Council Regulation (EC) No 1420/2007 of 4 December 2007 imposing a definitive anti-dumping duty on imports of silico-manganese originating in the People's Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese originating in Ukraine
Date: 2007-12-04
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, anti-dumping legislation, ferro-alloy, import, manganese, originating product, semi-metal

5.12.2007

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 1420/2007

of 4 December 2007

imposing a definitive anti-dumping duty on imports of silico-manganese originating in the People's
Republic of China and Kazakhstan and terminating the proceeding on imports of silico-manganese
originating in Ukraine

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

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

(3)

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

Whereas:

(1)

(2)

A. PROCEDURE

1. Initiation

On 6 September 2006, pursuant to Article 5 of the basic
the Commission announced by a notice
Regulation,
(notice of initiation) published in the Official Journal of
the European Union (2), the initiation of an anti-dumping
proceeding with regard to imports into the Community
of
(including ferro-silico-manganese)
(SiMn) originating in the People's Republic of China
(PRC), Kazakhstan and Ukraine (the countries concerned).

silico-manganese

The proceeding was
initiated following a complaint
lodged on 24 July 2006 by the Comité de Liaison des
(the
Industries
representing a
complainant) on behalf of producers

(EUROALLIAGES)

Ferro-Alliages

de

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

(2) OJ C 214, 6.9.2006, p. 14.

(4)

(5)

major proportion,
in this case more than 50 % of the
total Community production of SiMn (the complainant
producers). The complaint contained prima facie evidence
of dumping of SiMn originating in the
countries
concerned and of material
injury resulting therefrom,
which was considered sufficient to justify the initiation
of a proceeding.

the Commission
One interested party claimed that
should have
initiated this proceeding also against
imports originating in India. At the time of the initiation
of the current proceeding, however, the Commission did
not have sufficient evidence of injurious dumping at its
disposal
that would have justified the initiation of a
proceeding against imports originating in India in line
with the requirements of Article 5(2) of the basic Regu-
lation.

2. Parties concerned by the proceeding

the

producers

in
and their

exporting
importers/traders

The Commission officially advised the complainant, the
complainant producers and other known Community
countries
producers,
concerned,
associations,
suppliers and users known to be concerned and the
representatives of the exporting countries concerned, of
the initiation of the proceeding. Interested parties were
given the opportunity to make their views known in
writing and to request a hearing within the time limit
set in the notice of initiation. All interested parties, who
there were particular
so requested and showed that
reasons why they should be heard, were granted a
hearing.

the Commission sent

In order to allow exporting producers in the PRC and in
Kazakhstan to submit a claim for market economy
treatment (MET) or individual treatment (IT), if they so
wished,
to the
exporting producers known to be concerned as well as
the PRC and Kazakhstan. Four
to the authorities of
in the PRC and one
exporting producer groups
exporting
claimed MET
pursuant to Article 2(7) of the basic Regulation, or IT
should the investigation establish that they did not meet
the conditions for MET.

in Kazakhstan

claim forms

producer

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(6)

(7)

(8)

the apparent
the
in

large number of exporting
In view of
producers
the
importers
PRC and
Community, sampling was envisaged in the notice of
initiation for the determination of dumping and injury,
in accordance with Article 17 of the basic Regulation.

in

all

exporting producers

In order to enable the Commission to decide whether
if so,
sampling would be necessary and,
to select a
sample,
in the PRC and
Community importers were requested to make them-
selves known to the Commission and to provide, as
specified in the notice of initiation, basic information
on their activities related to the product concerned
during the period of 1 July 2005 to 30 June 2006.

As far as the exporting producers in the PRC are
concerned, given that only four groups of companies
having export sales of SiMn to the Community during
the IP indicated their willingness to be included in the
sample, it was decided that sampling was not necessary.

(9) With regard to importers into the European Community,
only two unrelated importers made themselves known
and provided the requested information in due time.
Therefore,
sampling was not
necessary.

it was decided that

(10)

The Commission sent questionnaires to all parties known
to be concerned and to all other companies that made
themselves known within the deadlines set out in the
notice of initiation. Questionnaire replies were received
exporting
from four Community producers,
producer groups in the PRC, the sole Kazakh exporting
producer,
two
unrelated importers and nine unrelated users in the
Community.
submitted
addition,
comments without replying to the questionnaire.

three Ukrainian exporting producers,

users

four

two

In

the proceeding and all submissions made by them have
been disregarded.

(12)

The Commission sought and verified all the information
it deemed necessary for the purpose of MET/IT, in the
case of the PRC and Kazakhstan, and for the determi-
nation of dumping, resulting injury and Community
for all countries concerned. Verification visits
interest
the following
the premises of
were carried out at
companies:

(a) Community producers

— Eramet Comilog Manganese, Paris, France

— Ferroatlantica S.L., Madrid, Spain

— Huta Łaziska SA, Łaziska Górne, Poland

— OFZ, a.s., Istebne, Slovakia.

(b) Users in the Community

— Compañía Española de Laminación, S.L., Castell-

bisbal, Spain

— Mittal Steel Poland SA (Arcelor SA), Kraków,

Poland.

(c) Unrelated importers

— Metalleghe S.P.A., Brescia, Italy.

(d) Exporting producers in the PRC

— Minmetals Group

(11) One of

the exporting producer groups in the PRC,
however, subsequently did not agree to an envisaged
on-the-spot verification of the information provided in
their MET/IT claims and questionnaire replies. Conse-
quently, after having advised the companies concerned
of the consequences of non-cooperation as stipulated in
Article 18(1) of the basic Regulation, the Commission
has in accordance with the provisions of Article 18
considered the said companies as not cooperating in

— Minmetals (Guizhou) Ferro-Alloys Co., Ltd,

Guiyang

— Guiyang Huaxi Minmetals Ferro-Alloys Co.,

Ltd, Qingzhen

— China Minmetals

Shenzhen

Co.,

Ltd,

Shenzhen

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— Minmetals Shanghai Pudong Trading Co., Ltd,

— JSC Stakhanov Ferroalloys Plant

(Stakhanov),

Shanghai

Stakhanov

— China National Minerals Co., Ltd, Beijing

— OJSC Zaporozhye Ferroalloys Plant (Zaporozhye),

Zaporozhye.

— Minmetals Orient Import & Export Trading

Co., Ltd, Beijing.

(g) Related traders in Switzerland

— Jilin Group

— Jilin Ferroalloys Co., Ltd, Jilin City

— Jilin Ferroalloy Imp & Exp Co., Ltd, Jilin City.

— Shanxi Jinneng Group

— Shanghai Jinneng International Trade Co. Ltd,

Shanghai

— Datong Jinneng Jinli

Ferroalloy Co. Ltd,

— Steelex SA, Lugano,
Ferroalloys Plant

related to PJSC Nikopol

— ENRC, Kloten, related to OJSC Kazchrome.

(13)

In light of the need to establish a normal value for the
exporting producers in the PRC and Kazakhstan to which
MET might not be granted, a verification to establish
normal value on the basis of data from an analogue
country took place at
the following
producer and its related sales company in the United
States of America (USA):

the premises of

— Eramet Marietta, Inc., Marietta, Ohio (producer)

Jinneng Group Jinguan Ferroalloy,

— Eramet North America, Inc., Coraopolis, Pennsylvania

(related sales company).

Datong

— Shanxi
Datong

— Datong Jinneng Industrial Silicon Co. Ltd,

3. Investigation period

Datong.

(e) Exporting producer in Kazakhstan

— OJSC Kazchrome (Kazchrome), Aktyubinsk and

Aksu.

(f) Exporting producers in Ukraine

— PJSC Nikopol Ferroalloys Plant

(NFP), Nikopol

and its related traders

(14)

The investigation of dumping and injury covered the
period from 1 July 2005 to 30 June 2006 (the investi-
gation period or IP). The examination of trends relevant
for the assessment of injury covered the period from 1
the investigation period
January 2002 to the end of
(period considered).

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(15)

The product concerned is silico-manganese (including
(SiMn) originating in the PRC,
ferro-silico-manganese)
Kazakhstan and Ukraine
concerned),
normally declared under CN codes 7202 30 00 and
ex 8111 00 11.

(the product

— SPIG ‘Interpipe’ Corporation, Dniepopetrovsk

— Nikopolskie Ferrosplavy LLC, Dniepopetrovsk

(16)

The product concerned is used in the steel industry for
deoxidization and as an alloy. It is mainly produced from
manganese ore and silicon which are mixed together and
brought to fusion temperatures in a furnace.

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(17)

(18)

SiMn exists in different qualities and it can have different
contents of iron (Fe), manganese (Mn), silicon (Si) and
carbon (C). As far as the carbon content is concerned, a
distinction can be made between SiMn with a very low
content of carbon, which is of a higher quality (and
attracts a higher price), and SiMn with higher carbon
content, which can be
the normal
quality. SiMn is sold in different powder, grain or lump
sizes. Despite these differences, all qualities and sizes have
been considered as a single product since they share the
same main chemical and physical characteristics and
main uses.

considered as

(1) business decisions are made in response to market
signals, without significant State interference, and
costs reflect market values;

(2) firms have one clear set of basic accounting records,
which are independently audited in line with inter-
national accounting standards and are applied for all
purposes;

2. Like product

The investigation showed that SiMn produced and sold
in the Community by the Community industry, SiMn
produced and sold on the domestic markets of PRC,
Kazakhstan and Ukraine, and on the domestic market
the USA, which finally served as an analogue
of
country, and SiMn imported into the Community from
the PRC, Kazakhstan and Ukraine, have essentially the
same basic chemical and physical characteristics and
the same basic uses. They are therefore considered to
be alike within the meaning of Article 1(4) of the basic
Regulation.

(3) there are no significant distortions carried over from

the former non-market-economy system;

(4) bankruptcy and property laws guarantee stability and

legal certainty;

(5) exchange rate conversions are carried out at market

rates.

(21)

(19) One

claimed

declared

normally

that
under

exporting producer

unwrought
manganese,
CN code
8111 00 11, should not be covered by the investigation.
In this regard, it is confirmed that the product concerned
is silico-manganese, as stated at
recital 15 and not
unwrought manganese, but it also includes unwrought
silico-manganese. While SiMn is generally declared
under CN code 7202 30 00, it may also, depending on
the iron content, be declared as unwrought
silico-
manganese or
silico-manganese powders under CN
code 8111 00 11.

the

given

producers within

Four groups of Chinese exporting producers initially
requested MET pursuant to Article 2(7)(b) of the basic
Regulation and replied to the MET claim form for
exporting
deadlines.
However, one of these groups decided subsequently not
to cooperate with the investigation (as mentioned in
the
recital 11 above). Thus, only the MET claims of
exporting
cooperating
remaining
producer groups listed in recital 12 were considered.
All of
the
related to the
product
producers and involved in the sales of
the product
is the Commission's consistent
it
concerned.
practice
related
a group of
to examine whether
companies as a whole fulfils the conditions for MET.

these groups included both producers of

concerned and companies

Chinese

Indeed,

three

C. DUMPING

1. Market Economy Treatment (MET)

(20)

Pursuant to Article 2(7)(b) of the basic Regulation,
in
anti-dumping investigations concerning imports orig-
inating in the PRC and in Kazakhstan, normal value
shall be determined in accordance with paragraphs 1 to
6 of the said Article for those producers which have
shown that they meet the criteria laid down in Article
i.e. where it is demon-
2(7)(c) of the basic Regulation,
that market
strated by
economy conditions prevail
the manu-
the like product. Briefly, and for
facture and sale of
ease of reference only,
in
these criteria are set out
summarised form below:

such exporting producers

in respect of

(22)

The sole Kazakh exporting producer
requested MET
pursuant to Article 2(7)(b) of the basic Regulation and
replied to the MET claim form for exporting producers
within the given deadlines.

(23)

For the cooperating exporting producers the Commission
sought all information deemed necessary and verified the
information submitted in the MET claim at the premises
of the companies in question as deemed necessary.

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1.1. MET determination regarding exporting producers in the

(29)

PRC

The interested parties were given an opportunity to
comment on the
comments
received from two Chinese exporting producer groups
did not provide any new evidence that would change
the findings regarding the MET determination.

findings. The

above

(24)

The investigation revealed that MET could not be granted
to any of the Chinese exporting producers listed in recital
12 as none of these groups met criterion 1 set out in
Article 2(7)(c) of the basic Regulation and, in addition,
one of them failed to meet criterion 2 and another one
failed to meet criterion 3. Furthermore, for the group not
meeting criteria 1 and 2 strong doubts remained with
regard to criterion 3 and this group, in any case, failed to
submit a complete set of MET claim forms and ques-
tionnaire replies of
its related companies involved in
the production and/or trading of the product concerned.

this criterion. All of

(25) As far as criterion 1 is concerned, none of the Chinese
groups of companies concerned has demonstrated to
fulfil
the groups of companies
were found to be ultimately State owned and failed to
present evidence that could be considered sufficient to
in
interference
remove doubts of
could not be
management decisions. Therefore,
excluded that
significant
State control and interference.

significant State
it

the companies were under

(26)

(27)

in addition to the non-
For one group of companies,
it was established that it
compliance with criterion 1,
there are no distortions
could not demonstrate that
carried over
former non-market-economy
system (criterion 3), given certain uncompensated loan
benefits one company in the group had received from its
State-owned mother company.

from the

for

companies,

another group of

Furthermore,
in
addition to the non-compliance with criterion 1, it was
established that it could not demonstrate that there are
no distortions carried over from the former non-market-
economy system, in particular in view of the existence of
barter trade during the investigation period. This group
also failed to demonstrate that the accounts of several of
its verified entities were
independently audited in
accordance with international accounting standards, as
the application of sound and basic accounting principles,
in particular with regard to depreciation of fixed assets,
had been overruled by the parent company and this
infringement had been accepted by the companies'
auditors.

(28) Moreover, within the same group at least one company
which appeared to be involved in trading of the product
concerned had submitted neither a MET claim form nor
a questionnaire reply, putting in doubt the reliability of
the information provided.

(30) On the basis of the above, none of the Chinese exporting
they
producer groups of companies have shown that
fulfil all
the
in Article 2(7)(c) of
basic Regulation and, thus, could not be granted MET.

the criteria set out

(31)

(32)

1.2. MET determination regarding the sole exporting producer

in Kazakhstan

The sole Kazakh exporting producer showed that
it
fulfilled all five criteria set out in Article 2(7)(c) of the
basic Regulation and was therefore granted MET. The
exporting producer and the Community industry (see
recital 91) were given an opportunity to comment on
the MET findings. The comments received from the
Community industry did not provide any new evidence
that would change the findings
regarding the MET
determination.

2. Individual treatment (IT)

to Article 2(7)(a) of

the basic Regulation, a
Pursuant
countrywide duty,
is established for countries
falling under that Article, except in those cases where
companies are able to demonstrate that they meet all
criteria set out in Article 9(5) of the basic Regulation.

if any,

(33) As far as the PRC is concerned, all exporting producers
who requested MET also claimed IT in the event that
they would not be granted MET.

that

they

cumulatively met

(34) On the basis of the information available, it was found
that all of the groups of companies concerned failed to
demonstrate
the
requirements for IT as set forth in Article 9(5) of the
it was established that
basic Regulation. Namely,
the
the criterion stipulated in
companies failed to meet
Article 9(5)(c) of the basic Regulation that the majority
of
since as
explained in recital 25, all the companies were found
to be ultimately majority State owned. Consequently,
their claims had to be rejected.

the shares belong to private persons,

all

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3. Normal Value

3.1. General methodology

(i) G l o b a l r e p r e s e n t a t i v e n e s s

(35) As far as the determination of normal value is concerned,
the Commission first established,
in accordance with
Article 2(2) of the basic Regulation, for each exporting
producer concerned in Kazakhstan and in Ukraine,
whether its domestic sales of the product concerned to
independent customers were representative, i.e. whether
the total volume of such sales represented at least 5 % of
its total export sales volume of the product concerned to
the Community.

(ii) C o m p a r i s o n o f p r o d u c t

t y p e s

(36)

The Commission subsequently identified those product
types
sold domestically by the exporting producers
having overall representative domestic sales, which were
identical or directly comparable with the types sold for
export to the Community.

(iii) P r o d u c t
t i v e n e s s

t y p e

s p e c i f i c

r e p r e s e n t a -

(39)

types where more than 80 % by
For those product
volume of sales on the domestic market were not
below unit costs and where the weighted average sales
price was equal to or higher than the weighted average
type, was
production cost, normal value, by product
calculated as the weighted average of all domestic sales
prices of the type in question.

(40) Where the volume of profitable sales of a product type
represented 80 % or less of the total sales volume of that
type, or where the weighted average price of that type
was below the cost of production, normal value was
based on the actual domestic price, calculated as a
weighted average of profitable sales of that type only,
provided that these sales represented 10 % or more of
the total sales volume of that type.

(41) Where the volume of profitable sales of any product type
represented less than 10 % of the total sales volume of
that type, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

(37)

For each product type sold by the exporting producers
on their domestic markets and found to be directly
comparable with the product type sold for export to
the Community,
it was established whether domestic
sales were sufficiently representative for the purposes of
Article 2(2) of the basic Regulation. Domestic sales of a
particular product
considered sufficiently
representative when the total volume of that product
type sold on the domestic market
to independent
customers during the IP represented at least 5 % of the
total
type
sales volume of
exported to the Community.

the comparable product

type were

(42) Wherever domestic prices of a particular product type
sold by an exporting producer could not be used in
order to establish normal value, another method had to
be applied. In accordance with Article 2(3) of the basic
a
Regulation,
constructed normal value, as follows.

the Commission

calculated

instead

(iv) O r d i n a r y c o u r s e o f

t r a d e t e s t

(38)

examined for

The Commission subsequently
each
exporting producer concerned in Kazakhstan and in
Ukraine whether the domestic sales of each product
type sold domestically in representative quantities could
be regarded as being sold in the ordinary course of trade
pursuant to Article 2(4) of the basic Regulation. This was
done by establishing for each exported product type the
proportion of profitable domestic sales to independent
customers during the IP.

(43) Normal value was constructed by adding to each
exporter's manufacturing costs of
the exported types,
for
adjusted where necessary, a reasonable amount
selling, general and administrative expenses (SG&A) and
a reasonable margin of profit.

(44)

In all cases SG&A and profit were established pursuant to
the methods set out in Article 2(6) of the basic Regu-
lation. To this end, the Commission examined whether
the SG&A incurred and the profit realised by each of the
exporting producers concerned on the domestic market
constituted reliable data.

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3.2. Analogue country

(45) According to Article 2(7)(a) of the basic Regulation, in
economies
in transition normal value for exporting
producers not granted MET has to be established on
the basis of the price or constructed value in a market
economy third country (analogue country) or the price
from such a third country to other countries, or where
those are not possible, on any other reasonable basis.

(46)

In the notice of initiation, it was envisaged to use Brazil
as an appropriate analogue country for the purpose of
establishing normal value for the PRC and Kazakhstan,
where necessary, and interested parties were invited to
comment on this. No interested parties objected to this
proposal.

silico-manganese

imports into the USA market

market since (i) the cooperating producer is the only
producer on the domestic market and (ii) the volume
of
is allegedly limited
due to the existence of anti-dumping measures in the
from main
USA on imports of
producing countries in the world. Secondly,
it claimed
that the fact that the cooperating USA producer is a
related company to one of the complainant producers
casts doubts on the reliability and representativity of its
cost and price information. Thirdly, it was claimed that
account should be taken of the fact that access to raw
materials is allegedly different in the USA, were there are
no domestic
the main raw material,
manganese ore, and the PRC, where domestic supplies
are available. Fourthly, it was claimed that a country with
a level of economic development more similar to that of
the PRC would constitute a more appropriate analogue
country than the USA.

supplies of

(47)

and

subsequently

in Brazil
in other potential analogue countries,

cooperation from known
The Commission sought
also from
producers
producers
i.e.
India, Japan, Norway, South Africa and the USA. Offers
of cooperation were, however, obtained only from
producers in Norway and in the USA. On the basis of
information obtained from three Norwegian companies,
it was concluded that the domestic market of SiMn in
Norway was very small. Therefore, the Norwegian market
was not deemed sufficiently representative for the deter-
mination of normal value for the PRC and Kazakhstan.

(48) As for the sole known USA producer, a questionnaire
was sent to that producer and the data submitted in its
reply were verified on the spot. The domestic sales
volume of the producer in question in the USA was
found to be significant and sufficiently representative in
comparison to the volume of Chinese and Kazakh
exports of the product concerned to the Community.
Moreover, the USA market can be considered an open
market, given that the import duty level
is low (MFN
duty of 3,9 % of fob price). The investigation showed
imports of SiMn into the
that
USA market. Therefore, the USA market was deemed a
competitive market and sufficiently representative for the
determination of normal value
the PRC and
Kazakhstan.

there were substantial

for

(49)

Interested parties were invited to comment on this and
comments were received from three interested parties
objecting to the choice of
the USA as an analogue
country. One Chinese exporting producer group argued
firstly that there is insufficient competition on the USA

(50)

The Chinese exporting producer claimed that India or,
secondarily, Ukraine, would be more appropriate choices
for analogue country, mainly because competition and
market conditions in these countries would be more
comparable with the situation in the PRC. As a third
option, it was proposed that normal value for the PRC
be established on the basis of the data submitted by
those Chinese producers that qualify for MET. Ultimately,
should the USA be retained as an analogue country, it
was claimed that adjustments to the normal value should
be made to account for differences in the access to raw
materials and differences in production costs due to
higher labour and environmental costs in the USA.

(51)

The comments made by two other interested parties did
not add in substance to the above mentioned comments
made by the Chinese exporting producer.

(52) With respect to India, the Commission had sought coop-
eration from several Indian producers, but despite initial
positive indications, no cooperation was finally obtained.
Consequently, India could not be retained as an analogue
country. As for Ukraine, high levels of dumping were
found in the investigation for that country (see recital
87). In line with consistent practice, a country engaged
in such dumping is not considered an appropriate
analogue country. As for
to
establish the normal value for the PRC on the basis of
the data submitted by Chinese producers qualifying for
MET, it suffices to note that Article 2(7)(a) of the basic
Regulation specifically sets out that a ‘market economy
third country’ shall be used and in addition none of the
cooperating Chinese producers was found to qualify for
MET.

the third proposal,

i.e.

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Official Journal of the European Union

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(53)

(54)

(55)

substantial

there were

In addition, as regards the specific objections made to the
appropriateness of the USA as an analogue country, the
following should be noted: firstly, as regards the alleged
lack of competition on the local market, as already
mentioned in recital 48, the investigation showed that,
albeit the cooperating USA producer is the sole local
producer,
silico-
manganese to the USA. Indeed, the imports during the
IP were manifold in comparison to the domestic sales
In this
volume of
the cooperating USA producer.
connection,
it is also noted that the existence of trade
defence measures in force for the product in question
does not preclude the choice of a particular country as
an analogue country, as the purpose of anti-dumping
measures is precisely to restore fair competition on the
market in question.

imports of

and

company
the

a
reliability of

Regarding the allegation that the relationship between
European
the USA cooperating
could affect
producer
the data
provided,
these allegations did not coincide with the
findings of the investigation. No indication was found
the relationship would have had any distorting
that
impact on the prices, costs of production and profit-
ability
the
Commission satisfied itself on the accuracy and reliability
of the information provided for the purposes of this
investigation.

the United

producer,

States

and

of

Finally, the arguments concerning access to raw materials
and the difference in costs were also considered. The
price of the main raw material (manganese ore) used in
the production of silico-manganese by the cooperating
USA company was compared to the prices paid by the
Chinese companies for manganese ore and no significant
differences were found. In addition, it is noted that the
Chinese cooperating producers also imported part of
their manganese ore requirements. The argument, as
well as the claim for adjustment, was therefore rejected.

(56) As regards other factors invoked, such as the level of
economic development or the labour and environmental
costs, the interested party failed to substantiate its claim
sufficiently, and these factors were not deemed relevant
for determining whether
the USA is an appropriate
analogue country nor to warrant an adjustment to the
normal value. It is also noted that as costs and prices are
in general not considered as a viable basis for deter-
mining normal value in countries falling under Article

2(7) of the basic Regulation, such comparison in fact
defeats the purpose of resorting to the methods set out
in Article 2(7)(a) of the basic Regulation.

(57)

(58)

(59)

(60)

the USA
In view of
constitutes
in
accordance with Article 2(7)(a) of the basic Regulation.

is concluded that
analogue

the above,
an

appropriate

country

it

3.3. People's Republic of China

Following the choice of the USA as an analogue country
and pursuant to Article 2(7)(a) of the basic Regulation,
normal value for Chinese exporting producers, none of
whom has been granted MET, was established on the
basis of verified information received from the sole coop-
erating USA producer.

The general methodology described in recitals 35 to 44
has been applied to the cooperating producer in the
analogue country. Given that domestic sales of SiMn by
the cooperating USA producer did not occur in the
ordinary course of trade during the IP, normal value
to Article 2(3) of the
has been constructed pursuant
basic Regulation. The profit margin used to construct
normal value has been determined pursuant to Article
2(6)(b) of
the
profit margin applicable to the same general category
of products for the USA producer. Sales, general and
administrative costs incurred by the cooperating USA
producer on all domestic sales during the IP have been
used.

the basic Regulation on the basis of

3.4. Kazakhstan

The general methodology described in recitals 35 to 44
has been applied to the sole exporting producer in
Kazakhstan, which was granted MET. In view of limited
domestic sales, normal value had to be constructed
pursuant to Article 2(3) of the basic Regulation. In this
respect, it was found that the domestic sales of the like
product by Kazchrome were not representative and that
this producer's domestic sales of
the same general
category of products were not in the ordinary course
of
the amounts for SG&A and for
profit used to construct normal value were initially
based, pursuant to Article 2(6) of the basic Regulation,

trade. Therefore,

5.12.2007

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Official Journal of the European Union

L 317/13

thus

It was

country

analogue

found for

circumstances.

the like product. Subsequent

on the weighted average of these amounts attained by
the cooperating Ukrainian producers on their domestic
sales of
to definitive
disclosure, the exporting producer argued that the meth-
odology used to determine the SG&A and profit was not
appropriate in view of the fact that significant dumping
was
the cooperating Ukrainian exporting
producers. Alternatively, the Kazakh exporting producer
claimed that the amounts for SG&A and profit estab-
should be used.
lished in the
it was indeed considered
Following these comments,
from the Ukrainian
not appropriate to use profits
producers
re-
in these
examined pursuant to Article 2(6) of the basic Regulation
on which basis the amounts for SG&A and profit could
be established. In this regard, it was assessed whether any
of the company's SG&A and profit data relating to SiMn
could be used to establish the relevant amount. As the
company is deemed to operate under market conditions
and in order to reflect as precise as possible the domestic
market situation of the Kazakh company, it was decided
that the weighted average SG&A and profit obtained on
its domestic sales of SiMn to unrelated and related
customers should be used under the chapeau of Article
2(6) of the basic Regulation. In this respect, it should be
noted that the SG&A and profit realised on its domestic
sales to unrelated and related customers were at almost
identical levels, thus indicating that neither the SG&A nor
to domestic related
the profit
customers are affected by the relationship. Moreover,
the domestic sales were found to be made in the
ordinary course of trade and at a reasonably significant
level (2,8 % of the volume of exports to the Community
of SiMn). Given that chapeau of Article 2(6) of the basic
Regulation prioritises the use of a company's own SG&A
and profit realised on the domestic sales in the ordinary
course of trade, the claim to resort to data obtained from
the producer in the analogue country was thus rejected.

realised in the sales

(63) Where export sales to the Community were made either
directly to independent customers in the Community or
through unrelated trading companies located outside the
Community, export prices were established on the basis
of the prices actually paid or payable for the product
concerned in accordance with Article 2(8) of the basic
Regulation.

(64) Where export

sales

to the Community were made
through related trading companies located in a third
country, export prices were established on the basis of
the first resale prices of these related traders to inde-
pendent customers in the Community.

4.1. People's Republic of China

(65)

the

cooperating Chinese

Since none of
producers were granted MET/IT,
export
dumping margins but only in the calculation of
countrywide duty, as elaborated in recital 79 below.

exporting
the data on their
sales was not used to establish individual
the

3.5. Ukraine

(61)

The general methodology described in recitals 35 to 44
above has been applied to all three exporting producers
in Ukraine. For most of the sales, normal value had to be
constructed in view of the absence of sufficient domestic
sales of comparable models. Pursuant to Article 2(6)(b) of
the basic Regulation, the amounts for selling, general and
administrative costs and for profits used to construct
normal value have been based on the companies' actual
data pertaining to the production and sales,
in the
ordinary course of trade, of the same general category
of products.

(66) All three cooperating exporting producer groups in the
PRC made all export sales to the Community directly to
independent customers in the Community. Export prices
were therefore established on the basis of
the prices
actually paid or payable.

4. Export price

(62)

The exporting producers made export
to the
Community either directly to independent customers or
through related or unrelated trading companies located
outside the Community.

sales

(67)

The sole cooperating exporting producer made exports of
the product concerned to the Community via a related
trading company located in a third country. The export
price of this company was therefore established on the
basis of the resale prices of this trader to the first inde-
pendent customer in the Community.

4.2. Kazakhstan

L 317/14

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Official Journal of the European Union

5.12.2007

4.3. Ukraine

(68)

Two exporting producers in Ukraine made exports to the
Community exclusively via unrelated trading companies
located in a third country outside the Community and
the third Ukrainian exporting producer made some of its
sales of the product concerned to the Community to an
independent trading company in Ukraine for export to
the Community.
the export price was
established on the basis of the prices actually paid or
payable for
the product when sold to the trading
company for export to the Community.

In both cases,

(69)

Some of the sales of the third exporting producer were
made via a chain of related companies and ultimately by
a related trader in a third country. In these cases, the
export price was established on the basis of this related
trading company's resale prices to independent customers
in the Community.

5. Comparison

(70)

The normal value and export prices were compared on
an ex-works basis and at the same level of trade. For the
purpose of ensuring a fair comparison between the
normal value and export prices, due allowance in the
form of adjustments was made for differences affecting
prices and price comparability in accordance with Article
2(10) of the basic Regulation.

(71) On this basis, for all investigated Kazakh and Ukrainian
exporting producers, allowances for differences in level of
trade, transport and insurance costs, handling,
loading
and ancillary costs, packing costs, credit costs and after
sales
(warranty/guarantee) were made where
applicable and justified.

costs

(72)

the
The SG&A used to construct normal value for
Kazakh exporting producer pursuant to the methodology
set out in recital 60 above, included costs for domestic
freight and insurance. Therefore, albeit no claim had been
made in this regard, an ex officio adjustments to the
normal value pursuant to Article 2(10)(e) was made to
reduce the SG&A by the amount of the costs incurred on
domestic freight and insurance.

(73)

The sole cooperating exporting producer in Kazakhstan,
together with its related
Kazchrome, submitted that,

(74)

(75)

(76)

trader located in Switzerland, ENRC, it formed what it
called a ‘single economic entity’. It claimed that therefore,
whilst the trader's sales price should be used for estab-
lishing the export price, no adjustments had to be made
for transport costs, SG&A expenses and trader profit.

The claim was duly investigated. It was found that ENRC
and Kazchrome, although related parties, were separate
legal entities. Furthermore, these two entities were acting
on the basis of a buyer-seller relationship. Consequently,
it was concluded that, in Kazchrome's sales flow to the
Community, ENRC had functions similar to those of an
agent working on a commission basis. In addition, it was
established that, whereas
sales of
Kazchrome were done via ENRC, this trader was not a
party in the domestic sales channel of Kazchrome.
Furthermore,
it was concluded that the adjustment of
the export price should also cover transport costs from
the plant onwards, taking into account different terms of
in order to ensure a fair comparison between
sales,
export price and normal value at ex-works level.

all Community

Therefore, the claim had to be dismissed and adjustments
to the export price for a commission in accordance with
Article 2(10)(i) of the basic Regulation and for transport
in accordance with Article 2(10)(e) of the basic Regu-
lation were made. The level of
the commission was
calculated based on direct evidence pointing to the
existence of such functions. In this context, in the calcu-
lation of the commission, the SG&A expenses incurred
by ENRC to sell the product concerned produced by
Kazchrome were taken into account, as well as a profit
margin for ENRC, based, in this case, on that reported by
an unrelated importer cooperating in the investigation.

For the Ukrainian producer ultimately selling via a related
trader in a third country (see recital 69), an adjustment to
the
export price for a commission was made in
accordance with Article 2(10)(i) of the basic Regulation,
in the cases where sales were made through this related
trader, as this trader had functions similar to those of an
agent working on a commission basis. The company
concerned, NFP, and the related trader
in question,
Steelex SA, were found to be separate legal entities
and, directly or indirectly, to work on the basis of a
buyer-seller relationship. Moreover, for export sales to
the Community via Steelex SA a commission was paid.
The
the
Community institutions was based on direct evidence
pointing to the existence of such functions.
In this
context, the SG&A expenses incurred by Steelex SA to
sell the product concerned produced by NFP were taken
into account, as well as a profit margin reported by an
unrelated importer cooperating in the investigation.

commission calculated by

level of

the

5.12.2007

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Official Journal of the European Union

L 317/15

its

sales

to the
Furthermore, NFP made part of
Community by Steelex SA through an unrelated trader
in
located in another third country. For these sales,
it was
addition to the commission for Steelex SA,
a
for
an adjustment
found reasonable
commission for the unrelated trader in accordance with
Article 2(10)(i) of the basic Regulation as this trader also
had functions similar to those of an agent working on a
commission basis. This commission was established on
its calculated mark-up on the sales in
the basis of
question.

to make

currency

producer

exporting

claimed
conversions, pursuant

an
(77) One Ukrainian
adjustment
to
for
Article 2(10)(j) of the basic Regulation. This claim was
based on the fluctuation between the exchange rate on
the date of invoice and the exchange rate on the date of
payment. In this respect, it is important to underline that
the date of invoice is, in accordance with Article 2(10)(j)
of the basic Regulation, considered to be the date of sale
and the exchange rate to be applied should, thus, be the
exchange rate prevailing at the date of sale. Therefore,
this claim had to be rejected.

(78)

(79)

(80)

6. Dumping margins

6.1. People's Republic of China

In the absence of MET or IT being granted to any of the
cooperating Chinese exporting producers, a countrywide
dumping margin was calculated for the whole of the PRC
using a weighting factor for the cif value of each group
of exporters, i.e. cooperators and non-cooperators.

the

cooperating Chinese

To this end, the dumping margin was firstly calculated
for
producers
pursuant to Article 2(11) and (12) of the basic Regu-
lation, on the basis of a comparison of a weighted
the analogue country by
average normal value of
product type with a weighted average export price by
product type as established above.

exporting

low-carbon SiMn. However,

It should be noted that
the imports from the PRC
consisted both of SiMn with normal carbon content
cooperating
and
producer in the analogue country produced only the
normal carbon content SiMn. Therefore, only data
concerning this common product type was used in the
comparison.

the

(82)

(83)

(84)

(85)

the facts available,
the basic Regulation.

in accordance with Article 18(1) of

first established. To this end,

In order to determine the dumping margin for non-
the level of non-
cooperating exporting producers,
cooperation was
the
volume of exports to the Community reported by the
cooperating Chinese exporting producers was compared
with the total volume of imports originating in the PRC,
as based on Eurostat import statistics. This comparison
indicated that the level of cooperation was low, since the
exports by the cooperating producers represented less
than 29 % of total Community imports from the PRC
during the IP.

for

Therefore, the level of dumping for the export volumes
of non-cooperating Chinese exporting producers was
the highest dumping
determined on the basis of
margin established
exporting
cooperating
the
producers for the normal carbon content SiMn. This
approach was deemed appropriate since there were no
that any non-cooperating producer was
indications
cooperating
level
dumping
exporting producers. Therefore, a countrywide average
dumping margin was calculated using as a weighting
factor the cif value of each group of exporters, i.e. coop-
erating exporters and non-cooperating exporters. On this
basis, the countrywide dumping margin, expressed as a
percentage of the cif import price at the Community
frontier, duty unpaid, is 60,1 %.

than the

lower

at

a

6.2. Kazakhstan

Based on the complaint, the information available from
the exporting producer which came forward and other
statistical data it appeared that OJSC Kazchrome is the
sole Kazakh exporting producer of silico-manganese. As
no indications were found that any exporting producer
deliberately abstained from cooperating it was considered
appropriate to set the residual dumping margin at the
same level as the level established for OJSC Kazchrome.

The dumping margins
a
percentage of the cif import price at the Community
frontier, duty unpaid, are therefore the following:

expressed as

established,

— OJSC Kazchrome: 6,5 %,

(81)

Secondly, the dumping margin was established for all
non-cooperating exporting producers on the basis of

— All other companies: 6,5 %.

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Official Journal of the European Union

5.12.2007

6.3. Ukraine

(86)

Based on the complaint, the information available from
the exporting producers which came forward and other
statistical data, it was concluded that the level of coop-
eration was above 80 % in the case of Ukraine. Therefore,
it was considered appropriate to set the residual dumping
margin at the level of the highest dumping margin estab-
lished for a cooperating exporting producer
in the
country concerned.

(87) On this basis,

the dumping margins, expressed as a
percentage of the cif import price at the Community
frontier, duty unpaid, are the following:

— PJSC Nikopol Ferroalloys Plant: 39,1 %,

— JSC Stakhanov Ferroalloys Plant: 53,4 %,

— OJSC Zaporozhye Ferroalloys Plant: 56,7 %,

— All other companies: 56,7 %.

D. INJURY

1. General

(88)

In 1998, anti-dumping measures were imposed on
imports of SiMn originating in the PRC and in Ukraine
(Regulation (EC) No 495/98 (1)). Those measures expired
in early March 2003. Therefore, during the early part of
the period considered there were measures in place on
imports from two of the countries concerned. This fact
was taken into consideration when conducting the injury
analysis. As indicated in recital 118 below, the evolution
in respect of profitability clearly indicates
the
removal of the anti-dumping measures in March 2003
did not
the
Community industry during the following period. It is
therefore concluded that, contrary to the claim by
some interested parties, the year 2002 can be considered
as the basis for the calculation of the indices mentioned
in recitals 93 to 141.

influence significantly the situation of

that

(89)

SiMn is a key raw material used for the production of
steel. There was a significant increase in demand for steel
worldwide, but primarily in Asia, which began towards
the end of 2003 and continued during the first half of

2004. This, combined with production shortages of SiMn
in Asia resulted in increased worldwide demand for
SiMn, and led to an unprecedented increase in price
during 2004.
injury analysis,
account has been taken of these unusual circumstances,
in order to ensure that they do not unduly affect the
injury picture.

In carrying out

the

2. Community production and Community industry

(90) Within the Community, the like product is manufactured
by five producers. The output of these five Community
producers
the
Community production within the meaning of Article
4(1) of the basic Regulation.

to constitute

therefore

deemed

is

(91) Of these five producers, a total of four, being members
of the complaining association, declared their interest in
cooperating in the proceeding within the time limit set
out in the notice of initiation and properly cooperated
with the investigation. These four producers were found
to account for a major proportion, in this case around
88 %, of the total Community production of the like
product. The
therefore
constitute the Community industry within the meaning
of Article 4(1) and Article 5(4) of the basic Regulation
and will be hereafter referred to as the ‘Community
industry’. The remaining Community producer will be
‘other Community
hereafter
as
producer’. This other Community producer did not
oppose the complaint.

cooperating producers

referred

four

the

to

(92)

(93)

3. Community consumption

of

volumes

Community consumption was established on the basis of
own
the Community
the
production taking into account changes in stock levels,
the import and export volumes data for the Community
market obtained from Eurostat and, concerning the other
from estimations made by the
Community producer,
Community industry producers.

industry's

for

the Community market

In the IP,
the product
concerned and the like product was approximately 9 %
higher than in 2002, i.e. around 914 000 tonnes. During
the period considered consumption increased to a peak
in 2004, when it was 14 % higher than in2002, but fell
in the following two years.

Total EC consumption (tonnes)

835 419

882 607

953 692

921 654

914 240

Index (2002=100)

100

106

114

110

109

2002

2003

2004

2005

IP

(1) OJ L 62, 3.3.1998, p. 1. Regulation as amended by Regulation

(EC) No 154/2003 (OJ L 25, 30.1.2003, p. 25).

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Official Journal of the European Union

L 317/17

(94)

(95)

(96)

4. Imports from the countries concerned

(a) Cumulative assessment of

the

effects of

the

imports

concerned

The Commission considered whether imports from the
countries concerned should be assessed cumulatively on
the basis of the criteria set out in Article 3(4) of the basic
Regulation.

The dumping margin found for each of the countries
concerned was more than de minimis,
the volume of
imports from each of these countries was not negligible
and the cumulative assessment could be considered
appropriate in view of the conditions of competition
between the imports from the countries concerned and
the like Community product. These similar conditions of
competition were evidenced by the fact that the product
concerned imported from the countries concerned and
the like product produced and sold by the Community
industry within the Community market were alike and
distributed via the same trade channels. Moreover, all
substantial
and resulted in
import
significant market
the
in view of
shares. However,
absence of undercutting by imports from Ukraine as
stated at recital 104, it is considered that the effect of
imports from Ukraine should be assessed separately.

volumes were

The exporting producer in Kazakhstan maintained that
Kazakhstan should not be cumulated with the PRC for
the purpose of
its
diametrically different market behaviour. This exporting
producer argued inter alia that the evolution of Kazakh
import volumes, values and market
the
from the other countries
Community was different

the injury assessment, because of

share

for

In respect of this,

concerned and that there was a difference in product
mix.
it is acknowledged that there
was during the period considered an overall decrease in
the volume of imports and in market share in respect of
Kazakhstan (the latter was 5,8 % in 2002 and 4,6 %
during the IP). However, both the volume and market
share of Kazakh imports during the period considered
were relatively stable and were at levels which cannot
be considered as insignificant. In addition, the investi-
for
gation has
Kazakh imports is not significantly different from that
for
concerned.
Therefore, also in light of the considerations in recitals
73 to 75 it cannot be concluded that there is a dia-
metrically different market behaviour between imports
from the PRC and Kazakhstan and consequently the
claim should be rejected.

the evolution of prices

from the other

shown that

countries

imports

(97)

(98)

In the light of the above, it was considered that all the
criteria set out in Article 3(4) of the basic Regulation
were met in respect of the PRC and Kazakhstan. The
from those two countries concerned were
imports
therefore examined cumulatively, while imports from
Ukraine were assessed separately.

(b) Volume

The volume of imports of the product concerned from
the PRC and Kazakhstan into the Community increased
steadily from around 48 000 tonnes during 2002 to
around 162 000 tonnes during 2004, before decreasing
to around 96 000 tonnes during the IP. Between 2002
and the IP, the volume of imports from these countries
increased by 99 %.

Volume of imports from the PRC and
Kazakhstan (tonnes)

Index (2002=100)

Market share of imports from the PRC and
Kazakhstan

Price of imports from the PRC and
Kazakhstan (EUR/tonne)

Index (2002=100)

2002

2003

2004

2005

IP

48 091

66 509

162 227

142 993

95 491

100

5,8 %

462

100

138

7,5 %

464

101

337

297

199

17,0 %

15,5 %

10,4 %

829

179

689

149

564

122

(99)

The volume of imports of the product concerned from
Ukraine into the Community decreased slightly from
around 154 000 tonnes during 2002 to around
138 000 tonnes during 2003 and 2004, before

increasing to around 180 000 tonnes during 2005 and
to around 210 000 tonnes during the IP. Between 2002
and the IP, the volume of imports from these countries
increased by 36 %.

L 317/18

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Official Journal of the European Union

5.12.2007

2002

2003

2004

2005

IP

Volume of imports from Ukraine (tonnes)

154 391

137 683

137 514

179 993

210 302

Index (2002=100)

100

89

89

117

136

Market share of imports from Ukraine

18,5 %

15,6 %

14,4 %

19,5 %

23,0 %

Price of imports from Ukraine (EUR/tonne)

Index (2002=100)

508

100

490

97

912

180

602

118

550

108

(c) Market share

(100) The market share held by imports from the PRC and
Kazakhstan stood at 5,8 % during 2002. This increased
in 2003 and again in 2004, reaching 17,0 % in that year.
During 2005 the market share decreased slightly to
15,5 % and decreased again during the IP to 10,4 %.
Overall, between 2002 and the IP,
the market share
increased by 4,6 percentage points to almost double
the market share in 2002.

(101) The market share held by imports from Ukraine stood at
18,5 % during 2002. This decreased in 2003 and again
in 2004, reaching 14,4 % in that year. During 2005 the
market share increased to 19,5 % and increased again
during the IP to 23,0 %. Overall, between 2002 and
the IP, the market share increased by 4,5 percentage
points.

(d) Prices

(i) P r i c e e v o l u t i o n

(102) During 2004, prices for the SiMn increased worldwide to
exceptional
levels due to a situation of unusually high
demand and low supply, as explained in recital 89. This
is reflected in the prices of imports from the countries
concerned for that year and part of 2005. This, however,
did not affect prices during the IP. Overall, the average
price of imports of the product concerned originating in
the PRC and Kazakhstan increased by 22 % between
2002 and the IP, while the average price of imports of
the product concerned originating in Ukraine increased
by 8 % over the same period.

(ii) P r i c e u n d e r c u t t i n g

(103) A model-to-model price comparison was made between
the exporting producer and the Community industry's
average selling prices in the Community. To this end,
Community industry's prices
to unrelated customers
have been compared with the prices of cooperating
exporting
concerned.
Adjustments were applied where necessary to take

producers

countries

the

of

account of differences in the level of trade and in the
quality of products.

(104) The comparison showed that during the IP, SiMn orig-
inating in the PRC and Kazakhstan sold in the
Community each undercut
the Community industry's
prices by 4,5 %, and consequently by 4,5 % overall on
a weighted average basis. Prices of imports from Ukraine
were at comparable levels to those of the Community
industry (i.e. no undercutting).

clearance

and customs

(105) With a view to ensure that in the undercutting calcu-
lation prices are compared at the same level of trade, ex-
works prices of the Community industry were compared
with prices of the imported goods as they enter the
physical territory of the Community, duly adjusted for
the unloading
costs. One
interested party contested the methodology used with
regard to the Kazakh company, claiming that the basis
for calculation of the price of imports should be the cif
price at the point of customs clearance at the EU ports,
and not the price of the imported goods as they enter the
physical territory of the Community (in this case the land
in Lithuania). No convincing argument was
border
presented that would support
the need to apply a
different method of calculation for this company. On
the contrary,
it should be noted that the cif prices at
the point of customs clearance of the Kazakh imports
include a significant amount of transportation costs after
in
the goods have passed the Community border
Lithuania
ex-works
and comparing them with the
prices of the Community industry would be discrimi-
natory for the latter, as the ex-work prices do not
transportation cost. Therefore,
include
is
concluded that
the methodology applied is the most
appropriate and consequently the claim is rejected.

any

it

5. Situation of the Community industry

(106) Pursuant

to Article 3(5) of

Commission examined all
and indices having a bearing on the state of
Community industry.

the basic Regulation,
the
relevant economic factors
the

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L 317/19

(a) Production

(107) From a level of around 241 000 tonnes in 2002, the Community industry's production increased to
a peak during 2004 of around 255 000 tonnes, due to exceptional demand as explained in recital
89, before decreasing in 2005 and increasing slightly in the IP. Overall, production decreased over
the period considered by 6 % to around 226 000 tonnes during the IP. It should be noted that one
Community producer stopped production of SiMn during 2003 and for much of the IP.

2002

2003

2004

2005

IP

Production (tonnes)

241 784

220 073

255 671

221 402

226 142

Index (2002=100)

100

91

106

92

94

(b) Capacity and capacity utilisation rates

(108) The production capacity of the Community industry remained stable, at a level of around 325 000

tonnes, throughout the period considered.

2002

2003

2004

2005

IP

Production capacity (tonnes)

325 226

325 537

325 254

326 068

326 696

Index (2002=100)

Capacity utilisation

Index (2002=100)

100

74 %

100

100

68 %

91

100

79 %

106

100

68 %

91

100

69 %

93

(109) Capacity utilisation was 74 % in 2002. It declined to 68 % in 2003, increased again to 79 % in 2004,
before declining to 69 % in the IP. This reflects the variations in production volumes as described in
recital 107.

(c) Stocks

(110) The level of closing stocks of the Community industry decreased by 45 % in 2003, but returned in
2004 to almost the same level as in 2002. The steep decrease in stocks at the end of 2003 was due
to the reaction to the exceptional increase in demand referred to in recital 89. Closing stocks then
increased in 2005 by 22 % before decreasing significantly in the IP to a level 30 % below 2002 levels.
This overall decrease in closing stocks accounts for the fact that the Community industry's EC sales
volume remained stable overall (see recital 111), despite the decrease in production as described in
recital 107.

2002

2003

2004

2005

IP

Closing stock (tonnes)

21 017

11 561

20 983

25 682

14 618

Index (2002=100)

100

55

100

122

70

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(d) Sales volume

(111) The sales volume by the Community industry of its own production to unrelated customers on the
Community market during the IP was around 227 000 tonnes, the same as in 2002. However, the
2003 and 2005 sales volumes were 6 % and 8 % lower, respectively. In 2004, sales volume was
higher at 104 % of the 2002 and IP level for the reasons already explained in recital 89.

EC Sales volume to customers
(tonnes)

2002

2003

2004

2005

IP

227 571

213 778

236 494

208 687

227 690

Index (2002=100)

100

94

104

92

100

(e) Market share

(112) The market share held by the Community industry decreased from 27,2 % in 2002 to 24,2 % in
2003, before recovering to 24,8 % in 2004. In 2005, market share decreased again to 22,6 %. During
the IP, it recovered somewhat to 24,9 %. Over the period considered, the Community industry lost
2,3 percentage points of market share.

Market share of the Community
industry

2002

2003

2004

2005

IP

27,2 %

24,2 %

24,8 %

22,6 %

24,9 %

Index (2002=100)

100

89

91

83

91

(f) Growth

(113) Between 2002 and the IP, when the Community consumption increased by 9 percentage points, the
volume of sales by the Community industry on the Community market did not increase and the
Community industry's market share decreased by 2,3 percentage points. On the other hand, the sales
It is thus
volume and market share of the PRC and Ukraine increased over the same period.
concluded that the Community industry could not benefit from any growth on the Community
market.

(g) Employment

(114) The employment level of the Community industry first decreased by 32 % between 2002 and 2003,
increased by 27 percentage points in 2004, before decreasing by 13 percentage points in 2005 and a
further 26 percentage points in the IP. During the period considered, production volume remained
relatively stable, varying between 91 % and 106 % of the 2002 level. However, for one producer who
stopped production of SiMn in the IP, as referred to in recital 107, the variation in production
volumes during the period considered was more pronounced and the variation in employment
reflects this. Overall, employment of the Community industry declined by 44 % between 2002
the
and the IP,
Community industry improved efficiency since, at
the same time, production volumes only
decreased by 6 %.

to around 400 persons. This

from around 700 persons

shows

that

i.e.

Employment (persons)

Index (2002=100)

2002

702

100

2003

475

68

2004

668

95

2005

577

82

IP

391

56

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(h) Productivity

(115) Productivity of

the Community industry's workforce, measured as output

(tonnes) per person
employed per year, starting from a level of 344 tonnes per employee,
increased over the period
considered, apart from 2004, and finished during the IP at a level 68 % up on 2002. This reflects the
fact that employment fell by 44 % over the period considered while production only decreased by
6 %. The increase in productivity is partly due to the fact that job reductions were higher for those
Community producers where productivity was initially relatively low.

Productivity (tonne per employee)

Index (2002=100)

2002

344

100

2003

463

135

2004

383

111

2005

384

111

IP

578

168

(i) Wages

(116) The average wage per employee increased by 26 % between 2002 and 2003, remained at a similar
level during 2004 before increasing again in 2005 and the IP to finish 77 % higher than in 2002.
The increase in average wage costs is partly due to the fact that job reductions were higher for those
Community producers where average wages were initially relatively low.

Annual labour cost per employee
(EUR)

2002

2003

2004

2005

IP

17 602

22 102

21 636

22 459

31 092

Index (2002=100)

100

126

123

128

177

(j) Factors affecting sales prices

(117) Unit prices for Community industry's sales to unrelated customers increased overall by 14 % between
2002 and the IP. In 2004 prices were exceptionally high due to the worldwide situation of unusually
high demand and low supply referred to in recital 89. The effect of this situation carried over partly
into 2005 when prices returned to more normal levels, but finished during the IP 14 % higher than
in 2002.

Unit price EC market (EUR/tonne)

Index (2002=100)

2002

521

100

2003

526

101

2004

928

178

2005

640

123

IP

593

114

(k) Profitability and return on investments

(118) During the period considered, the profitability of the Community industry's sales of the like product,
expressed as a percentage of net sales, increased from 0,8 % in 2002 to 3,1 % in 2003, increased
exceptionally to 37,2 % in 2004 due to the situation described at recital 89, returned to 7,0 % in
2005 and to 2,5 % in the IP. Profitability therefore increased by 1,7 percentage points between 2002
and the IP.

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Profitability of EC sales to unrelated
(% of net sales)

ROI (profit in % of net book value
of investments)

2002

0,8 %

100

3,6 %

2003

3,1 %

2004

37,2 %

2005

7,0 %

IP

2,5 %

385

4 668

884

313

11,0 %

410,2 %

24,4 %

10,4 %

100

303

11 252

668

284

(119) The return on investments (ROI), expressed as the profit in percent of the net book value of
investments, broadly followed the profitability trend. It increased from a level of 3,6 % in 2002 to
11 % in 2003, increased exceptionally to 410 % in 2004, returned to 24 % in 2005, before reaching
finally a level of 10,4 % in the IP,
thus increasing by 6,8 percentage points over the period
considered.

(l) Cash flow and ability to raise capital

(120) The net cash flow from operating activities was almost zero in 2002.

It increased to around
EUR 9 million in 2003, to 83 million EUR in 2004, before returning to around EUR 16 million
in 2005 and EUR 17 million in the IP. There were no indications that the Community industry
encountered difficulties in raising capital.

2002

132

100

2003

9 551

7 214

2004

2005

IP

83 701

16 445

17 092

63 220

12 421

12 910

Cash flow (EUR)

Index (2002=100)

(m) Investments

(121) The Community industry's annual

investments in the production of the like product increased
fivefold between 2002 and 2003 before returning in 2004 to around 2002 levels. Investments
increased again by around eightfold between 2004 and 2005 before declining slightly in the IP.
Overall,
investments increased by around 900 % between 2002 and the IP. The Community
industry's investments can be attributed mainly to one Community producer and it was established
that they were for the maintenance and renewal of existing equipment, and not for capacity increase
purposes.

Net investments (1 000 EUR)

Index (2002=100)

2002

1 528

100

2003

8 376

548

2004

2 351

154

2005

IP

17 365

15 333

1 136

1 003

(n) Magnitude of dumping margin

(122) Given the volume, the market share and the prices of the imports from the countries concerned, the
impact on the Community industry of the magnitude of the actual margins of dumping cannot be
considered to be negligible.

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(o) Recovery from past dumping

E. CAUSATION

(123) As indicated in recital 88, the evolution in respect of
profitability clearly indicates that
the
anti-dumping measures on SiMn in March 2003 did
the
of
not
Community industry during the following period.

the removal of

significantly

influence

situation

the

(124)

6. Conclusion on injury

In a context of growing consumption, the Community
industry's market share declined by 2,3 percentage points
to 24,9 % during the period considered. At the same
time, production decreased by 6 % and the capacity utili-
sation also decreased by 5 percentage points. Moreover,
the Community industry had to release a number of
employees. On the other hand, some injury indicators
indicate a positive trend during the period considered,
such as profitability, cash flow, return on investments
and sales price which increased by 14 %. A more
thorough analysis of that data nevertheless shows that,
given the nature of the business, a profit margin of 2,5 %
is not considered as sufficient as it cannot guarantee the
continuation of the industry in the long term. As regards
the price increase, it was enough to cover the increase in
raw material prices, but not to raise the profit margin to
a sustainable level. Therefore, while a number of indi-
the Community industry
cators show positive trends,
could not benefit at all
increase in
consumption on the Community market, as evidenced
by its loss of market share, drop in production and by
its poor profitability.

from the overall

the

product

throughout

continuously

(125) As one Community producer did not manufacture the
period
like
considered, stopping production altogether during 2003
and for most of the IP, as referred to in recital 107, the
impact of this intermittence was further examined. The
analysis has shown, however, that due to the relatively
this producer its intermittent
small overall output of
production pattern had only limited impact on the
overall injury picture and did not inflate the injury indi-
cators to a significant extent. This is evidenced by the
fact that excluding this producer from the analysis would
In
result
particular, the profitability of the Community industry
would still be far from satisfactory at 3,2 % in the IP,
while production and capacity utilisation would still be
showing negative trends. Thus, it is concluded that the
injury suffered by the Community industry cannot be
attributed solely to this Community producer.

in only slightly better performance figures.

(126)

In the light of the foregoing,
it is concluded that the
Community industry has suffered material injury within
the meaning of Article 3(5) of the basic Regulation.

1. Introduction

(127)

In accordance with Article 3(6) and (7) of
the basic
Regulation, the Commission examined whether dumped
imports have caused injury to the Community industry
to a degree that enables it to be classified as material.
Known factors other than the dumped imports, which
the same time be injuring the Community
could at
industry, were also examined to ensure that possible
injury caused by these other factors was not attributed
to the dumped imports.

2. Effect of the dumped imports

(128) Between 2002 and the IP, the volume of the dumped
imports of the product concerned originating in the PRC
and Kazakhstan increased by 99 % and their share of the
Community market increased by around 4,6 percentage
points. The average price of these imports increased by
22 % between 2002 and the IP, but prices were generally
lower than those of the Community industry during the
period considered. Over the same period, the volume of
the dumped imports of
the product concerned origi-
nating in Ukraine increased by 36 % and their share of
the Community market
around 4,5
percentage points. The average price of these imports
increased by 8 % between 2002 and the IP, but prices
were generally at levels close to those of the Community
industry during the period considered.

increased by

(129) As indicated in recital 104 above, price undercutting of
imports from the PRC and Kazakhstan was 4,5 % overall
on a weighted average basis, while there was no under-
cutting by imports from Ukraine.

(130)

these dumped imports

In view of the undercutting of Community industry's
it is
prices by imports from the PRC and Kazakhstan,
considered that
exerted a
downward pressure on the prices, preventing the
Community industry from increasing its sales prices to
a level
that would have been necessary to realise a
sustainable profit. Therefore, there is a clear causal link
between those imports and the Community industry's
in view of the absence of
injury. On the other hand,
undercutting by imports from the Ukraine and the fact
that the injury margin for Ukraine is at a de minimis level
(see recitals 168 and 169), it is considered that there is
no clear causal link between imports from Ukraine and
the injury to the Community industry.

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3. Effect of other factors

(a) Export performance of the Community industry

(131) As can be seen from the table below, the volume of export sales decreased by 40 % during the period
considered. The unit price of these sales remained relatively stable, with the exception of those during
2004.

2002

2003

2004

Export sales volume (tonnes)

12 056

16 445

10 524

Index (2002=100)

Export sales price (EUR/tonne)

Index (2002=100)

100

598

100

136

522

87

87

787

132

2005

9 713

81

592

99

IP

7 191

60

578

97

(132)

It should be noted, however, that the level of export sales is not significant in the context of the
Community industry's overall sales, representing only around 3 % to 7 % of total sales during the
period considered. It is therefore considered that the export activity cannot have contributed in any
way to the material injury suffered by the Community industry.

(b) Imports from third countries

(133) The analysis of imports from third countries is based on data from Eurostat. For a number of
countries it was possible to cross-check this data with verified information provided by interested
parties, which confirmed the reliability of Eurostat data.

(134) Overall imports from all countries, other than the countries concerned, decreased over the period
considered by around 6 %, i.e. from around 377 000 tonnes in 2002 to around 354 000 tonnes in
the IP. The corresponding market share declined from around 45 % to around 39 %. The main
sources of imports from third countries are Norway, India, South Africa and Brazil.

Volume from all other third
countries (tonnes)

2002

2003

2004

2005

IP

376 919

437 205

393 857

364 250

353 802

Index (2002=100)

100

116

104

97

94

Market share of all other third
countries

Price from all other third countries
(EUR/tonne)

Index (2002=100)

Source: Eurostat.

45,1 %

49,5 %

41,3 %

39,5 %

38,7 %

523

100

528

101

823

157

691

132

597

114

(135)

Imports from Norway decreased by around 11 %, and the market share of those imports decreased
by 4,9 percentage points (IP = 21,9 %), during the period considered. Overall, the average price of
imports from Norway was above that of the Community industry throughout the period considered.
While the price of low-carbon imports from Norway may undercut Community industry prices to
some extent, given that this quality of product only represents a small part (roughly 5 %) of the total
production of the Community industry, and in view of the absence of overall undercutting and the

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Official Journal of the European Union

L 317/25

decrease in both import volumes and market share, it was considered that imports from Norway did
not contribute to the material injury suffered by the Community industry.

Norway

2002

2003

2004

2005

IP

Volume of imports (tonnes)

224 253

213 838

178 639

200 310

200 272

Index (2002=100)

100

95

80

89

89

Market share of imports

26,8 %

24,2 %

18,7 %

21,7 %

21,9 %

Price of imports (EUR/tonne)

Index (2002=100)

Source: Eurostat.

574

100

604

105

956

167

765

133

656

114

(136)

Imports from India increased by over 300 %, and the market share of those imports increased by 7,3
percentage points (IP = 9,7 %), during the period considered. At the same time the average price of
imports from India was slightly higher than those of the Community industry (i.e. no undercutting).
In view of the absence of undercutting by imports from India, it is considered that there is no clear
evidence that imports from India contributed to the injury suffered by the Community industry.

India

2002

2003

2004

2005

IP

Volume of imports (tonnes)

19 954

33 497

31 593

48 123

89 017

Index (2002=100)

Market share of imports

Price of imports (EUR/tonne)

Index (2002=100)

Source: Eurostat.

100

2,4 %

479

100

168

3,8 %

449

94

158

3,3 %

804

168

241

5,2 %

591

123

446

9,7 %

521

109

(137)

Imports from South Africa decreased by around 38 %, and the market share of those imports
decreased by 2,5 percentage points (IP = 3,2 %) during the period considered. The average price
of imports from South Africa was below that of the Community industry and similar to that
practiced by the countries concerned. It is therefore considered that imports from South Africa
may have contributed to the injury suffered by the Community industry. However, given the
is
significant overall decrease in imports from South Africa and their small market share,
considered not sufficient to break the causal
injury suffered by the
link between the material
Community industry and dumped imports from the PRC and Kazakhstan.

it

South Africa

2002

2003

2004

2005

IP

Volume of imports from S Africa
(tonnes)

Index (2002=100)

Market share of imports from S
Africa

Price of imports from S Africa
(EUR/tonne)

Index (2002=100)

Source: Eurostat.

47 808

81 330

58 753

52 640

29 531

100

5,7 %

417

100

170

9,2 %

429

103

123

6,2 %

660

158

110

5,7 %

611

147

62

3,2 %

501

120

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Official Journal of the European Union

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(138)

Imports from other third countries, including Brazil, decreased by around 59 %, and the market share
of
those imports decreased by around 6,4 percentage points (IP = 3,8 %), during the period
considered. At the same time, the average price of imports from other third countries was higher
than that of the Community industry (i.e. no undercutting). In view of the absence of undercutting by
those imports and their decreasing trend, it is considered that they did not contribute to the material
injury suffered by the Community industry.

Other third countries (including Brazil)

2002

2003

2004

2005

IP

Volume of imports (tonnes)

84 904

108 539

124 872

63 178

34 982

Index (2002=100)

100

128

147

74

Market share of imports

10,2 %

12,3 %

13,1 %

6,9 %

Price of imports (EUR/tonne)

Index (2002=100)

Source: Eurostat.

460

100

476

104

713

155

598

130

41

3,8 %

528

115

(c) Competition from the other Community producer

(139) As indicated in recital 91 above, one Community producer did not cooperate with the investigation.
Based on information obtained in the course of the investigation from cooperating Community
producers,
it is estimated that its sales volume in the Community was around 30 000 tonnes
throughout the period considered. Similarly, the corresponding market share was stable throughout
the period considered at around 3 %. The other Community producer therefore did not gain any sales
volume and market share at the expense of the Community industry. No information was available
concerning the prices of this Community producer.

EC Sales volume of the other
Community producers (tonnes)

Index (2002=100)

Market share of the other
Community producers

2002

2003

2004

2005

IP

30 000

30 000

30 000

30 000

30 000

100

3,6 %

100

3,4 %

100

3,1 %

100

3,3 %

100

3,3 %

Index (2002=100)

100

95

88

91

91

Source: Investigation, complaint.

(140) Given the above, and given the absence of information to the contrary, it is concluded that the other
Community producer has not contributed to the injury suffered by the Community industry.

(d) Cost of production (raw materials)

(141) The main elements in the total cost of production are raw materials (around 45 % to 55 %) and
electricity (around 20 % to 30 %). Direct labour accounts for around 5 % of costs. The cost of
production of the Community industry increased by 12 % between 2002 and the IP.

Unit cost of production (EUR/tonne)

Index (2002=100)

2002

517

100

2003

510

99

2004

583

113

2005

595

115

IP

578

112

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undercutting

imports which were

(142) Some interested parties claimed that the injury suffered
by the Community industry was attributable to the
increases in the cost of production. In respect of raw
material costs,
since these are generally commodity
products which, in principle, are traded on the interna-
tional market, it is considered that the price increase has
affected all producers of SiMn, which would normally be
forced to increase their sales prices across the board. The
injury was thus not caused by the general increase in raw
material prices as such but by the fact that, due to the
dumped
the
Community industry's prices, the Community industry
was unable to sell at a level that would have allowed it
to realise a sufficient profit margin. As for labour costs,
indicated in recital 115 above, data concerning
as
productivity
the Community
industry has managed to offset increases in costs with
increases in efficiency and productivity. Some parties
referred to electricity costs as the main reason why
Community industry would have suffered injury. In this
respect, it was established that the electricity prices for
the
the
in the
Community industry is based were in line with the
prices in other major markets in the world and conse-
quently may not be considered as a source of a self-
inflicted injury. The electricity costs may have had
some impact on the overall performance, but only in
the case of one Community producer that experienced
the electricity supply due to important
shortages of
increases in the electricity prices and the related dispute
with the energy supplier. It is concluded that, overall,
increases in the cost of production have not contributed
to the injury suffered by the Community industry.

countries where

industrial users

show that,

overall,

(e) Self-inflicted injury

(143) As the investment of one Community producer increased
significantly between 2004 and the 2005 (see recital
it was examined if the injury was self-inflicted.
121),
impact on the cost of
This investment had a direct
the
production and therefore
Community industry. However, the analysis has shown
that due to limited weight of this investment in the total
cost of production, the impact on the profitability was
marginal. Therefore, it is concluded that the investment
of one Community producer may have contributed to
the injury suffered by the Community industry but not
to an extent to break the causal link.

the profitability of

(f) Downturn in the market for silico-manganese due to the

cycle in steel production

(144) Some parties claimed that the drop in the demand for
steel, and the consequent drop in demand for SiMn,

which occurred during the second half of 2004 and
the first half of 2005,
following the unprecedented
increase in demand described in recital 89, contributed
to the bad state of the Community industry. However,
the investigation has shown that over the full period
considered Community consumption increased overall
by 9 %. In view of this, the argument is rejected.

4. Conclusion on causation

in dumped imports

(145) The coincidence in time between, on the one hand, the
increase
from the PRC and
Kazakhstan, the increase in market shares and the under-
cutting found and, on the other hand, the deterioration
in the situation of the Community industry, leads to the
conclusion that the dumped imports caused the material
injury suffered by the Community industry within the
meaning of Article 3(6) of the basic Regulation.

injury

to the

to the

injury of

contribute

contributed

suffered by

(146) Other factors were analysed but were found not to be a
determining reason for the injury suffered. As concerns
Ukraine, which represents 23 % of market share, since
there is no undercutting overall, it is considered that its
the
imports did not
Imports from South Africa may
Community industry.
have
the
Community industry, but given their
small market
share and declining volumes not to an extent sufficient
link established with the imports
to break the causal
from the PRC and Kazakhstan. Due to the lack of under-
cutting, the import volumes and trend figures, there is
also no evidence that imports from India or other third
counties (including Brazil) have contributed to the injury
suffered by the Community industry. The investment of
one Community producer may have contributed to the
injury suffered by the Community industry; however, due
to limited weight of this investment, not to an extent to
break the causal link. Moreover, no other known factor,
i.e. the export performance of the Community industry,
competition from the other Community producer, the
increase in cost of production or the market cycle for
steel, has contributed to the injury of the Community
industry.

(147) Based on the above analysis, which has properly distin-
guished and separated the effects of all known factors
the Community
having an effect on the situation of
industry from the
the dumped
imports, it is concluded that the imports from the PRC
and Kazakhstan have caused material
injury to the
Community industry within the meaning of Article 3(6)
of the basic Regulation.

effect of

injurious

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F. COMMUNITY INTEREST

on

and

injury

despite

dumping,

examined whether,

the
(148) The Commission
conclusions
causation,
compelling reasons existed which would lead to the
conclusion that it is not in the Community interest to
adopt measures in this particular case. For this purpose,
and pursuant to Article 21(1) of the basic Regulation, the
Commission considered the likely impact of measures on
all parties involved as well as the likely consequences of
not taking measures.

(149)

1. Interest of the Community industry

In the light of the foregoing, measures would be imposed
on imports from the PRC and Kazakhstan. It is expected
that the imposition of these measures would lead to an
increase in prices for SiMn from those countries and
would provide the Community industry with an oppor-
tunity to improve its situation through increased prices
and possibly through increased sales volumes and market
share.
it is expected that
imports would continue at low prices from the PRC
and Kazakhstan and that
the Community industry
would not have the opportunity to improve its situation.

In the absence of measures,

(150) As for the low-carbon product, this represents only 5 %
of the production of the Community industry and is
imported mainly from Norway, but also from the PRC.
While it is considered that, should measures be imposed,
the quantities presently coming from the PRC could be
to some extent substituted by imports from Norway, the
measures would provide the Community industry with
the opportunity to increase its own production and sales
of low-carbon product in order to meet demand.

2. Interest of the other Community producers

(151) There is only one other producer in the Community in
addition to the Community industry. In the absence of
cooperation from this producer, and thus of precise data
it is estimated, based on infor-
concerning its activity,
mation from cooperating Community producers,
that
this manufacturer's production is around 10 % to 15 %
of that of the Community industry. Should anti-dumping
measures be imposed, the same type of developments, as
set out
in recitals 149 and 150 for the Community
industry, can be expected for this other Community
producer as well.

3. Interest of unrelated importers in the Community

(152) Two independent importers of the product concerned
completing and

cooperated in the proceeding by
submitting questionnaires.

(153) These importers expressed concern, should measures be
imposed, regarding (i) the negative impact on the supply
situation within the Community, given that
the total
production capacity within the Community amounted
to only approximately one third of the consumption,
and (ii) the adverse effect any measures would have on
the cost of the product concerned, which, as a funda-
mental raw material for the production of steel, would
affect overall Community steel production.

IP. However,

(154) As concerns the supply situation within the Community,
it is true that consumption is around three times the
current Community production capacity and that
the
Community industry only supplied around 25 % of
the
Community demand during the
Community industry was operating at around 70 %
capacity utilisation during the IP, and at between 70 %
and 80 % capacity utilisation over the period considered.
It is therefore in a position to significantly increase its
current production. Also, given the relatively limited
quantities of imports which will be subject to measures
(as indicated at recitals 149 and 150 above) and that the
countries
possible
imports
concerned could be compensated by exports
from
it is considered that the imposition of
other countries,
duties would not have any sizeable impact on the avail-
ability of supplies for importers. Also,
in addition to
from Community producers and from the
supplies
the
the
countries
Community market is also supplied, to the extent of
almost 40 % of consumption, by imports from other
countries, notably Norway,
India, South Africa and
Brazil. Those countries have cumulatively in the past
supplied higher quantities to the Community.

reduction of

investigation,

from the

concerned

by

(155)

It is recognised that if measures were introduced, there
may be some short-term disruption due to possible
delays with increasing Community production and if it
proves necessary for some users to arrange new or alter-
native supplies.

(156) As

as

far

are

even if

importers

concerned,

the
Community industry were to increase its production,
sales and market share within the Community, given
that the Community industry can only supply around
30 % of the market, and that Community consumption
is growing, there would still remain a need for substantial
import activity. While it
importers
generally operate on a relatively low profit margin and
that any short-term disruption resulting from users
seeking to arrange new or alternative supplies could
negatively affect
is considered that
importers are in a position to safeguard their margins
by passing on any increased costs to users.

is recognised that

their margins,

it

5.12.2007

EN

Official Journal of the European Union

L 317/29

4. Interest of the users

(157) Ten users of the product concerned in the metal industry
cooperated in the proceeding by
completing and
submitting questionnaires or making submissions. A
submission was also received from the European Confed-
eration of Iron and Steel Industries (EUROFER).

pass on the effect of any price increase for the product
concerned, which will be limited by the relatively minor
significance of SiMn in the overall
steel
production.

cost of

regarding sufficient
(158) Users expressed similar concerns
as did
end-users,
for
supply and increased costs
importers, as
the
stated in recital 153 above. For
reasons set out in recital 154, it is considered that the
imposition of measures would not have a serious detri-
mental mid-term effect on the supply situation in the
Community.

(161) Users also questioned the effectiveness of

the Community industry.

imposing
measures, arguing that the imposition and removal of
previous measures had little effect on the profitability
of
In this regard, although
the purpose of imposing anti-dumping measures is to
restore fair market conditions with a view to providing
the opportunity for a Community industry, which was
materially injured through dumping, to recover, the fact
that such recovery may not have realised in the past
should not be a reason against considering the appropri-
ateness of imposing anti-dumping measures where this is
now warranted.

(159) The direct effect of an increase in the price of SiMn on
steel production costs would be limited, given that the
SiMn represents at most 1 % of the production cost of
carbon steel, and even less in the case of stainless steel.
On the basis of information supplied by the user industry
association (EUROFER) concerning the total annual cost
for their usage of SiMn, it is estimated that the effect of
even a significant increase of 20 % in the price affecting
all SiMn would be to reduce the profitability of steel
producers (currently achieving profit levels of between
10 % to 40 %) by only around 0,2 %. Given that
measures would be at a significantly lower rate, and
the
would only
Community consumption (in case that no imports
subject
to measures would be substituted by imports
from other origins), the effect of any possible measures
on the profitability of
industry would be
extremely limited.

a maximum of 10 % of

the steel

affect

(160)

It has been claimed that the market for the SiMn is a
global one and that global demand is increasing in line
with increasing demand for
steel. When demand
increases over supply, this can lead to significant price
increases, as happened in 2004. Should a temporary
disruption of supply and demand in the Community
develop, as described in recital 155, this could lead to
price increases in the short-term in excess of the level of
any duties imposed. However, in view of the fact that the
market for the SiMn is a global one, it is considered that
the price level within the Community is set by the
supply and demand and that
interplay of global
line with
Community prices should not go out of
world prices to any great degree for any extended
period due to the significant presence of imports from
other origins on the market. In addition, steel producers,
who are currently operating at satisfactory profit levels
(10 % to 40 %), will, in any case, have the possibility to

steel

industry has

(162) Some users pointed out that over the past 10 years or so
the Community
suffered from
increased costs from anti-dumping measures which had
been placed on a variety of raw materials used solely or
mainly for steel production. They also pointed out that,
there were a
in addition to the present proceeding,
number of other proceedings currently open concerning
raw materials used in steel production. The overall effect,
they argued, was to place the Community steel producers
at a disadvantage internationally. As regards previous
it should be noted that the majority of the
measures,
previous measures have now expired. As concerns the
cumulative effect of measures on a number of raw
materials, it should be borne in mind that the purpose
of anti-dumping measures is to eliminate the impact of
distorted market conditions arising from the presence of
dumped imports. As such, the effect of anti-dumping
measures, even when imposed on a number of raw
materials affecting the same industry, should not have
a distorting effect. In any event, the impact of the impo-
sition of any measures in this case on the steel industry
would be negligible, as explained in recital 159 above.

for users and have little effect

(163) Following disclosure, EUROFER reiterated its argument
that the imposition of measures would not be in the
overall Community interest since they would lead to
increased costs
in
improving the situation of the Community industry. No
respect and
new information was provided in this
therefore the reasoning provided above (recitals 157 to
162) is confirmed and on this basis it is considered that
any impact from the imposition of an anti-dumping duty
on the financial
likely to be
situation of users
negligible overall.

is

L 317/30

EN

Official Journal of the European Union

5.12.2007

5. Conclusion on Community interest

(164) To conclude,

it

similar

the imposition of
is expected that
measures on imports from the PRC and Kazakhstan
would, despite the availability of limited and decreasing
quantities of SiMn on the market from other countries
(i.e. South Africa and Norway in case of
low-carbon
SiMn) and from suppliers not subject to measures at
to those practiced by the PRC and
prices
to the imposition of any duties,
Kazakhstan prior
provide an opportunity for the Community industry, as
well as the other Community producer, to improve its
situation through increased sales volumes, sales prices
and market share. While some negative effects may
occur in the form of cost increases for users arising
out of the possible need to arrange new or alternative
supplies, it is considered that the overall effect on users
of
imposition of measures on the PRC and
Kazakhstan would be negligible. In light of the above,
it is concluded that no compelling reasons exist for not
imposing measures in the present case and that the appli-
cation of such measures would be in the interest of the
Community.

the

(167) The necessary price increase was then determined on the
basis of a comparison, per product type, of the weighted
average import price, as established for the price under-
cutting calculations, with the non-injurious price of the
like product sold by the Community industry on the
Community market. The non-injurious price has been
obtained by adjusting the sales price of the Community
industry in order to reflect the above mentioned profit
margin. Any difference resulting from this comparison
the total cif
was then expressed as a percentage of
import value.
IT being
granted to any of
the cooperating Chinese exporting
producers, a countrywide injury margin was calculated
for the whole of the PRC on the basis of prices from
Comext.

In the absence of MET or

(168) The above mentioned price comparison showed the

following injury margins:

G. DEFINITIVE MEASURES

Estimated injury elimination level

(165) The level of any anti-dumping measures

should be
sufficient
to eliminate the injury to the Community
industry caused by the dumped imports, without
exceeding the dumping margins found. When calculating
the amount of duty necessary to remove the effects of
the injurious dumping,
it was considered that any
measures
should allow the Community industry to
obtain a profit before tax that could be reasonably
i.e.
achieved under normal conditions of competition,
in the absence of dumped imports.

(169)

Ukraine: all companies

OJSC Kazchrome

PRC

1,6 %

7,3 %

8,2 %

In the light of the foregoing and pursuant to Article 9(4)
of the basic Regulation, it is considered that a definitive
anti-dumping duty should be imposed in respect of
imports of SiMn originating in Kazakhstan and in the
PRC at
the dumping and
injury margins, in accordance with the lesser duty rule.
By analogy with Article 9(3) of the basic Regulation,
given that the injury margin for Ukraine is below a de
minimis level, the investigation in respect of this country
should be terminated.

the lower of

the level of

(166) The Community industry claimed that a profit margin of
8 % of turnover should be regarded as an appropriate
level that it could be expected to obtain in the absence
of
injurious dumping. This was examined and it was
found that the claimed profit margin would result in
investment over a relatively
the recovery of capital
short time period. In addition, the investigation showed
that the Community industry itself generally depreciated
its capital investments over a longer time frame. On this
basis, it is considered that a profit margin of 5 %, which
is in line with the margin that was used in the investi-
gation which led to the previous anti-dumping measures,
is an appropriate level
the Community industry
that
could be expected to obtain in the absence of injurious
dumping.

(170) Consequently, and for the reasons already mentioned at
recitals 165 to 169, the anti-dumping duties should be as
follows:

Country

Company

Rate of duty

Kazakhstan

All companies

PRC

All companies

6,5 %

8,2 %

5.12.2007

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Official Journal of the European Union

L 317/31

H. UNDERTAKINGS

(171) Following the disclosure of essential

facts and con-
siderations on the basis of which it was intended to
recommend the imposition of definitive anti-dumping
duties, the exporting producer in Kazakhstan offered a
price undertaking in accordance with Article 8(1) of the
basic Regulation. The product concerned has shown in
the last years a considerable volatility in prices and
therefore it is not suitable for a fixed price undertaking.
In order
to overcome this problem the exporting
producer offered to index the minimum import price
to the price of
the main raw material, namely
manganese ore. However, the fluctuation in the price
of the product concerned cannot be explained by the
fluctuation in the price of the main raw material, and
thus it is not possible to index the minimum import
prices to the price of the raw material. As an alternative
approach the exporting producer also offered to index
the minimum import price on the basis of its own cost
of production as it is shown in its audited accounts.
However
the
evolution of its cost do not necessarily correspond to
the evolution of its prices. Moreover, such an under-
taking is considered as unworkable since it would be
very difficult for the Commission to constantly monitor
the evolution of costs. On the basis of the above it was
concluded that the undertaking offered by the exporter
cannot be accepted,

this approach cannot be accepted as

imports of silico-manganese (including ferro-silico-manganese)
falling within CN codes 7202 30 00 and ex 8111 00 11
(TARIC code 8111 00 11 10), originating in the People's
Republic of China and Kazakhstan.

The rate of anti-dumping duty applicable to the net, free-
2.
at-Community-frontier price, before duty, of
the products
described in paragraph 1 and produced by the companies
below shall be as follows:

Country

Manufacturer

Rate of duty

Kazakhstan

PRC

All companies

All companies

6,5 %

8,2 %

Unless otherwise

3.
concerning customs duties shall apply.

specified,

the provisions

in force

Article 2

The proceeding concerning imports of silico-manganese orig-
inating in Ukraine is hereby terminated.

HAS ADOPTED THIS REGULATION:

Article 1

1.

A definitive anti-dumping duty is hereby imposed on

Article 3

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

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

Done at Brussels, 4 December 2007.

For the Council
The President

F. TEIXEIRA DOS SANTOS