001,  triggered  by  the  use  of  DEA  in  the  production  of 
glyphosate herbicides, which are used in a process to allow genetically modified crops 
to resist such herbicides. The demand for TEA is specifically driven by the use in the 
cement  sector  and  by  the  producers  of  fabric  softeners.  Since  2004,  the  market  for 
MEA has increased considerably following a US Regulation, effective 1 January 2005, 
prohibiting the use of alternative metal based products for wood treatment, causing an 
additional  estimated  demand  of  MEA  of  80.000  tons.  As  a  consequence,  the 
worldwide price level of ethanolamines is high because of high demand.  

(28)  The investigation showed that US domestic prices are on average higher than average 
sales  prices  on  the  Community  market.  Industrial  users  seem  to  obtain  similar 
conditions  on  both  markets  as  they  are  often  multinational  companies  that  negotiate 
their sourcing on a worldwide basis and select suppliers that are capable of delivering 
on  a  similar  scale.  However,  US  domestic  price  for  all  types  of  ethanolamines  were 
found to be higher when charged to traders and distributors. This type of sales on the 
US  domestic  market  is  typically  conducted  on  a  spot  basis,  whereas  sales  on  the 
Community market are rather established on a fixed term contract basis. This implies 
that sales prices on the Community are set for a longer period and are more stable.  

(29)  Sales  to  traders  and  distributors  by  the  two  co-operating  exporting  producers 
represent only 13% of the volumes sold on the US domestic market and 32% of sales 
on  the  Community  market,  but  the  US  domestic  prices  were  on  average  35%  higher 
than  the  Community  prices  for  this  level  of  trade.  This  supported  the  finding  that, 
given  the  spot  nature  of  sales  to  traders  and  distributors,  US  domestic  prices  are 
adapting  more  rapidly  to  price  fluctuations.  Therefore,  in  a  context  of  increasing 
prices,  US  domestic  prices  will  have  a  tendency  to  be  relatively  higher  than 
Community prices. On the other hand, this level of trade represents the smaller part of 
sales on both the US domestic and Community markets. 

(30)  For industrial users, which constitute the majority of customers, the termination of the 
measures would probably not influence the price level at which ethanolamine is sold 
in the Community market, since it was observed that the burden of the measures was 
carried by the US exporting producers. In that scenario, the latter may achieve more 

EN 

9 

   EN 

 
profitable  sales  and  would  have  an  incentive  to  increase  exports  to  the  Community 
market. However, these industrial users might use the disappearance of the measures 
as a bargaining tool to obtain lower prices from both US exporting producers and the 
Community industry. 

Relationship between the US export prices to third countries and to the Community 

(31)  Export  prices  of  the  product  concerned  to  the  other  main  export  markets,  namely  to 
Canada and South America, show no regular pattern. Sales prices are sometimes lower 
and  sometimes  higher  than  in  the  USA  and  to  the  Community  market  depending  on 
the sales conditions. Lower volumes shipped typically entail higher sales prices. 

(32) 

In  summary,  for  both  co-operating  exporting  producers,  the  US  market  in  principle 
remains the most important sales market. However, given that 17% of production was 
exported during the RIP, sales to the Community and to the rest of the world continue 
to play an important role in the overall use and profitability of production capacities 
installed.  

Possible short-term development of imports  

(33) 

In  the  short  term,  as  regards  the  two  co-operating  US  producers,  it  can  be  expected 
that their import volumes will remain at least stable. Indeed, even with the measures in 
force and notwithstanding the attractiveness of the US market, they have continued to 
serve their Community-based clients. A reduction of export volumes may possibly be 
expected  from  the  US  producer  INEOS  after  the  takeover  of  Innovene,  with  its 
production  facilities  in  the  Community,  once  the  company  would  have  de-
bottlenecked  the  acquired  production  facilities  and  have  expanded  by  installing  new 
capacity in the Community, which is not expected to become operational before 2008. 
At the same time it is expected that the US exporting producers will have repaired the 
hurricane damage faced in the second half of 2005 and become fully operational again 
in  the  second  half  of  2006  beginning  2007,  thereby  producing  additional  quantities 
which may be sold to the Community market.  

(34)  As to the non-cooperating US producers, which accounted for 27% of US production 
capacity  during  the  RIP,  it  cannot  be  excluded  that  they  take  up  exports  to  the 
Community again, should measures be allowed to lapse.  

Possible development of worldwide capacity and demand 

(35)  An  analysis  was  also  carried  out  of  possible  medium  term  (up  to  5  years) 
developments of demand and production capacity in the Community, the USA and the 
rest  of  the  world.  It  was  also  analysed  how  the  expected  situation  on  demand  and 
supply  would  affect  the  price  levels  in  the  Community.  All  figures  in  the  following 
recitals are based on information sourced from the companies BASF, Dow and INEOS 
and the chemical industry’s leading reference publications by PCI and Tecnon. 

(36)  Taking  into  account  the projections  of  both  US  and  Community  producers  on  future 
demand and production capacity, growth on the Community market is foreseen to be 
lower than in the rest of the world. The projected Community average growth rate on 
an annual basis stands at around 3% in the medium term, compared to 7% in Asia and 
4,2% projected worldwide.  

EN 

10 

   EN 

 
(37) 

In  2004,  demand  on  the  European  market  exceeded  Community  installed  production 
capacity  by  approximately  40.000  tons.  The  inverse  situation  existed  in  the  USA, 
where  the  existing  capacity  was  some  90.000  tons  higher  than  the  effective  use  and 
sale of the product, which nevertheless did not negatively affect the high price levels, 
because  of  operational  production  problems  limiting  supply  to  the  customers. 
Confronting the projected growth rates with the announced capacity expansions, some 
excess capacity over demand on the Community market can be expected as from 2008, 
in particular because of the likely implementation of INEOS’ investment plans in the 
Community,  which  would  increase  the  installed  capacity  in  the  Community  by  one 
quarter  to  a  third.  Such  capacity  expansion  is  expected  not  to  become  operational 
before  early  2008.  Although  such  increase  in  capacity  might  at  the  same  time  be 
partially  compensated  by  a  reduction  of  imports  into  the  Community  and  increased 
export sales by Community producers, it is expected that total installed capacity in the 
Community by all producers would surpass demand on the Community market during 
2008.  

(38)  On  the  basis  of  evidence  at  the  disposal  of  the  Commission,  the  current  excess 
capacity in the USA is expected to continue at least in the short term because domestic 
demand,  although  growing,  will  not  absorb  the  spare  capacity  that  will  become 
operational again. Over a longer timeframe up to 2010, excess capacity is expected to 
disappear, reducing the incentive for US producers to export. At the same time there 
are predictions of substantial shortages in Asia. This is illustrated by the fact that Dow 
Chemical has formed a joint-venture with Petronas, called Optimal, and has installed 
75.000 tons capacity in Malaysia, dedicated to serve the Asian ethanolamine market.  

(39)  More in general, by 2010, worldwide production capacity is likely to have increased 
from around 1.300.000 tons to 1.785.000 tons. This includes new capacity installed in 
the Community (+205.000), in the USA (+80.000), Saudi Arabia (+100.000) and Asia 
(+100.000).  World  demand  at  a  projected  growth  rate  of  4,2%  would  by  2010  have 
increased  to  between  1.550.000  tons  and  1.700.000  tons.  Taking  into  account  that 
some  capacity  surplus  is  always  absorbed  by  stoppages  for  maintenance  and  that 
therefore a certain buffer is needed, the projection for 2010 shows excess capacity in 
the  Community,  equilibrium  in  the  USA  and  shortage  in  Asia  and  the  rest  of  the 
world.  In  sum,  the  various  capacity  expansions  do  not  point  to  a  propensity  for  US 
exporting producers to dump on the Community market because of the likely match of 
supply and demand on a worldwide level. It should however be noted that this is an 
assessment referring to developments in the medium term, i.e. 2008-2010. 

Conclusion on the likelihood of a continuation or recurrence of dumping  

(40) 

It  is  recalled  that  dumping  during  the  RIP  was  found  to  exist  for  both  co-operating 
exporting  producers,  however  at  a  lower  level  than  in  the  previous  review 
investigation.  

(41)  Compared to the previous review investigation, market share of US imports decreased 
from 29% to 16,7%. There appears to be 90.000 tons spare capacity in the USA, the 
low utilisation rate during the IP being a consequence of temporary events, and the use 
of an estimated 27% of US installed capacity could not be investigated due to a lack of 
co-operation.  It  cannot  be  entirely  ruled  out  that  these  non-cooperating  producers 
would return to the Community market at dumped prices if the measures were allowed 
to  lapse.  Although  demand  on  the  US  market  is  expected  to  be  stronger  than  in  the 

EN 

11 

   EN 

 
Community,  the  excess  capacity  in  the  USA  is  expected  only  to  be  absorbed  in  the 
medium term. Moreover, in order to maintain the profitability of production capacities 
installed, there currently exists an incentive for all producers to increase their sales to 
the Community market, should measures be repealed. 

(42)  To conclude, there is a likelihood of continuation of dumping and a risk of an increase 
of  the  volume  of  imports  possibly  exerting  a  downward  pressure  on  prices  in  the 
Community, at least in the short term, if measures were repealed. 

D. DEFINITION OF THE COMMUNITY INDUSTRY 

(43)  The  three  applicant  Community  producers  fully  co-operated  in  the  investigation. 
During  the  RIP,  they  represented  80%  of  the  Community  production.  There  is  one 
additional  supporting  Community  producer  which  supplied  information  in  particular 
concerning its production but which did not reply to the full questionnaire. Hence, he 
had to be considered as non-cooperating. 

(44) 

It  should  be  noted  that  since  the  Council  Regulation  (EC)  No  1603/2000  of  20  July 
2000  publishing  the  measures  that  are  currently  in  force,  Union  Carbide  Ltd  (UK), 
which  was  taken  over  by  the  Dow  Chemical  Company,  no  longer  produces 
ethanolamine  in  the  Community  Furthermore,  BP  Chemicals  changed  its  name  into 
Innovene  and  Condea  changed  its  name  into  Sasol.  Finally,  INEOS  Oxide  Ltd.,  the 
UK  based  parent  company  of  INEOS  Americas  LLC,  acquired  Innovene  on  16 
December 2005. Both companies, INEOS Americas LLC and Innovene, continued to 
fully co-operate in the proceeding 

(45)  On this basis the three Community producers are BASF AG, Innovene and Sasol and 
they constitute the Community industry within the meaning of Article 4(1) and Article 
5(4) of the basic Regulation. 

(46)  The investigation showed that, alike in the previous review investigation, part of  the 
production of ethanolamine in the Community is intended for internal, or captive, use. 
The  share  is  estimated  at  around  one  third of  total  Community  production,  as  it  was 
during  the  previous  review  investigation.  Captive  production  was  found  at  the 
premises of one of the producers included in the Community industry. This producer 
runs  a  plant  which  is  earmarked  and  used  for  the  sole  purpose  of  captive  use.  The 
investigation confirmed that the applicant Community producers do not purchase the 
product  concerned  for  trading  purposes  or  for  their  captive  use  from  independent 
parties,  either  inside  or  outside  the  Community.  Ethanolamine  for  captive  use  is 
therefore  not  considered  to  be  in  competition  with  ethanolamine  available  on  the 
Community market (hereafter the free market).  

EN 

12 

   EN 

 
E. SITUATION ON THE COMMUNITY MARKET 

1. Consumption on the Community market 

Community 
consumption 

2002 

2003 

2004 

RIP 

Total tonnes 

283.992 

331.194 

358.830 

366.645 

Index 

100 

117 

126 

129 

captive tonnes 

97.768 

107.539 

118.584 

119.975 

index 

100 

110 

121 

123 

free market tonnes 

186.224 

223.655 

240.246 

246.670 

index 

100 

120 

129 

132 

Source: Eurostat statistics and questionnaire replies 

(47)  The determination of total Community consumption was based on the combination of 
production minus the exports of all producers in the Community and the imports from 
third countries into the Community market. Compared to the year 2002, consumption 
during the RIP has increased by 29% or by 83.000 tonnes. The growth was especially 
pronounced between 2002 and 2003 (+17% or +48.000 tonnes) but it continued during 
2004  and  the  RIP,  although  at  a  lower  pace.  Consumption  has  been  increasing  as  a 
consequence of increased demand for ethanolamines, based on a wide and expanding 
field of applications. The most important demand drivers since 2002 have been DEA 
for glyphosate production, TEA for esterquats and MEA for wood treatment. 

(48)  Free  market  consumption  increased  by  32%  (or  by  60.000  tonnes)  over  the  period 
considered with an increase of 20% (or 37.000 tonnes) between 2002 and 2003. 

(49)  Concerning  the  captive  market,  consumption  increased  by  23%  or  by  22.000  tonnes 

due to increased use of ethanolamines in production processes of other chemicals.  

2. Imports from the USA, volume, market share and import prices 

US Imports 

2002 

tonnes 

index 

46.075 

100 

market share 

24,7% 

import price €/ton 

979,63 

index 

100 

2003 

40.576 

88 

18,1% 

915,15 

93 

2004 

40.512 

88 

16,9% 

975,09 

100 

RIP 

41.088 

89 

16,7% 

995,55 

102 

Source: Eurostat statistics and questionnaire replies 

EN 

13 

   EN 

 
(50)  The volume of imports into the Community from the USA decreased by 12% between 
2002 and 2003 and has remained at that level since. The market share was determined 
on  the  basis  of  free  market  consumption  in  the  Community  and  has  declined  from 
24,7% to 16,7% over the period considered, which constitutes a loss of 8 percentage 
points. The drop of imports and market share between 2002 and 2003 coincided with a 
7%  overall  decline  of  the  average  import  price.  Between  2002  and  2003,  the  US 
exporting  producers  did  not  participate  in  the  expansion  of  the  free  market 
consumption in the Community. Also after 2003, the US exporting producers did not 
increase  their  market  share,  although  import  prices  increased  again.  In  a  sellers’ 
market, such increased attractiveness would normally have caused additional sales, but 
US  exporting  producers  did  not  come  back  to  the  Community  market  as  expected, 
because  of  operational  problems  and  even  more  attractive  conditions  on  the  US 
domestic market.  

(51) 

It  should  be  noted  that  the  above  prices  were  collected  from  the  Eurostat  import 
statistics. They do not distinguish the product mix and contain various sales conditions 
which  cannot  be  compared  to  those  applied  by  other  operators  on  the  Community 
market.  A  precise  price  comparison  between  dumped  imports  and  Community 
producers'  prices  at  the  same  level  of  trade  was  carried  out  and  explained  in  recital 
(53) below. Over the period considered, the average import price increased modestly 
by 2%. All imports into the Community originating in the USA were made via related 
importers  and  the  import  prices  therefore  are  transfer  prices  within  the  company’s 
group.  In  the  previous  review  investigation,  such  import  prices  were  found  to  have 
been artificially set in order to at least partially absorb the anti-dumping measures then 
in force. The related importers in the Community incurred significant losses during the 
former RIP and the margins they realised between purchase price (actual import price) 
and  resale  price  on  the  Community  market  were  not  sufficient  to  cover  the  costs 
incurred between importation and resale. This was the reason that the previous review 
investigation  led  to  the  revision  of  the  form  of  the  anti-dumping  measures  and  that 
specific fixed duty rates per tonne were imposed.  

(52) 

In the current review investigation, both the US exporting producers and their related 
importers in the Community were found to have realised profits during the RIP and the 
related importers’ margins were found to have been conform to market conditions. The 
sales  price  levels  compared  to  normal  value  and/or  cost  of  production  allowed  for 
adequate  profits  for  all  companies  involved  in  markets  characterised  by  high  sales 
prices.  

(53)  The  comparison  of  CIF  import  prices  at Community frontier charged to independent 
customers  including  anti-dumping  duties  with  the  Community  industry’s  ex-work 
prices,  for  the  same  product  types  and  on  the  same  level  of  trade,  led  to  the 
establishment  of  undercutting  of  the  Community  industry’s  sales  prices  by  between 
7,3% and 17,5%.  

EN 

14 

   EN 

 
3. Imports from other third countries, volume, market share and import prices 

Imports  from  other 
third countries 

2002 

Tonnes 

Index 

market share 

17.596 

100 

9,4% 

import price €/ton 

1034,23 

index 

100 

Source: Eurostat statistics 

2003 

2004 

RIP 

18.688 

106 

8,4% 

970,75 

94 

12.276 

70 

3,4% 

982,67 

95 

8.773 

50 

2,4% 

955,24 

92 

(54) 

Imports  from  other  third  countries  halved  over  the  period  considered.  The  market 
share  of  the  main  exporting  other  countries,  mainly  Russia  and  Iran,  has  indeed 
become  marginal.  According  to  the  user  industry,  this  decreasing  trend  is  due  to  the 
fact that it was difficult to obtain exactly the requested quantities at a precise delivery 
date in the two aforementioned countries.  

4. Economic situation of the Community industry 

- Output, production capacity and capacity utilisation 

2002 

Production in tonnes 

206.481 

Index 

100 

2003 

242.350 

117 

2004 

279.307 

135 

RIP 

290.625 

141 

Capacity in tonnes 

263.320 

273.820 

302.070 

311.820 

Index 

100 

Capacity utilisation 

78,4% 

104 

88,5% 

115 

92,5% 

118 

93,2% 

(55)  Over  the  period  considered,  production  has  increased  by  41%.  At  the  same  time 
capacity was extended by 18%, leading to an improvement of capacity utilisation from 
78,4% to 93,2%.  

(56)  The  production  capacity  increase  between  2002  and  2003  is  marginal  and  reflects 
some  efficiency  improvements.  From  2004  on,  more  intensive  de-bottlenecking  and 
new capacity expansions can be observed. 

- Inventories 

Inventories 

tonnes 

index 

2002 

9.543 

100 

2003 

10.883 

114 

2004 

10.228 

107 

RIP 

7.596 

80 

(57)  The level of inventories is compared at the end of each year 2002 to 2004 and varies to 
a certain degree depending upon orders. The level at the end of the RIP is lower, but 
shows the situation at 30 June 2005 and is therefore not properly comparable with year 
end inventories. This is because of the fact that, in view of somewhat lower demand 

EN 

15 

   EN 

 
 
from  industrial  users  during  the  summer  months,  companies  schedule  lower 
production and maintenance of the production facilities. 

- Sales volume, market share and sales price 

2002 

Sales volume 

130.214 

Tonnes 

100 

Market share in  

45,9% 

2003 

144.103 

111 

43,5% 

2004 

167.054 

128 

46,6% 

RIP 

175.953 

135 

48,0% 

total  consumption 
(including  captive 
use) 

Market  share 
free 
consumption  

in 
market 

Sales  price  €/ton 
(free market sales) 

Index 

69,9% 

64,4% 

69,5% 

71,3% 

801,77 

100 

758,49 

95 

835,68 

104 

936,08 

117 

(58)  The  Community  industry’s  sales  volume  to  unrelated  customers  increased  by  35% 
over  the  period  considered.  Both  the  market  share  of  total  Community  consumption 
and of free market consumption indicate that after a loss of market share between 2002 
and  2003,  market  share  has  stabilised  and  stood  at  48%  in  relation  to  total 
consumption respectively 71,3% in the free market during the RIP. The average price 
level of sales to unrelated customers followed a similar pattern and after a decrease of 
5% between 2002 and 2003, the price level in the free market during the RIP was 17% 
higher than in 2002.  

(59)  Compared to the price level during the RIP of the previous review investigation, which 
coincided with the calendar year 1998, sales prices in 2004 and during the current RIP 
were on average respectively 22,7% and 37,5% higher than in 1998. No invoices are 
issued with regard to the production destined for captive consumption which is used in 
integrated production facilities.  

- Factors affecting Community prices 

(60)  Consumption has been continually increasing over the last decennium, from 152.000 
tons in 1995 to 367.000 tons during the RIP, which represents an annual increase of 
9,7%. The more recent increase of consumption over the period considered, from 2002 
to  the  RIP,  was  10,7%  on  an  annual  basis,  compared  to  a  7%  annual  increase  of 
capacity. This evolution has supported high price levels in the Community, at the same 
time pushing the Community industry towards an important improvement of capacity 
utilisation  rates  from  78,4%  to  93,2%,  leading  to  a  14,5%  annual  increase  of 
production.  In  absolute  terms  production  increased  by  84.000  tons  compared  to  an 
increase of consumption of 83.000 tons, and capacity expanded by only 48.500 tons.  

EN 

16 

   EN 

 
 
2002 

of 

779,53 

100 

2003 

749,85 

96 

2004 

746,84 

96 

RIP 

790,60 

101 

Average 
cost 
production €/ton 

Index 

(61)  High  and  increasing  demand  compared  to  a  lower  pace  of  capacity  expansion  and 
overall  reduction  of  imports  have  sustained  the  price  level  of  ethanolamine  in  the 
Community. Moreover, the sales margins have hardly been influenced by the full cost 
of production per tonne over the period considered, as the price increase was mainly 
due  to  market  developments.  The  increase  of  cost  of  production  by  5,9%  between 
2004 and the RIP was the consequence of an increasing naphta price, which is an oil 
based energy driver used in the production of ethylene oxide, the main raw material in 
the production of ethanolamine in the Community.  

- Employment, productivity and wages 

Employment 

index 

Productivity 

2002 

102 

100 

2016 

tonnes per employee 

100 

index 

Wages 

in ‘000 euro 

index 

6860 

100 

2003 

103 

101 

2354 

117 

7526 

110 

2004 

101 

99 

2755 

137 

8018 

117 

RIP 

102 

99 

2861 

142 

7598 

111 

Average wage 

66.976 

per employee (euro) 

100 

73.105 

109 

79.097 

118 

74.797 

112 

index 

(62)  Employment  at  the  level  of  the  Community  industry  for  the  like  product  remained 
stable during the period considered. The production process is largely automated and 
therefore  not  labour-intensive.  At  the  same  time,  due  to  constant  improvements  and 
de-bottlenecking  of  the  production  installations,  productivity  increased  by  42%  over 
the period considered. 

(63)  Over the period considered, wages increased by 11% with a peak in 2004 which can 
be  attributed  to  restructuring  efforts  and  redundancies  by  one  of  the  complaining 
Community producers. The average wage per employee followed a similar pattern. 

EN 

17 

   EN 

 
 
 
- Profitability 

to  unrelated 
the 

in 

Sales 
parties 
Community 

2002 

2003 

2004 

RIP 

Sales value 

104.402 

109.301 

139.603 

164.705 

in ‘000 euro 

100 

105 

134 

158 

index 

Cost of production 

101.506 

108.056 

124.763 

139.100 

in ‘000 euro 

100 

106 

123 

137 

index 

Profitability 

2,8% 

1,1% 

10,6% 

15,5% 

(64)  The  profitability  over  the  period  considered  on  free  market  sales  of  the  product 
concerned  to  unrelated  parties  in  the  Community  increased  from  2,8%  in  2002  to 
15,5%  during  the  RIP,  after  a  decline  to  1,1%  in  2003.  This  improvement  of 
profitability since 2003  is  to  be seen in the context of  stable imports from the USA, 
and an increasing demand, with a consequence of both increased sales volumes and an 
increased  sales  price  level,  which  during  2004  and  the  RIP  were  more  pronounced 
than the increase of the cost of production.  

- Investments, return on investment and ability to raise capital 

Investments 

2002 

1.170 

in ‘000 euro 

100 

2003 

9.975 

852 

2004 

687.478 

58750 

RIP 

388.476 

33198 

index 

Return 
investment  

on 

2,2% 

0,9% 

10,2% 

17,6% 

(65)  The price levels obtained in the Community determine whether companies are inclined 
to build additional capacity. Over the period 2002-2003, return on investment was not 
considered  sufficiently  high  in  order  to  warrant  the  installation  of  additional 
production installations. As a consequence, companies limited themselves to some de-
bottlenecking  and  efficiency  improvements.  The  continuously  increasing  demand 
combined  with  only  limited  capacity  increase  has  supported  higher  price  levels,  to 
such  an  extent  that  since  2004  it  became  again  realistic  to  implement  previously 
shelved investment projects.  

(66)  Concerning  the  ability  to  raise  capital,  it  should  be  noted  that  the  ethanolamine 
production is only a small part of the overall production of chemical products by the 
Community industry, which mostly represent major international chemical companies, 
which enjoy high overall levels of cash flow and auto-financing and creditworthiness. 
Thus,  the  Community  industry  in  general  did  not  have  major  problems  in  raising 
capital. 

EN 

18 

   EN 

 
 
 
 
- Cash flow 

Cash flow 

2002 

4.842 

in ‘000 euro 

100 

index 

flow  on 

Cash 
turnover 

4,6% 

2003 

3.301 

68 

2004 

16.863 

348 

RIP 

27.596 

570 

3,0% 

12,1% 

16,6% 

(67)  The evolution of the cash flow is a further illustration of the link between price levels, 
profitability  and  the  return  on  investment.  After  low  cash  flow  levels  in  2002  and 
2003,  the  Community  industry  returned  to  double  digit  figures  for  the  cash  flow  in 
relation to turnover since 2004 and its level for most companies is sufficiently high in 
order to direct funding towards new investments in the ethanolamines business. 

- Growth 

(68)  The  Community  industry  benefited  from  the  growth  of  the  market  over  the  period 
considered,  which  is  illustrated  by  the  increase  of  its  market  share  of  total 
consumption  from  45,9%  to  48%  and  of  its  market  share  of  free  consumption  from 
69,9% to 71,3%.  

- Magnitude of the dumping margin 

(69)  Dumping  continued  during  the  RIP,  even  if  at  levels  lower  than  established  in  the 

previous review investigation. 

- Recovery from the effects of past dumping 

(70)  As demonstrated above, the Community industry indeed has had the chance to recover 

from past dumping, in particular in terms of sales prices and profitability.  

- Export activity of the Community industry 

2002 

Export volume 

15.631 

tonnes 

index 

100 

2003 

15.278 

98 

2004 

16.709 

107 

RIP 

17.428 

111 

(71)  The  Community  industry’s export volumes to third countries increased  by 11% over 
the period considered which corresponds to 4% on average on an annual basis, which 
is  largely  in  line  with  the  expansion  of  world  consumption.  It  illustrates  that  the 
Community industry is competitive on world markets. 

EN 

19 

   EN 

 
 
 
 
5. Conclusion on the situation on the Community market 

(72)  The volume of ethanolamine consumed on the Community market expanded by 29% 
while imports from the USA declined by 11% over the period considered. At the same 
time,  the  Community  industry  could  increase  its  sales  volume  and  thereby  stabilise 
and even slightly increase its market share. 

(73)  The economic situation of the Community industry improved with respect of most of 
the economic indicators: production (+41%), production capacity (+18%) and capacity 
utilisation,  sales  volume  (+35%  or  +45.000  tonnes)  and  value  (+58%),  productivity, 
market  share  (+  2  percentage  points),  cash  flow  and  profitability,  investments  and 
return on investment. The development of the costs of production per tonne remained 
below the development of sales prices. The Community industry moreover benefited 
from  the  growth  of  the  Community  market  and  kept  pace  with  world  demand 
evolution as its export activity increased by 11% in volume.  

(74)  To  conclude,  in  view  of  the  positive  development  of  the  indicators  pertaining  to  the 
Community  industry,  it  is  considered  to  be  in  a  good  situation.  It  could  not  be 
established  that  material  injury  has  continued.  Therefore,  it  was  examined  whether 
there is a likelihood of recurrence of injury should measures be allowed to lapse. 

F. LIKELIHOOD OF A RECURRENCE OF INJURY 

-  Summary  of  the  analysis  of  the  likelihood  of  the  continuation  of  dumping  and  of  the 
recurrence of injurious dumping 

(75) 

It is recalled that exporting producers in the USA were still practicing dumping during 
the RIP, even if at a reduced level compared to the previous investigation. Removal of 
the  measures  could,  if  the  export  prices  were  reduced  commensurately,  lead  to 
dumping margins between 13,4% and 28,3% for the co-operating exporting producers, 
whereas the behaviour of the non-cooperating producers, that represented 42% of the 
imports  in  the  original  investigation,  remains  unknown.  The  latter,  however,  being 
subject  to  the  highest  anti-dumping  measures,  would  have  the  highest  incentive  to 
return to the Community market, if measures were terminated. 

(76)  At the same time it is estimated that a spare capacity of 90.000 tons exists currently in 
the US market, once the operational problems and the effect of the hurricane will have 
been remedied. 

(77) 

(78) 

It was therefore concluded that there is a likelihood of continuation of dumping and a 
risk of an increase of the volume of imports exerting a downward pressure on prices in 
the Community, at least in the short term, if measures were repealed. 

It is normally the case that an increase of dumped imports would exercise a downward 
pressure on the sales price level and would negatively affect the Community industry's 
profitability  as  well  as  its  financial  recovery  that  was  observed  during  the  period 
considered.  In  this  context,  it  should  be  noted  that  the  level  of  undercutting  would 
substantially increase should measures be repealed.  

EN 

20 

   EN 

 
- Expected shift of US production from MEG to ethanolamine 

(79) 

It  is  expected  that  US  producers  will  to  a  certain  extent  redirect  the  use  of  the  main 
raw material ethylene oxide (EO) from the production of monoethyleneglycol (MEG) 
to the production of ethanolamine.  

(80)  The  raw  material  EO  is  used  in  the  production  of  other  chemical  products  or 
derivatives,  mostly  ethylene  glycols  and  in  particular  monoethyleneglycol  (MEG). 
EO-capacity is limited to only a few locations in the world given its highly explosive 
and  toxic  nature,  subject  to  special  environmental,  health,  security  and  defence 
regulations. As a consequence, the allocation of EO depends upon the market prices of 
its derivatives.  

(81)  Historically, a certain hierarchy existed in price levels: the ethylene price was higher 
than  MEG  and  the  price  for  ethanolamine  was  higher  than  both  ethylene  and  MEG 
prices. However, since the end of 2003, MEG prices in the Community significantly 
increased and they became higher than ethylene prices and at certain periods of time 
even  higher  than  ethanolamine  prices.  As  a  consequence,  EO  has  been  increasingly 
redirected towards MEG production, thereby creating a relative scarcity for EO in the 
market, at the same time contributing to keep ethanolamine prices at a relatively high 
level.  

(82)  However,  Middle  East  countries  are  currently  investing  in  naphta  based  ethylene 
glycol capacity. New production capacity of MEG is expected to become operational 
in the short term in Kuwait (with participation of Dow Chemical), Saudi Arabia and 
Iran.  Given  the  fact  that  naphta  is  an  oil  based  material,  these  countries  will  have  a 
clear comparative advantage in terms of cost. It is therefore reasonable to expect that 
the  MEG  price  will  go  down  in  the  short  term  and,  that  US  producers  will  have 
reduced possibilities to sell MEG in particular in Asia, where the Chinese textile and 
polyester activities already take more than 30% of worldwide MEG consumption. This 
would  be  the  case  in  particular  for  one  of  the  non-cooperating  exporting  producers 
which is currently an important exporter of MEG to Asia. As a consequence, it can be 
expected  that  the  US  producers  would  turn  towards  the  production  of  more 
ethanolamine, thereby exerting a downward pressure on prices and creating a need to 
find  additional  clients  outside  of  the  US  domestic  market  and  thus  resorting  to  the 
Community market.  

- Evolution of prices and possibility to adapt prices to cost of production after the RIP 

(83)  Bearing in mind the current stable situation of the Community industry, the likelihood 
of a recurrence of injury caused by a downward pressure on prices also depends upon 
the  magnitude  of  such  price  decrease  and  the  evolution  of  other  factors,  such  as  the 
cost  of  production  and  the  possibility  to  pass  cost  increases  on  to  clients.  In  this 
respect, it was investigated what was the situation after the RIP. 

(84)  Additional data was collected in order to verify whether the conclusions drawn on the 
basis of the analysis of the period considered and more in particular the RIP remained 
valid during the second half of 2005 and the first five months of 2006. 

(85)  During the second semester of 2005, prices on the Community market for all types of 
ethanolamines  continued  to  rise  by  between  11,4%  and  14,7%.  The  average  price 

EN 

21 

   EN 

 
increase on the US market was even more pronounced with 22%. Hurricane damage in 
Louisiana was primarily responsible for occasional US domestic market shortages.  

(86)  This evolution continued into the first five months of 2006 but at a remarkably lower 
pace:  prices  on  the  Community  market  rose  between  2,8%  and  4%  and  on  the  US 
domestic  market  by  9,9%,  illustrating  a  gradual  curing  of  the  local  operational  and 
damage problems.  

(87)  Compared to the RIP, oil prices increased considerably during the second half of 2005 
and  were  on  average  some  30%  higher,  affecting  further  the  cost  of  naphta,  the 
increase  of  which  began  in  the  second  half  of  the  RIP  (first  semester  of  2005).  US 
import  prices  into  the  Community  seem  to  adjust  less  rapidly  to  the  increase  of  raw 
material  prices,  partly  because  of  the  slower  adjustment  of  contract  prices  and  in  an 
effort  to  protect  market  share  and  partly  because  the  US  producers’  production 
installations are gas based instead of naphta based, with gas price increases lagging on 
oil price increases.  

(88)  The oil prices continued on average to increase by 10% into the first five months 2006, 
negatively  affecting  the  profitability  of  the  Community  industry  because  of  the 
observed bending of the upward sales price evolution.  

(89)  The  investigation  of  the  events  after  the  IP  seems  to  point  to  a  turning  point  in  the 
evolution of the ethanolamine Community market. Sales prices seem to have reached a 
ceiling  and  for  certain  ethanolamine  types  even  showed  a  minor  decrease.  There  are 
indications that an increase of the cost of production will not easily be translated into 
higher sales prices to clients. However, it is unclear at this moment to what extent the 
increasing cost of production and the downward pressure on profitability will entail an 
injurious situation for the Community industry in the medium term.  

- Conclusion on the likelihood of recurrence of injury 

(90) 

(91) 

In  case  measures  were  repealed,  there  is  a  short  term  likelihood  of  a  significant 
increase of dumped US imports to the Community with downward pressure on prices 
as a consequence.  

In  the  medium  term,  this  could  be  aggravated  by  the  increase  of  ethanolamine 
production in the US in reaction to reduced MEG sales opportunities, necessitating the 
US producers to find additional sales markets and thereby redirecting larger volumes 
to the Community market.  

(92)  The  apparent  end  of  the  increase  of  sales  prices  in  the  beginning  of  2006  and  the 
adverse evolution of the cost of production due to the oil price evolution also seem to 
negatively affect the Community industry's profitability.  

(93)  All these factors point to a likelihood of recurrence of injury. However, some of the 

above conclusions are based on events likely to happen in the medium term. 

EN 

22 

   EN 

 
G. COMMUNITY INTEREST 

1. Preliminary remark 

(94) 

(95) 

In  accordance  with  Article  21  of  the  basic  Regulation,  it  was  examined  whether 
maintaining the anti-dumping measures currently in force would be against the interest 
of the Community as a whole. The determination of Community interest was based on 
an  appreciation  of  all  the  various  interests  involved,  i.e.  those  of  the  Community 
industry, importers, traders, wholesalers and industrial users of the product concerned. 

It  should  be  recalled  that  in  the  previous  investigations,  the  imposition  of  measures 
was  not  considered  to  be  against  the  Community  interest.  Furthermore,  the  present 
investigation  is  an  expiry  review,  thus  analysing  a  situation  in  which  anti-dumping 
measures are in place. 

(96)  On this basis it was examined whether, despite the conclusion on the likelihood of a 
continuation  of  dumping  and  likelihood  of  recurrence  of  injury,  compelling  reasons 
exist  which  would  lead  to  the  conclusion,  in  this  particular  case,  that  it  is  not  in  the 
Community interest to maintain measures. 

2. Interest of the Community industry 

(97) 

It  is  recalled  that  dumping  during  the  RIP  was  still  present  and  that  there  exists  a 
likelihood  of  continuation  of  dumping  of  the  product  concerned  originating  in  the 
USA and of recurrence of injury to the Community industry. 

(98)  The  Community  industry  has  proven  to  be  a  viable  and  competitive  industry, 
confirmed  by  the  positive  development  of  most  economic  indicators,  in  particular 
profitability,  cash  flow  and  return  on  investment.  The  previously  imposed  anti-
dumping  measures  have  contributed  to  the  current  price  level  on  the  Community 
market,  allowing  the  Community  industry  to  restore  a  profitability  that  allows  for  a 
sufficient return on investment, to a degree where new capacity investments become 
economically feasible. In particular the US exporting producer INEOS, which after the 
takeover  of  Innovene  became  de  facto  a  Community  producer,  announced  important 
investments  in  the  Community.  The  continuation  of  the  measures  would  also 
contribute to uphold the profitability of this investment project. Therefore, it is in the 
interest  of  the  Community  industry  to  maintain  measures  against  dumped  imports 
from the USA. 

3. Interest of importers and traders/wholesalers 

(99)  Given the lack of cooperation of any trader and wholesaler, it was concluded that the 
absence  or  continuation  of  measures  does  not  affect  these  parties  to  a  great  extent. 
Moreover, the investigation did not show the existence of any unrelated importers; all 
imports into the Community of the product concerned originating in the USA appear 
to transfer over importers related to the US exporting producers. 

(100)  Continuation  of  the  measures  will  not  change  the  current  situation  of  the  related 
importers, who were found to have realised profits during the RIP at margins conform 
to  market  conditions.  Of  course,  discontinuation  of  the  measures  could  be  in  the 
interest  of  the  related  importers  in  case  the  sales  price  level  to  clients  would  not  be 

EN 

23 

   EN 

 
affected  and  in  case  the  US  exporting  producers  would  not  claim  part  or  all  of  the 
resulting  extra  profit  margin  while  setting  the  prices  at  which  related  importers  can 
purchase ethanolamine. 

4. Interest of industrial users 

(101)  Based  on  the  fact  that  the  continuation  of  the  measures  would  represent  a  second 
renewal of anti-dumping measures, particular attention was paid to the interest of the 
industrial users. 

(102)  Only  users  from  the  esterquat  business  for  fabric  softeners  came  forward  in  this 
investigation. One industrial user, representing around 14% of total US imports during 
the  RIP,  replied  to  the  questionnaire,  two  others  made  their  views  known  and 
forwarded  information  on  the  cost  structure  of  production  of  the  finished  goods. 
Esterquats  are  produced  on  the  basis  of  TEA  and  are  used  as  fabric  softeners, 
commercialised  by  the  so-called  ‘soapers’  such  as  Procter  &  Gamble,  Unilever, 
Henkel,  Benckiser  and  Colgate.  These  industrial  users  argue  that  the  increase  of  the 
TEA  price  is  putting  their  businesses  in  danger  and  that  there  exists  a  shortage  of 
supply  on  the  Community  market.  Both  factors  would  be  alleviated  if  the  anti-
dumping measures were allowed to lapse. Moreover, the continuation of production in 
the Community is allegedly in jeopardy if profitability of the esterquat business is not 
improved. 

(103)  It  was  found  that  during  the  RIP  TEA  represented  around  23%  of  the  total  cost  of 
production of esterquats, up from 22% in 2003 but overall comparable to the situation 
that existed in 2002, the first year of the period considered. After the RIP, given the 
price evolution of TEA observed, the incidence of TEA in the full cost of the finished 
product  is  expected  to  be  even  more  important.  It  is  clear  that  an  elimination  of  the 
anti-dumping measures would at least in the short term alleviate the burden of the cost 
of TEA as raw material. This cost reduction, under the hypothesis that the abolition of 
measures would be fully translated into a lower purchase price, would reduce the cost 
of TEA by approximately 7%. The effect in the full cost of production of the finished 
goods  would  be  a  reduction  of  around  1%,  improving  the  profitability  by  the  same 
margin.  

(104)  It was found that profitability in the esterquat business has indeed deteriorated over the 
period considered from around 18% to 8%. However, the decline of the sales price of 
esterquats  by  6%  over  the  period  considered  seems  to  have  been  the  major 
contributing  factor,  causing  the  relative  importance  of  production  costs  in  the  sales 
price to rise by almost 10%. The sector seems to undergo the effect of a move east, in 
particular  to  Russia,  where  lower  cost  solutions  can  be  found  in  general,  but  more 
specifically  for  the  purchase  of  the  other  main  raw  material  ‘thalo  fatty  acid’.  This 
product  of  bovine  origin  can  be  replaced  by  the  vegetal  ‘palmstyrene’  for  which 
supply in the east is more abundant. Moreover, the soapers, for reasons of efficiency, 
demand  a  local  presence  of  their  suppliers,  which  may  be  the  main  reason  for  a 
possible delocalisation out of the Community. 

(105)  Finally,  the  claim  of  a  shortage  of  supply  of  TEA  in  the  Community  market  was 
examined  but  found  not  to  be  substantiated,  based  on  offers  put  forward  by  certain 
producers, which were not accepted by the users concerned.  

EN 

24 

   EN 

 
(106)  In summary, although it is recognised that the increasing price of TEA has exercised a 
negative pressure on  the  cost of  production  of the finished  products of  the  industrial 
users  that  came  forward,  this  pressure  is  rather  limited  and  the  abolition  of  the  anti-
dumping  measures  would  only  provide  a  marginal alleviation.  Other factors, such as 
the  cost  of  other  raw  materials  and  the  requirements  made  by  the  customers  of  the 
products,  were  found  to  have  a  much  more  significant  influence.  Therefore,  it  was 
decided  that  a  continuation  of  the  measures  would  not  significantly  affect  the 
industrial users. 

5. Conclusion on Community interest 

(107)  The investigation has shown that the existing anti-dumping measures have contributed 
to  the  recovery  of  the  Community  industry.  The  Community  industry  would  benefit 
from  a  continuation  of  the  measures  by  upholding  current  profitable  price  levels, 
allowing  for  additional  investment.  If  measures  were  allowed  to  lapse,  this  would 
endanger  this  recovery  process.  Therefore,  the  continuation  of  measures  is  in  the 
interest of the Community industry. 

(108)  Unrelated  importers  do  not  seem  to  exist  and  unrelated  traders/wholesalers  did  not 
come forward. All imports originating in the USA are made via related traders, who, 
while  measures  were  in  place,  were  found  to  have  obtained  market  conform  profit 
margins during the RIP. 

(109)  Furthermore, in the past, the existing measures appear not to have had any significant 
negative effect on the economic situation of the users. On the basis of the information 
collected during the current investigation, any price increase, if at all, resulting from 
the imposition of anti-dumping measures, does not appear to be disproportionate when 
compared  to  the  benefit  of  the  Community  industry  achieved  by  the  removal  of  the 
trade distortion caused by the dumped imports. .  

(110)  Regarding  the  Community  interest,  it  is  therefore  concluded  that  there  are  no 
compelling reasons not to continue imposing the anti-dumping measures currently in 
force against imports of ethanolamines originating in the USA.  

(111)  It  is  therefore  considered  appropriate  to  maintain  the  current  anti-dumping  measures 

against imports of ethanolamines originating in the USA.  

H. ANTI-DUMPING MEASURES 

(112)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which it was intended to recommend that the existing measures be maintained. They 
were also granted a period to submit comments and claims subsequent to disclosure.  

(113)  The investigation showed that spare capacities exist in the country concerned and that 
dumping continued during the RIP. The situation of the Community industry improved 
over  the  period  considered  with  respect  of  most  of  the  injury  factors  mainly  due  to 
favourable market conditions worldwide. On the basis of the positive development of 
the  economic  situation  of  the  Community  industry,  it  could  not  be  established  that 
material  injury  has  continued.  The  investigation  on  the  likelihood  of  recurrence  of 
injury however showed that a number of factors such as the spare capacity existing in 
the USA, the reduced sales opportunities for MEG, the situation of the ethanolamine 

EN 

25 

   EN 

 
both worldwide and at Community level, point to a likelihood of recurrence of injury 
in the medium term.  

(114)  It  follows  from  the  above  that,  as  provided  for  by  Article  11(2)  of  the  basic 
Regulation,  the  anti-dumping  measures  applicable  to  imports  of  ethanolamines 
originating in the United States of America, imposed by Council Regulation (EC) No 
1603/2000,  as  last  amended  by  a  notice  regarding  the  anti-dumping  fixed  duty  rate 
applicable  to  INEOS7,  should  be  maintained.  It  is  further  considered  that  measures 
should be maintained for an additional period of two years only. 

(115)  On the one hand, a likelihood of recurrence of injurious dumping has been established 
based  on  the  facts  that  (i)  dumping  by  US  exporting  producers  has  continued 
notwithstanding  the  measures  in  force,  and  (ii)  there  is  an  expectation  of  increased 
imports into the Community because of existing excess production capacity of 90.000 
tons  in  the  USA  that  will  become  operational  again  by  the  end  of  2006  and 
considering that there is no corresponding domestic demand to absorb this capacity in 
the USA. Additionally, the main non-cooperating US producer currently subject to the 
highest anti-dumping duty and therefore also having the highest incentive to return to 
the  Community  market  in  case  the  measures  lapse,  disposes  of  the  necessary 
distribution  network  because  it  sells  other  chemical  products  in  the  Community 
market. 

(116)  On  the  other  hand,  US  excess  capacity  is  expected  to  disappear  gradually  towards 
2010 at the latest and the planned capacity expansions by one of the cooperating US 
exporting  producers  in  the  Community  are  scheduled  to  come  online  by  the  end  of 
2008,  thus  in  two  years  time.  The  latter  considerations,  combined  with  continuing 
uncertainty about the influence of the evolution of the oil prices on the profitability of 
the Community industry, justify the limitation of the maintenance of the measures to 
two years. 

(117)  After  this  period  of  two  years,  the  Commission  will,  if  appropriate,  initiate  a  new 
review investigation in accordance with Article 11 of the basic Regulation ex officio. 
will apply .  

HAS ADOPTED THIS REGULATION: 

Article 1 

1.  A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  ethanolamines  falling 
within CN codes ex 2922 11 00 (monoethanolamine) (TARIC code 2922 11 00 10), ex 2922 
12  00  (diethanolamine)  (TARIC  code  2922  12  00  10)  and  2922  13  10  (triethanolamine), 
originating in the United States of America. 

2.  The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-Community-
frontier  price,  before  duty,  of  the  products  described  above  and  manufactured  by  the 
companies below shall be as follows:: 

7 

OJ C 306, 10.12.2002, p.2 

EN 

26 

   EN 

 
                                                 
Country 

Company 

Specific fixed duty 

United States of America 

The Dow Chemical Corporation 

EUR 59,25 per ton 

2030 Dow Center 

Midland, Michigan 48674, USA 

(TARIC additional code A115) 

INEOS Americas LLC 

EUR 69,40 per ton 

7770 Rangeline Road 

Theodore, Alabama 36582, USA 

(TARIC additional code A145) 

Huntsman Chemical Corporation 

EUR 111,25 per ton 

3040 Post Oak Boulevard 

PO Box 27707 

Houston, Texas 77056 

(TARIC additional code A116) 

All other companies 

EUR 111,25 per ton 

(TARIC additional code A999) 

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

4. In cases 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, the amount of the 
antidumping duty, calculated on the basis of the amounts set above, shall be reduced by a 
percentage which corresponds to the apportioning of the price actually paid or payable 

Article 2 

This regulation shall enter into force on the day following that of its publication in the Official 
Journal of the European Communities and shall be in force for a period of two years.  

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

Done at Brussels,  

For the Council 
The President 

EN 

27 

   EN