Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain tungsten electrodes originating in the People's Republic of China
Date: 2007-02-13
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, import (EU), metal product, metalworking, tungsten

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 13.2.2007 
COM(2007)54 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of certain tungsten electrodes originating in the People's Republic of 
China 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of 
22 December 1995 on protection against dumped imports from countries not members 
of  the  European  Community,  as  last  amended  by  Council  Regulation  (EC) 
No 2117/2005  of  21  December  2005  ("the  basic  Regulation")  in  the  proceeding 
concerning imports of certain tungsten electrodes originating in the People's Republic 
of China. 

•  General context 

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

•  Existing provisions in the area of the proposal 

Commission Regulation (EC) No 1350/2006 imposing a provisional anti-dumping duty 
on imports of certain tungsten electrodes originating in the People’s Republic of China 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

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

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

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

On  17  December  2005,  the  Commission  opened  an  anti-dumping  investigation  with 
regard to imports into the Community of certain tungsten electrodes originating in the 
People's Republic of China. 

By  Regulation  (EC)  No  1350/2006  of  13  September  2006,  the  Commission  imposed 
provisional anti-dumping duties on these imports.  

The attached proposal for a Council Regulation is based on the definitive findings on 
dumping,  injury,  causation  and  Community  interest  which  confirmed  the  provisional 
findings while introducing some changes to the calculation of the dumping and injury 
margins. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published in the Official Journal no later than 12 March 2007. 

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 2117/2005 of 21 December 2005.  

•  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 reasons: 

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. 

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4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of certain tungsten electrodes originating in the People's Republic of 
China 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’), and in particular Article 9 thereof, 

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

Whereas: 

(1) 

(2) 

(3) 

A. 

PROVISIONAL MEASURES 

The  Commission,  by  Regulation  (EC)  No  1350/20062  (the  ‘provisional  Regulation’) 
imposed  a  provisional  anti-dumping  duty  on  imports  of  certain  tungsten  electrodes, 
currently classifiable within CN codes ex 8101 99 10 and ex 8515 90 00 (CN codes 
since 1 January 2007), originating in the People's Republic of China (‘PRC’). 

It is recalled that the investigation of dumping and injury covered the period from 1 
January 2005 to 31 December 2005 (‘investigation period’ or ‘IP’). With respect to the 
trends relevant for the injury assessment, the Commission analysed data covering the 
period  from  1  January  2001  to  the  end  of  the  investigation  period  (‘period 
considered’). 

B. 

SUBSEQUENT PROCEDURE 

Following  the  imposition  of  a  provisional  anti-dumping  duty  on  imports  of  certain 
tungsten  electrodes  originating  in  the  PRC,  some  interested  parties  submitted 
comments in writing. The parties, who so requested, were also granted an opportunity 
to be heard orally.  

(4) 

The Commission continued to seek and verify all information it deemed necessary for 
its  definitive  findings.  The  oral  and  written  comments  submitted  by  the  parties  were 

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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 250, 13.9.2006, p. 10. 

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examined  and,  where  considered  appropriate, the provisional findings were modified 
accordingly. To this end, the Commission carried out further verification visits at the 
premises of the following companies: 

a) Unrelated importer in the Community 

–  Comptoir Lyonnais de Soudage SA, Lyon, France; 

b) Related companies in the Community 

–  Aleksander Binzel Schweisstechnik GmbH & Co., KG, Busech, Germany; 

–  Binzel France Sarl, Strasbourg, France. 

(5) 

All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which it was intended to recommend the imposition of a definitive anti-dumping duty 
on  imports  of  certain  tungsten  electrodes  originating  in  the  PRC  and  the  definitive 
collection  of  the  amounts  secured  by  way  of  the  provisional  duty.  They  were  also 
granted  a  period  within  which  they  could  make  representations  subsequent  to  this 
disclosure. 

(6) 

The oral and written comments submitted by the parties were considered, and, where 
appropriate, the findings have been modified accordingly. 

(7) 

(8) 

(9) 

C. 

PRODUCT CONCERNED AND LIKE PRODUCT 

The product concerned is tungsten welding electrodes ('TE'), including tungsten bars 
and rods for welding electrodes, containing 94% or more by weight of tungsten, other 
than  those  obtained  simply  by  sintering,  whether  of  not  cut  to  length.  It  is  currently 
classifiable  within  CN  codes  ex  8101  99  10  and  ex  8515  90  00  (CN  codes  since  1 
January  2007).  The  product  concerned  is  used  in  welding  and  similar  processes, 
including tungsten inert gas shielded arc welding, plasma arc welding and cutting and 
thermal spraying. 

One  importer  argued  against  the  conclusion  drawn  in  recital  (13)  of  the  provisional 
Regulation that all TE are considered to constitute a single product for the purpose of 
this proceeding. This importer emphasised the varying properties of different types of 
TE and in particular one patented type developed by the importer himself.  

However,  since  the  beginning  of  the  investigation,  the  Commission  has  been  aware 
that  there  are  several  types  of  TE.  As  well  as  being  sold  in  different  lengths  and 
thicknesses,  TE  can  be  made  either  from  pure  tungsten  or  alloyed  with  a  small 
percentage  of  a  metal  such  as  thorium,  lanthanum,  cerium,  zirconium,  or  a 
combination of those. This alloying affects the properties of the electrodes namely in 
terms  of  ignitability,  stability  and  durability,  allowing  them  to  be  better  tailored  for 
specific applications. Despite the variations in technical features of the different types 
of TE, it is considered that their common basic physical characteristics and degree of 
substitutability  are  sufficient  to  consider  them  as  a  single  product  for  the  purpose  of 
this proceeding as they share the same basic physical and chemical characteristics. 

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(10) 

It should be noted, however, that the different types of TE as mentioned above have 
been  taken  into  consideration  for  the  purpose  of  calculating  the  dumping  and  injury 
margins. 

(11)  The importer referred to in recital (8), also pointed to the differences in the production 
processes between the European and Chinese producers, and claimed that these lead to 
a higher quality of the Chinese TE. Furthermore, an exporting producer claimed that 
its electrodes are of better quality than those of its competitors and in any event better 
tailored  for  the  main  product  manufactured  by  the  group,  the  TIG  welding  torch. 
Regarding  the  latter  claim,  it  should  be  stressed  that  according  to  the  available 
evidence,  any  quality  differences  are  not  such  as  to  prevent  the  use  of  electrodes 
produced  by  other  producers  in  this  specific  application,  even  if  they  would  not 
provide  the  optimal  fitting  to  the  torches.  As  for  the  alleged  general  quality 
differences, as pointed out by the importer, between the TE produced and sold by the 
Community industry in the Community and the TE imported into the Community from 
the PRC, there was no objective information available to corroborate or quantify such 
a  perceived  general  quality  difference.  Therefore  the  TE  produced  and  sold  by  the 
Community industry in the Community and the TE imported into the Community from 
the  PRC  have  been  considered  alike  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation, and no adjustment was made in this respect in the injury calculations. 

(12) 

In the absence of any other comments concerning the product concerned and the like 
product, recitals (12) to (15) of the provisional Regulation are hereby confirmed. 

1. 

Market economy treatment (‘MET’) 

D. 

DUMPING 

(13)  The exporting producer for which MET was rejected, since it did not fulfil the second 
MET  criterion  as  set  out  in  Article  2(7)(c)  of  the  basic  Regulation,  argued  that  the 
discrepancies  found  in  its  accounting  system concerned  only  a  few  cases  and  that  in 
the  meantime  its  system  had  been  improved  in  order  to  meet  the  international 
accounting  standards.  The  company,  however,  did  not  substantiate  this  claim  or 
provide  any  evidence.  Moreover,  from  the  evidence  gathered  during  the  on-spot 
verification it is clear that the practices found were in clear violation of IAS as well as 
Chinese accounting rules, even if they would have been corrected after the IP. 

(14) 

In the absence of any other arguments regarding the granting of MET, the findings as 
set out in recitals (16) to (21) of the provisional Regulation are hereby confirmed.  

2. 

Individual treatment ('IT') 

(15)  Following the provisional disclosure, the Community industry contested the granting 
of  IT  to  the  exporting  producer  referred  to  above  in  recital  (13),  since  discrepancies 
were  found  in  the  company's  accounts  also  with  regard  to  the  recording  of  export 
sales. In this respect it should be noted that the company fulfilled all criteria set out in 
Article 9(5) of the basic Regulation and therefore there was no reason to reject its IT 
claim. Moreover, all evidence related to the company's very few export transactions to 
the Community in the IP could be obtained during the on-spot verification of the main 

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anti-dumping questionnaire, and a single necessary correction to its export data could 
be made immediately. Therefore the claim of the Community industry was rejected. 

(16) 

In the absence of any other comments in this respect, the findings concerning IT as set 
out in recitals (22) to (25) of the provisional Regulation are hereby confirmed. 

3. 

Normal value 

(a) Determination of normal value for the exporting producer in the PRC granted MET 

(17)  Following  the  provisional  disclosure,  the  exporting  producer  concerned  presented  a 
monthly  normal  value  by  linking  the  verified,  average  normal  value  of  the  IP  to  the 
price  development  of  the  main  raw  material,  ammonium  paratungstate  ('APT'),  in 
order to demonstrate that when comparing with the monthly export prices there was no 
more  dumping  towards  the  end  of  the  IP.  Moreover,  this  monthly  normal  value 
suggested  that  the  provisional  finding  of  dumping  was  essentially  caused  by  the 
dramatic price increase of APT, to which the company did not react immediately by 
increasing its export sales prices, but only at the end of the IP. The company asked the 
Commission  to  take  this  development  into  account  and  to  consider  calculating  the 
dumping  margin  based  on  the  last  six  months  or  last  quarter  of  the  IP  solely.  This 
claim, however, had to be rejected, as differing from the IP would be discriminatory 
towards all other companies investigated, which were affected in the same way by that 
general  price  increase  of  APT.  The  request  is also in conflict with the concept of an 
investigation period. Indeed, it amounts to selectively choosing data from part of the 
investigation period and puts thus into question the representativity of the findings.  

(18) 

In that context, further to the provisional disclosure, the Community industry claimed 
that an adjustment should be made to the raw material costs used for the construction 
of  the  normal  value  of  the  company  granted  MET.  In  the  view  of  the  Community 
industry  such  an  adjustment  would  be  justified  pursuant  to  Articles  2(3)  and  2(5)  of 
the basic Regulation, as the Chinese tungsten market is subject to State interference at 
the  macroeconomic  level  and  hence  the  domestic  prices  of  the  main  raw  material, 
APT, have remained consistently lower than the export prices of APT.  

(19)  The above claim was examined by analysing the effects of the Chinese government's 
policies at the macroeconomic level, which might lead to different price levels of APT 
between the domestic and export markets. The investigation showed that the Chinese 
VAT  export  refund  policy  discourages  to  a  certain  extent  the  export  of  tungsten  and 
related products such as APT as exporters are refunded for only part of the VAT paid 
on the domestically sourced raw material. This also implies that producers of TE incur 
an additional cost when exporting. Therefore, an adjustment was made to the normal 
value,  pursuant  to  Article  2(10)  (b)  of  the  basic  Regulation,  to  reflect  the  total  cost 
incurred as a result of the above-mentioned VAT scheme. It is not considered that any 
further adjustment is required. 

(20)  Apart  from  the  above-mentioned  adjustment  to  the  normal  value,  the  general 
methodology as set out in recitals (26) to (33) of the provisional Regulation is hereby 
confirmed. 

(b) Determination of normal value for the exporting producers in the PRC not granted MET 

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(i) Analogue Country  

(21) 

In the absence of any relevant comments regarding the use of the USA as an analogue 
country, recitals (34) to (38) of the provisional Regulation are confirmed. 

(ii) Normal value 

(22) 

In the absence of any comments with regard to the determination of the normal value 
for the exporting producers not granted MET, recitals (39) to (46) of the provisional 
Regulation are definitively confirmed. 

4. 

Export prices 

(23)  Regarding  the  export  prices  of  one  company  granted  IT  as  well  as  the  cooperating 
company  not  granted  MET/IT,  whose  dumping  margin  served  as  the  basis  for  the 
country-wide dumping margin, as explained in recitals (54) to (56) of the provisional 
Regulation,  export  prices  were  revised  by  excluding  two  transactions  falling  outside 
the IP. 

(24)  Following  the  provisional  disclosure,  the  exporting  producer  granted  MET,  whose 
export  sales  to  the  Community  were  made  via  a  related  importer  and  subsequently 
resold to related and unrelated companies in the Community, claimed that the SG&A 
costs of its related companies, used for the construction of the export price pursuant to 
Article 2(9) of the basic Regulation, were overestimated and did not reflect the costs 
generated by the sales of TE. The exporting producer requested the Commission to use 
the  original  SG&A  presented  in  the  questionnaire  replies  of  the  related  distributors, 
which could not been accepted initially in the absence of evidence regarding the cost 
allocation  method.  The  company  presented  supporting  evidence  for  the  allocation 
method  used  originally,  which  was  based  on  an  internal  standard,  used  by  the 
companies historically. The evidence provided was subsequently verified on the spot 
and  it  was  found  that  the  original  allocation  method  corresponded  to  the  costs 
associated with the sales of TE. Hence, the claim was accepted and the SG&A costs of 
the related distributors were adjusted accordingly.  

(25)  With  regard  to  the  profit  margin  of  the  two  unrelated  importers,  one  of  which  was 
provisionally used for the constructed export price of the above-mentioned exporting 
producer, it was found that those profit margins should not be used since their business 
activities  are  not  sufficiently  comparable  to  that  of  the  related  importer  concerned. 
Indeed, the majority of the TE imported by this related importer are further integrated 
into  the  main  product  produced  by  the  group,  the  welding  torch.  It  should  also  be 
noted that the TE are of minor value compared to the end-product. On this basis it was 
concluded  that  the  related  importer's  own  profit  margin  would  constitute  a  more 
accurate basis for a profit margin to construct the export price.  

(26)  No other comments were received with regard to export prices, and hence the general 
methodology as set out in recitals (47) and (48) of the provisional Regulation, with the 
exception  of  the  use  of  the  related  importer's  own  profit  margin  for  the  constructed 
export price of the producer granted MET, as described above, is hereby confirmed.  

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5. 

Comparison 

(27)  The normal values, as described above in recitals (17) to (20) and (22) and the export 
prices,  revised  as  explained  above  in  recitals  (23)  to  (26)  were  compared  on  an  ex-
works  basis.  In  order  to  ensure  a  fair  comparison  between  the  normal  value  and  the 
export  price,  account  was  taken,  in  accordance  with  Article  2(10)  of  the  basic 
Regulation,  of  differences  in  factors  which  were  claimed  and  demonstrated  to  affect 
prices and price comparability. The factors for which adjustments were accepted were 
indirect taxes as described in recital (19), transport, insurance, handling and ancillary 
costs, packing, credit, and bank charges. 

6. 

a) 

Dumping margin 

For the cooperating exporting producer granted MET 

(28) 

In the light of the above, the definitive dumping margin, expressed as a percentage of 
the CIF Community frontier price, duty unpaid, is as follows:  

Company 

Definitive dumping 
margin 

Shandong Weldstone Tungsten Industry Co., Ltd 

17 % 

b) 

For the cooperating exporting producers granted IT 

(29)  Following  the  adjustment  to  the  export  price  of  the  other  company  granted  IT,  the 
definitive dumping margins, expressed as a percentage of the CIF Community frontier 
price, duty unpaid, are as follows:  

Company 

Definitive dumping 
margin 

Shaanxi Yuheng Tungsten & Molybdenum Industrial Co., Ltd 

107,3 % 

Beijing Advanced Metal Materials Co., Ltd 

128,4 % 

c) For all other exporting producers 

(30)  Following the adjustment to the export price of the cooperating exporting producer not 
granted  MET/IT,  the  definitive  country-wide  level  of  dumping  is  established  at 
160,2 % of the CIF Community frontier price, duty unpaid.  

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1. 

Community production 

E. 

INJURY 

(31) 

In the absence of comments concerning Community production, recitals (57) to (58) of 
the provisional Regulation are hereby confirmed. 

2. 

Definition of the Community industry 

(32) 

In  the  absence  of  comments  concerning  the  definition  of  the  Community  industry, 
recital (59) of the provisional Regulation is hereby confirmed. 

3. 

Community consumption 

(33) 

In  the absence of comments  concerning the Community consumption, recital (60) of 
the provisional Regulation is hereby confirmed. 

4. 

Imports into the Community from the country concerned 

(34) 

In the absence of any comments concerning the imports from the country concerned, 
recitals (61) to (66) of the provisional Regulation are hereby confirmed. 

5. 

Situation of the Community industry 

(35) 

In  the  absence  of  comments  concerning  the  situation  of  the  Community  industry, 
recitals (67) to (93) of the provisional Regulation are hereby confirmed. 

F. 

CAUSATION 

(36) 

In the absence of any new and substantiated information or argument in this respect, 
recitals (94) to (114) of the provisional Regulation are hereby confirmed. 

G. 

COMMUNITY INTEREST  

(37)  Three  exporters,  one  exporters'  association  and  one  importer  reiterated  their  concern 
that  that  the  provisional  duties  would  exclude  the  Chinese  exporters  from  the 
Community market. Given that there are only two Community producers and virtually 
no imports from other countries, this would allegedly eliminate competition from the 
Community market, to the detriment of users. Furthermore, it has been alleged that the 
two Community producers have a history of controlling the prices in the Community 
market through anti-competitive practices. However, these parties did not provide any 
additional  evidence  to  substantiate  their  claims  nor  has  any  indication  been  found  in 
the course of the investigation which would point to such practices. 

(38)  As stated in the provisional Regulation,  the  purpose  of  any  anti-dumping  measure  is 
not to stop access to the Community market for exporters in third countries, but rather 
to restore a level playing field that had been distorted by unfair trade practices. 

(39)  No  evidence  for  the  alleged  anti-competitive  behaviour  was  found  during  the 
investigation, nor has the Community industry enjoyed abnormally high profits, even 
before  the  Chinese  imports  gained  a  substantial  foothold  in  the  Community  market. 
Besides the two existing Community producers, the level of measures imposed should 

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allow at least some exporting producers from the PRC to continue selling the product 
concerned in the Community market. Indeed, the purpose of the duties, when based on 
injury,  is  merely  to  raise  the  import  prices  to  a  level  which  allow  the  Community 
industry to achieve a normal profit.  

(40)  One  importer  further  claimed  that  the  duties  would  threaten  the  existence  of  his 
company. Moreover, this importer markets a unique type of high-quality electrode and 
if he were to go out of business, he claims, end-users of TE would suffer in terms of 
innovation and quality of service.  

(41)  However,  as  stated  in  the  provisional  Regulation,  the  general  effect  on  importers  of 
any increase in the prices of imports of the product concerned should be to restore fair 
competition  with  Community  producers  and  should  not  prevent  the  importers  from 
selling the product concerned. Moreover, the high profit margins found at the level of 
the  cooperating  importers  make  it  unlikely  that  they  will  be  driven  out  of  business 
even  if  the  volume  of  imports  decreases  with  the  imposition  of  measures.  The 
distributor/dealer’s  role  in  the  welding  electrode  market  is  an  essential  one  because  it  offers 
the  end-user  the  benefits  of  a  one-stop  shop  for  all  the  latter’s  needs  regarding  welding. 
Therefore, it is highly likely that those agents will remain an important feature of the market 
even after measures are imposed. 

(42) 

It  was  also  argued  by  one  party  that  the  TE  imported  by  their  group  are 
complementary  to  the  welding  torches  manufactured  by  the  same  company.  If  the 
users  were  induced  as  a  consequence  of  the  anti-dumping  measures  to  switch  to 
cheaper  electrodes  from  other  suppliers,  the  performance  and  durability  of  the 
company's  torches  would  suffer,  with  an  adverse  impact  on  their  whole  business. 
However  it  is  considered  that,  even  if  the  customers  of  these  users  were  unaware  of 
such  adverse  technical  consequences,  the  relatively  low  level  of  the  duties  proposed 
for  this  exporter  is  not  likely  to  provide  an  incentive  for  them  to  switch  to  other 
sources of supply. Furthermore, no evidence of the alleged negative consequences was 
submitted. 

(43) 

In the absence of substantially new information or argument in this particular respect, 
recitals (115) to (132) of the provisional Regulation are hereby confirmed. 

H. 

DEFINITIVE ANTI-DUMPING MEASURES 

1. 

Injury elimination level 

(44)  Further to the disclosure of provisional findings, the Community industry claimed that 
the  adjustment  mentioned  in  recital  (136)  of  the  provisional  Regulation,  for  the 
functions of importers, was excessive, for two reasons: 

–  Not  all  importers  would  perform  all  the  functions  mentioned  in  that  recital, 
namely  packaging,  stocking,  quality  control,  branding,  and  in  some  cases  a 
physical  processing  of  the  electrodes.  In  some  cases,  the  electrodes  would  be 
exported  from  the  PRC  in  a  condition  that  does  not  require  most  of  these 
operations to be performed by the importer. 

–  Even  if  such  functions  were  to  be  performed  by  a  given  importer,  its  costs, 
according to  the  Community industry's  estimates,  would be significantly smaller 
than the amount of the adjustment provisionally established by the Commission. 

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(45)  The  Commission  has  further  investigated  this  issue  by,  among  others,  obtaining 
detailed  information  from  an  additional  unrelated  importer.  The  investigation  has 
shown that both the Community-produced and imported electrodes are sold through a 
wide variety of channels, and are often re-sold several times between the producer and 
the  end-user.  The  players  involved  in  this  market  perform,  to  different  extents, 
functions  such  as  quality  control,  storage  and  logistics,  re-packaging,  marketing  and 
after-sales support. Having examined all the available information, it was considered a 
more  systematic  and  uniform  way  to  take  into  account  the  functions  of  importers  to 
make  a  comparison  of  import  prices  and  Community  industry  prices  adjusted  to  a 
common level of trade. 

(46)  For  this  purpose,  the  sales  of  the  like  product  by  the  Community  industry  in  the 
Community market were used as a basis to estimate the differences in prices resulting 
from different levels of trade, i.e. traders, retailers, end-users and original equipment 
manufacturers. This adjustment for level of trade was therefore applied instead of the 
adjustment mentioned in recital (136) of the provisional Regulation.  

(47)  One  exporter  pointed  out  a  mistake  in  the  sales  data  used  for  the  calculation  of  his 
injury margin. Other clerical errors in the data used for the injury margins were also 
corrected. As a result of these corrections, the injury margin of one exporter and the 
country-wide injury margin have been reduced. 

(48) 

It  was  also  found  that  due  to  the  infrequent  time  pattern  of  exports  of  some  PRC 
exporters,  and  the  evolution  the  USD/EUR  exchange  rate  during  the  IP,  the  use  of 
monthly  exchange  rates  gave  a  significantly  more  accurate  result  than  the  use  of  a 
single annual rate. The calculations for all exporters were revised accordingly. 

(49)  One  exporter  and  one  exporters'  association  argued  that  the  lead  time  between  the 
purchase of the raw material to the sale of a finished tungsten electrode to a dealer is 
significantly  higher  for  the  PRC  exporters  than  for  the  Community  industry,  due  to 
longer transport time and custom procedures. This would mean that the prices of the 
PRC exporters naturally take a longer time to react to the raw material price increases 
than those of the Community industry and, the importer claimed, this should be taken 
into account in the injury calculation. 

(50)  While it is recognised that the time lag between the product being manufactured and 
delivery at the customer is greater for Chinese exporters, this is not considered to be a 
relevant  factor  for  the  injury  determination.  The  data  used  in  the  investigation  are 
defined by invoice date, which normally corresponds to the date on which the goods 
have been shipped from the factory. There is also a time lag between the time the price 
is negotiated on the basis on the current levels of raw material prices and the shipping 
date, but there is no reason to assume that this would be greater for Chinese producers 
than for those in the Community. Therefore, this argument has to be rejected. 

(51)  Accordingly,  the  definitive  weighted  average  injury  margins  for  companies  granted 

either IT or MET are: 

EN 

13 

   EN 

 
Company 

Definitive injury 
margin 

Shandong Weldstone Tungsten Industry Co. Ltd. 

22,7 % 

Shaanxi Yuheng Tungsten & Molybdenum Industrial 
Co. Ltd. 

Beijing Advanced Metal Materials Co. Ltd. 

All other companies 

2. 

Form and level of the duties 

41,0 % 

38,8 % 

63,5 % 

(52) 

In  the  light  of  the  foregoing  and  in  accordance  with  Article  9(4)  of  the  basic 
Regulation, a definitive anti-dumping duty should be imposed at the level sufficient to 
eliminate  the  injury  caused  by  the  imports  without  exceeding  the  dumping  margin 
found. 

(53)  On the basis of the above, the definitive duties are as follows: 

Company 

Definitive duty 

Shandong Weldstone Tungsten Industry Co., Ltd. 

17,0 % 

Shaanxi  Yuheng  Tungsten  &  Molybdenum  Industrial 
Co., Ltd. 

Beijing Advanced Metal Materials Co., Ltd. 

All other companies 

41,0 % 

38,8 % 

63,5 % 

(54)  The  individual  company  anti-dumping  duty  rates  specified  in  this  Regulation  were 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  they 
reflect  the  situation  found  during  that  investigation  with  respect  to  these  companies. 
These  duty  rates  (as  opposed  to  the  country-wide  duty  applicable  to  'all  other 
companies')  are  thus  exclusively  applicable  to  imports  of  products  originating  in  the 
country  concerned  and  produced  by  the  companies  and  thus  by  the  specific  legal 
entities mentioned. Imported products produced by any other company not specifically 
mentioned in the operative part of this Regulation with its name and address, including 
entities  related  to  those  specifically  mentioned,  cannot  benefit  from  these  rates  and 
shall be subject to the duty rate applicable to 'all other companies'. 

EN 

14 

   EN 

 
(55)  Any claim requesting the application of these individual company anti-dumping duty 
rates (e.g. following a change in the name of the entity or following the setting up of 
new  production  or  sales  entities)  should  be  addressed  to  the  Commission3  forthwith 
with all relevant information, in particular any modification in the company's activities 
linked  to  production,  domestic  and  export  sales  associated  with,  for  example,  that 
name  change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  the 
Regulation  will  then  be  amended  accordingly  by  updating  the  list  of  companies 
benefiting from individual duty rates.  

(56) 

In  order  to  ensure  a  proper  enforcement  of  the  anti-dumping  duty,  the  residual  duty 
level  should  not  only  apply  to  the  non-cooperating  exporters,  but  also  to  those 
companies  which  did  not  have  any  exports  during  the  IP.  However,  the  latter 
companies are invited, when they fulfil the requirements of Article 11(4) of the basic 
Regulation, second paragraph, to present a request for a review pursuant to that Article 
in order to have their situation examined individually. 

3. 

Undertakings 

(57)  Following the disclosure of the essential facts and considerations on the basis of which 
it  was  intended  to  recommend  the  imposition  of  definitive  anti-dumping  duties,  two 
exporting producers in the PRC offered price undertakings in accordance with Article 
8(1) of the basic Regulation.  

(58)  The  product  concerned  is  characterised  by  a  considerable  number  of  product  types 
with  significant  price  variations  between  them.  The  two  exporting  producers  offered 
only one minimum import  price ('MIP') for  all product types at a level which  would 
not  have  guaranteed  the  elimination  of  injurious  dumping  for  all  products.  It  also 
needs to be noted that the high number of product types makes it virtually impossible 
to  establish  meaningful  MIPs  for  each  product  type  which  could  be  properly 
monitored  by  the  Commission  even  if  the  exporting  producers  had  offered  different 
MIPs for each of them.  

(59)  Moreover  during  the  IP  the  product  concerned  showed  a  considerable  volatility  in 
prices  and  therefore  it  is  not  suitable  for  a  fixed  price  undertaking.  In  order  to 
overcome  this  problem both  companies offered to index the MIP on the basis of the 
volatility of the APT prices. However, as no close correlation between the volatility of 
APT prices and the volatility of TE prices could be established during the IP for one of 
the exporting producers, the indexation of the MIP on basis of the APT prices was not 
feasible for this particular exporting producer. 

(60)  Furthermore one of the exporting producers has several related companies in the EC 
and  these  related  companies  also  sell  other  products  to  the  same  customers.  This 
complex sales structure raises the risk of circumvention.  

(61)  On  the  basis  of  the  above,  it  was  concluded  that  these  undertaking  offers  had  to  be 

rejected.  

3 

European Commission 
Directorate-General for Trade 
Direction H, office J-79 5/16 
1049 Brussels/Belgium 

EN 

15 

   EN 

 
                                                 
 
 
 
4. 

Definitive collection of provisional duties and special monitoring 

(62) 

In view of the magnitude of the dumping margins found and in the light of the level of 
the  injury  caused  to  the  Community  industry,  it  is  considered  necessary  that  the 
amounts  secured  by  way  of  the  provisional  anti-dumping  duty,  imposed  by  the 
provisional  Regulation,  i.e.  Regulation  (EC)  No  1350/2006,  should  be  definitively 
collected  to  the  extent  of  the  amount  of  the  definitive  duties  imposed.  Where  the 
definitive duties are lower than the provisional duties, amounts provisionally secured 
in  excess  of  the  definitive  rate  of  anti-dumping  duties  shall  be  released.  Where  the 
definitive duties are higher than the provisional duties, only the amounts secured at the 
level of the provisional duties shall be definitely collected. 

(63) 

In order to minimise the risks of circumvention due to the high difference in the duty 
rates, it is considered that special measures are needed in this case to ensure the proper 
application  of  the  anti-dumping  duties.  These  special  measures,  which  only  apply  to 
companies for which an individual duty rate is introduced, include the following: 

(64)  The  presentation  to  the  customs  authorities  of  the  Member  States  of  a  valid 
commercial invoice, which shall conform to the requirements set out in the Annex to 
this Regulation. Imports not accompanied by such an invoice shall be made subject to 
the residual anti-dumping duty applicable to all other exporters. 

(65) 

It  is  recalled  that  should  the  exports  by  the  companies  benefiting  from  lower 
individual duty rates increase significantly in volume after the imposition of the anti-
dumping measures, such an increase in volume could be considered as constituting in 
itself  a  change  in  the  pattern  of  trade  due  to  the  imposition  of  measures  within  the 
meaning of Article 13(1) of the basic Regulation. In such circumstances, and provided 
the  conditions  are  met,  an  anti-circumvention  investigation  may  be  initiated.  This 
investigation may, inter alia, examine the need for the removal of individual duty rates 
and the consequent imposition of a country-wide duty. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1.  A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  tungsten  welding 
electrodes, including tungsten bars and rods for welding electrodes, containing 94 % or more 
by  weight  of  tungsten,  other  than  those  obtained  simply  by  sintering,  whether  or  not  cut  to 
length, falling within CN codes ex 8101 99 10 and ex 8515 90 00 (TARIC codes 8101 99 10 
10 and 8515 90 00 10) and originating in the People’s Republic of China. 

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

EN 

16 

   EN 

 
Company 

Anti-Dumping Duty  TARIC Additional Code 

Shandong  Weldstone  Tungsten  Industry 
Co., Ltd. 

Shaanxi 
Yuheng 
Molybdenum Industrial Co., Ltd. 

Tungsten 

& 

Beijing  Advanced  Metal  Materials  Co., 
Ltd. 

All other companies 

17,0 % 

41,0 % 

38,8 % 

63,5 % 

A754 

A755 

A756 

A999 

3.  The  application  of  the  individual  duty  rates  specified  for  the  companies  mentioned  in 
paragraph 2 shall be conditional upon presentation to the customs authorities of the Member 
States of a valid commercial invoice, which shall conform to the requirements set out in the 
Annex. If no such invoice is presented, the duty rate applicable to all other companies shall 
apply.  

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

Article 2 

Amounts  secured  by  way  of  provisional  anti-dumping  duties  pursuant  to  Commission 
Regulation (EC) No 1350/2006 on imports of certain tungsten electrodes, including tungsten 
bars  and  rods  for  welding  electrodes,  containing  94%  or  more  by  weight  of  tungsten,  other 
than those obtained simply by sintering, whether or not cut to length, falling within CN codes 
ex  8101  99  10  and  ex  8515  90  00  (TARIC  codes  8101  99  10  10  and  8515  90  00  10)  and 
originating  in  the  People’s  Republic  of  China  shall  be  definitively  collected.  The  amounts 
secured in excess of the amount of the definitive anti-dumping duties shall be released. Where 
the  definitive  duties  are  higher  than  the  provisional  duties,  only  the  amounts  secured  at  the 
level of the provisional duties shall be definitely collected. 

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

Article 3 

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

Done at Brussels, […] 

EN 

For the Council 
The President

17 

   EN 

 
 
 
ANNEX 

The  valid  commercial  invoice  referred  to  in  Article  1(3)  of  this  Regulation  must  include  a 
declaration signed by an official of the company, in the following format: 

(1) 

(2) 

The  name  and  function  of  the  official  of  the  company  which  has  issued  the 
commercial invoice. 

The  following  declaration  “I,  the  undersigned,  certify  that  the  [volume]  of  tungsten 
electrodes  sold  for  export  to  the  European  Community  covered  by  this  invoice  was 
manufactured  by  (company  name  and  address)  (TARIC  additional  code)  in  (country 
concerned).  I  declare  that  the  information  provided  in  this  invoice  is  complete  and 
correct.” 

Date and signature 

EN 

18 

   EN