Proposal for a Council Regulation repealing the anti-dumping duty on imports of ferro molybdenum originating in the People's Republic of China and terminating the proceeding in respect of such imports, following review pursuant to Article 11(3) of Council Regulation (EC) No 384/96
Date: 2007-12-20
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, ferro-alloy, import, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.12.2007 
COM(2007) 835 final 

Proposal for a 

COUNCIL REGULATION 

repealing the anti-dumping duty on imports of ferro molybdenum originating in the 
People's Republic of China and terminating the proceeding in respect of such imports, 
following review pursuant to Article 11(3) of Council Regulation (EC) No 384/96 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the European Community, as last amended by Council Regulation (EC) No 2117/2005 
of 21 December 2005 ('the basic Regulation') in the proceeding concerning imports of 
ferro-molybdenum  originating  in  the  People's  Republic  of  China,  following  an  ex 
officio full interim review pursuant to Article 11(3) of the basic Regulation.  

120 

•  General context 

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

139 

141 

219 

229 

230 

•  Existing provisions in the area of the proposal 

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

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

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

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

3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

On 31 October 2006, the Commission initiated an ex officio full interim review of the 

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anti-dumping  measures  applicable 
imports  of  ferro  molybdenum  ('FeMo') 
originating in the People's Republic of China ('PRC') imposed by Council Regulation 
(EC) No 215/2002 of 28 January 2002. 

to 

On  30  January  2007,  in  line  with  the  provisions  of  Article  11(7)  of  the  basic 
Regulation, the ex officio full interim review was extended in order to cover the expiry 
review aspects as defined under Article 11(2) of the basic Regulation i.e. whether the 
expiry  of  the  anti-dumping  measures  would  be  likely  to  lead  to  the  continuation  or 
recurrence of dumping and injury. 

The review investigation revealed that it is unlikely that significant volumes of dumped 
exports  of  FeMo  from  the  PRC  to  the  Community  to  recur  should  the  measures  be 
repealed.  Thus,  there  is  no  reason  to  maintain  the  existing  measures  on  imports  of 
FeMo from this country.  

Therefore,  it  is  suggested  that  the  Council  adopts  the  attached  proposal  for  a 
Regulation in order to repeal the existing measures against the PRC and terminate the 
proceeding against this country. 

310 

•  Legal basis 

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

329 

•  Subsidiarity principle 

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

•  Proportionality principle 

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

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

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

•  Choice of instruments 

Proposed instruments: Regulation. 

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

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

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332 

341 

342 

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4)  BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

repealing the anti-dumping duty on imports of ferro molybdenum originating in the 
People's Republic of China and terminating the proceeding in respect of such imports, 
following review pursuant to Article 11(3) of Council Regulation (EC) No 384/96 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 ('the basic 
Regulation'), and in particular Articles 11(2), 11(3) and 11(7) thereof, 

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

Whereas: 

1. 

Measures in force 

A. PROCEDURE 

(1) 

(2) 

In January 2002, the Council, by Regulation (EC) No 215/20022, imposed a definitive 
anti-dumping  duty  on  imports  of  ferro-molybdenum  ('FeMo')  originating  in  the 
People's  Republic  of  China  ('PRC'),  falling  under  CN  code  7202  70  00  ('the  product 
concerned'). The investigation period that led to these measures was 1 October 1999 to 
30 September 2000 and will be referred to as 'the original investigation'. The measures 
imposed by Regulation (EC) No 215/2002 consisted of an ad valorem duty of 22,5 %. 

In October 2006, the Commission, by Decision 2006/714/EC3, suspended for a period 
of  nine  months  the  definitive  anti-dumping  duty  imposed  by  regulation  (EC)  No 
215/2002 on imports of the product concerned originating in the PRC. The decision to 
suspend  the  definitive  anti-dumping  duty  imposed  by  Council  Regulation  (EC)  No 
215/2002  was  taken  in  line  with  the  provisions  of  Article  14(4)  of  the  basic 
Regulation.  

(3) 

The Commission concluded in its Decision 2006/714/EC that the injury linked to the 
imports of the product concerned originating in the PRC was unlikely to resume as a 
result  of  the  suspension  because  of  the  temporary  change  in  market  conditions,  in 

1 

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OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p. 17). 
OJ L 35, 6.2.2002, p. 1. 
OJ L 293, 24.10.2006, p. 15. 

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(4) 

(5) 

particular the high level of prices of the product concerned on the Community market, 
which  was  far  above  the  injurious  level  found  in  the  original  investigation,  together 
with the alleged demand-supply imbalance for the product concerned. 

In  July  2007,  the  Council,  by  Regulation  (EC)  No  856/20074,  extended  until  31 
January  2008  the  suspension  of  the  definitive  anti-dumping  duty  imposed  by 
Regulation (EC) No 215/2002 on imports of the product concerned originating in the 
PRC. 

The  Council  concluded  in  Regulation  (EC)  No  856/2007  that  the  situation  in  the 
Community  market  with  respect  to  the  product  concerned  has  remained  unchanged 
following  the  suspension  of  the  anti-dumping  duty  in  October  2006  and  decided, 
pending the outcome of the review (see recitals (6) to (8)), to extent the suspension of 
the measures in force in accordance with the provisions of Article 14(4) of the basic 
Regulation. 

2. 

Review of the measures 

(6) 

(7) 

(8) 

On  31  October  2006  an  ex  officio  full  interim  review  of  the  anti-dumping  measures 
applicable  to  imports  of  FeMo  originating  in  the  PRC  was  initiated,  in  line  with  the 
provisions  of  Article  11(3)  of  the  basic  Regulation,  by  a  notice  published  in  the 
Official  Journal  of  the  European  Union5  since  the  corpus  of  evidence  at  the 
Commission’s  disposal  indicated  prima  facie  that  the  circumstances  on  the  basis  of 
which  the  existing  measures  were  established  have  changed  to  the  extent  that  the 
existing  measures  might  no  longer  be  adequate  and  that  certain  of  these  changes 
appeared to be of a lasting nature. 

It is recalled that in line with the provisions of Article 11(7) of the basic Regulation 
where  an  interim  review  of  anti-dumping  measures  pursuant  to  Article  11(3)  of  the 
basic Regulation is in progress at the end of the period of application of anti-dumping 
measures as defined in Article 11(2) of the basic Regulation, the interim review shall 
also  cover  the  circumstances  set  out  for  expiry  reviews  in  Article  11(2)  of  the  basic 
Regulation.  

Account taken of the above, and given that the measures imposed by Regulation (EC) 
No  215/2002  were  due  to  expire  in  January  2007,  the  ex  officio  full  interim  review 
referred  under  recital  (6)  covered  the  circumstances  set  out  for  expiry  reviews. 
Therefore, the ex officio full interim review had to reach conclusions on whether the 
expiry  of  measures  would  be  likely  or  unlikely  to  lead  to  the  continuation  or 
recurrence of dumping and injury. 

3. 

Investigation 

(9) 

The  Commission  officially  advised  the  producers  in  the  PRC  and  their  association, 
users  and  their  associations  in  the  Community  known  to  be  concerned,  the 
representatives of the PRC and known Community producers and their association, of 
the  initiation  of  the  ex  officio  full  interim  review.  Interested  parties  were  given  the 

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OJ L 190, 21.7.2007, p.1. 
OJ C262,31.10.2006, p.28.  

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opportunity to make their views known in writing and to request a hearing within the 
time limit set out in the notice of initiation. 

(10) 

In view of the large number of Chinese exporters/producers expected to be involved, it 
was considered appropriate, in conformity with Article 17 of the basic Regulation, to 
examine  whether  sampling  should  be  used.  In  order  to  enable  the  Commission  to 
decide whether sampling would be necessary and, if so, to select a sample, the above-
mentioned  parties  were  requested  to  make  themselves  known  within  15  days  of  the 
initiation of the review and to provide the Commission with the information requested 
in  the  notice  of  initiation.  However  only  one  Chinese  producer  came  forward  and 
provided  the  requested  information  for  sampling.  Therefore,  it  was  decided  that 
sampling was not necessary. 

(11) 

In  order  to  allow  exporters/producers  in  the  PRC  to  submit  a  claim  for  market 
economy  treatment  ('MET')  or  individual  treatment  ('IT'),  if  they  so  whished,  the 
Commission  sent  claim  forms  to  the  exporters/producers  known  to  be  concerned,  to 
the authorities of the PRC and to the China Chamber of Commerce of Metals Minerals 
and Chemicals Importers and Exporters ('CCCMC'). 

(12)  The  Commission  sent  questionnaires  to  the  sole  co-operating  Chinese  producer,  to 
users  and  unrelated  importers  known  to  be  concerned,  to  the  Community  producers 
known  to  be  concerned  and  to  known  producers  of  FeMo  in  the  United  States  of 
America ('USA') which was chosen as analogue country in the original investigation. 

(13)  Replies  to  the  questionnaires  were  received  from  three  Community  producers 
(representing 100 % of production in the Community), one producer in the PRC, two 
users  and  one  USA  producer.  The  Commission  also  received  comments  and 
information  from  two  users,  the  European  Foundries  Association,  the  Cast  Metals 
Federation, the European Confederation of Iron and Steel Industries ('EUROFER'), the 
Association of European Ferro Alloys Producers ('EUROALLIAGES'), the CCCMC, 
one Chinese producer and one USA producer. 

(14)  The  Commission  sought  and  verified  all  the  information  it  deemed  necessary  for  its 
analysis and carried out verification visits at the premises of the following companies: 

(a)  Community producers 

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– 

– 

Climax Molybdenum UK Ltd, Stowmarket, United Kingdom  

Sadaci, N.V., Gent, Belgium 

Treibacher Industrie AG, Treibach-Althofen, Austria 

(b)  Producer in the PRC 

– 

Nanjing Metalink International Co. Ltd., Nanjing 

(c)  Producer in the USA 

– 

Bear Metallurgical Company, Butler, Pennsylvania 

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(d)  Community Users 

– 

– 

Corus UK Limited, Scunthorpe, United Kingdom  

Böhler-Uddeholm AG, Vienna, Austria  

(15)  The investigation on the circumstances with regard to dumping and injury and on the 
continuation  and/or  recurrence  of  dumping  and  injury  covered  the  period  from  1st 
October  2005  to  30  September  2006  ('review  investigation  period'  or  'RIP').  The 
examination  of  the  trends  relevant  for  the  assessment  of  the  likelihood  of  a 
continuation or recurrence of injury covered the period from 1st January 2003 up to the 
end of the RIP ('period considered').  

B. PRODUCT CONCERNED AND LIKE PRODUCT 

1. 

Product concerned 

(16)  The  definition  of  the  product  concerned  corresponds  to  that  used  in  the  original 

investigation mentioned under recital (1) above. 

(17)  The  product  concerned  is  ferro  molybdenum  originating  in  the  PRC,  currently 

classifiable within CN code 7202 70 00.  

(18)  FeMo is a ferro-alloy containing usually between 45 % and 80 % of molybdenum, the 
remaining part being iron and small quantities of impurities. The actual molybdenum 
(Mo)  content  of  FeMo  is  variable  and  it  is  expressed  as  a  percentage  of  the  total 
weight of FeMo. The two main types of production process used in the production of 
FeMo  are  the  thermic  and  the  electrolytic  processes.  In  both  cases,  technical  grade 
molybdenum trioxide ('MoO3') is reduced in the presence of iron. However, because of 
practical reasons and higher costs the electrolytic method is practically not used. In the 
thermic production process aluminium and silicon metals are used for the reduction of 
a charge consisting of a mixture of MoO3 and iron oxide. 

(19)  FeMo is used in the melts during the production of alloyed steel and cast iron because 
of the ability of molybdenum to enhance the resistance to corrosion and to heat of the 
alloyed steel and cast iron. 

(20)  The  product  is  sold  in  different  product  grades  according  to  the  proportion  of 
molybdenum  content  and  the  proportion  of  impurities.  The  investigation  has  shown 
that all product grades have the same basic physical and chemical characteristics and 
the same uses. Therefore, and for the purposes of the current review, all types of the 
product concerned are considered as one product. 

2. 

Like product 

(21)  The current review has shown that the product concerned and the FeMo produced and 
sold  on  the  domestic  markets  of  the  PRC  and  the  USA  as  well  as  the  FeMo 
manufactured and sold in the Community by the Community producers have the same 
basic  physical  and  chemical  characteristics  and  the  same  uses.  Therefore,  these 
products are considered to be a like product within the meaning of Article 1(4) of the 
basic Regulation. 

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C. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING 

1. 

Preliminary remarks 

(22) 

In  accordance  with  Articles  11(2),  11(3)  and  11(7)  of  the  basic  Regulation,  it  was 
examined whether dumping was currently taking place and whether the expiry of the 
measures would be likely to lead to a continuation or a recurrence of dumping.  

(23)  During  the  RIP,  there  were  practically  no  imports  to  the  Community  of  FeMo 
originating in the PRC ('the country concerned'). According to Eurostat, imports from 
the  country  concerned  amounted  to  only  13,8  tonnes  in  EU  27  during  the  RIP 
(practically representing some 0,04 % of Community consumption), whilst they were 
more than 13 200 tonnes in EU 15 during the original investigation. It is noted that all 
FeMo data in the Regulation are adapted as to correspond to the Mo content. 

(24)  The  sole  Chinese  co-operating  producer  did  not  have  export  sales  of  FeMo  either  to 
the  Community  or  to  anywhere  else  during  the  RIP  and,  thus,  no  representative 
dumping calculations on the basis of its own data could be made in order to determine 
the likelihood of recurrence of dumped exports.  

(25)  Consequently, the likelihood of recurrence of dumping analysis had to take account of 
information  relating  to  the  period  after  the  RIP  i.e.  when  the  anti-dumping  duty  was 
suspended.  

2.1.  Market economy treatment ('MET') 

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

•  1.  business  decisions  and  costs  are  made  in  response  to  market  conditions,  and 

without significant State interference; 

•  2.  accounting  records  are  independently  audited,  in  line  with  International 

Accounting Standards (‘IAS’) and applied for all purposes; 

•  3.  there  are  no  significant  distortions  carried  over  from  the  former  non-market 

economy system; 

•  4. legal certainty and stability is provided by bankruptcy and property laws; 

•  5. currency exchanges are carried out at the market rate. 

(27)  The sole co-operating Chinese producer of FeMo 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.  Although  this  Chinese  producer  did  not  have 

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any export sales of FeMo, it was considered appropriate to examine its MET claim in 
view of the very low level of Chinese co-operation. 

(28)  For  the  sole  co-operating  producer  the  Commission  sought  all  information  deemed 
necessary and verified the information submitted in the MET claim at the premises of 
the company in question. 

(29)  The sole Chinese producer, Nanjing Metalink International Co. Ltd., Nanjing, did not 
show that it fulfils all the criteria set out in Article 2(7)(c) of the basic Regulation. The 
company did not fulfil criteria 1, 2 and 3. 

(30)  The  co-operating  Chinese  exporting  producer,  the  CCCMC  and  the  Community 
industry  were  given  an  opportunity  to  comment  on  the  above  findings  but  no 
comments were made. 

(31)  As far as criterion 1 is concerned it was established on spot that the company did not 
pay the applicable social contributions for the vast majority of its workers disregarding 
without any consequence the relevant Chinese legislation. Furthermore, the company 
was not  able to  provide  any evidence on the transfer of shares between  the  previous 
and the new Chinese shareholder. It was also revealed on spot that new state-imposed 
export restrictions were introduced recently in the Chinese FeMo industrial sector. In 
particular,  the  Chinese  authorities  have  introduced,  following  the  RIP,  an  export 
licensing  system  for  the  exports  of  FeMo.  Producers  wishing  to  obtain  an  export 
license are requested to meet a clear and restrictive set of conditions referring, among 
other things, to past minimum production and export performance volumes. According 
to  the  relevant  legislation  the  provincial  commerce  authorities  and  the  CCCMC 
examine all applications and the Chinese Ministry of Commerce decides and publishes 
the  list  of  enterprises  that  qualify  for  obtaining  an  export  license.  The  aforesaid 
minimum production and export sales requirements could be unilaterally modified by 
the  relevant  authorities.  It  is  obvious  that  any  producer  which  does  not  meet  the 
production and export sales performance volumes will not be entitled to export FeMo. 
The same applies for any new producer since the allocation of licenses is based on a 
past  production  and  export  record.  Although  the  aforesaid  development  concerning 
export  sales restrictions took  place after the RIP it was regarded necessary to take it 
into  consideration  when  assessing  the  company's  MET  claim  since  failure  to  take  it 
into account would lead to manifestly inappropriate conclusions. Consequently, it was 
concluded that the company has not shown that it fulfils criterion 1.  

(32)  As  far  as  criterion  2  is  concerned  it  was  established  on  spot  that  fundamental 
International Accounting Standards principles were disregarded (i.e. accrual principle, 
offsetting, inconsistencies between the amounts reported in the accounts and the actual 
source accounting material, lack of faithful representations of transactions) both in the 
accounts  and  in  their  audit  which  put  into  question  the  reliability  of  the  company's 
accounts.  Consequently,  it  was  concluded  that  the  company  has  not  shown  that  it 
fulfils criterion 2.  

(33)  As far as criterion 3 is concerned the existence of significant distortions carried over 
from the non-market economy system was established on spot. The company enjoyed 
significant  income  tax  exemptions.  As  far  as  land  use  rights  are  concerned  it  was 
revealed on spot that: (i) the allocation of land was linked to investment undertakings 
and  (ii)  the  payments  for  land  use  rights  were  either  missing  from  the  accounting 

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records or did not exist as an obligation in the land use rights contracts. Furthermore, 
assets were evaluated only by state-owned companies and the supporting material on 
conditions  applied  to  short  term  loans  was  not  available.  Consequently,  it  was 
concluded that the company has not shown that it fulfils criterion 3.  

(34)  On  the  basis  of  the  above,  it  was  concluded  that  the  sole  co-operating  Chinese 
producer  has  not  shown  that  it  fulfils  all  the  criteria  set  out  in  Article  2(7)(c)  of  the 
basic Regulation and, thus, could not be granted MET. 

2.2. 

Individual treatment ('IT') 

(35)  Pursuant  to  Article  2(7)(a)  of  the  basic  Regulation,  a  country-wide  duty,  if  any,  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. 

(36)  The  sole  Chinese  producer  who  requested  MET  also  claimed  IT  in  the  event  that  it 

would not be granted MET. 

(37)  On the basis of the information available, it was established that the company did not 
export FeMo during the RIP either to the Community or to any other country. Thus, it 
was not possible to establish whether the requirements foreseen in Article 9(5) of the 
basic Regulation are fulfilled. It was therefore concluded that the company could not 
be granted IT. 

2.3.  Analogue country  

(38)  According to Article 2(7) of the basic Regulation, in case of imports from non-market-
economy  countries  and  to  the  extent  that  MET  could  not  be  granted,  for  countries 
specified in Article 2(7)(b) of the basic Regulation, normal value has to be established 
on the basis of the price or constructed value in an analogue country. 

(39) 

In the notice of initiation the Commission indicated its intention to use the USA as an 
appropriate analogue country for the purpose of establishing normal value for the PRC 
and invited the interested parties to comment thereon. No comments were received on 
this  matter.  In  view  of  the  above,  it  is  concluded  that  the  USA  constitutes  an 
appropriate  analogue  country  in  accordance  with  Article  2(7)(a)  of  the  basic 
Regulation as it was also the case in the original investigation. 

2.4.  Dumping margin during the RIP  

(40)  As described under recital (23) above, there were practically no imports of the product 
concerned  to  the  Community  during  the  RIP.  These  did  not  allow  for  a  meaningful 
dumping calculation.  

(41)  Account taken of the above and for the sake of transparency of the investigation the 
countrywide  dumping  margin,  based  on  a  weighted  average-to-average  comparison 
and expressed as a percentage of the CIF Community frontier price duty unpaid, was 
calculated and found to be 18,5 %. 

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3. 

Development of dumped exports should the measures be repealed 

PRC's industrial policy with regard to FeMO 

(42)  As to the situation in the PRC, the investigation established that the PRC is currently 
applying  an  industrial  policy  that  aims  at  the  restriction  of  FeMo  exports.  This  is 
clearly  pictured  in  the  recent  measures  taken  for  FeMo  by  the  Chinese  authorities; 
namely: (i) the abolition of export tax rebates on exports of FeMo which took effect 
before the RIP, (ii) the introduction of an export tax on exports of FeMo which took 
effect  on  1  November  2006,  (iii)  the  introduction  on  1  January  2007  of  an  export 
licensing system for companies whishing to export FeMo and (iv) the introduction on 
1  March  2007  of  an  export  quota  system  applicable  to  companies  that  have  been 
awarded with export licenses for FeMo (see recital (31) above). 

The situation of the co-operating PRC producer 

(43) 

It  is  recalled  that  only  one  Chinese  producer  co-operated  with  the  investigation  who 
did  not  export  during  the  RIP,  but  only  made  some  limited  sales  of  FeMo  in  the 
domestic  market.  The  situation  of  this  small  company  does  not  allow  for  any 
extrapolations for Chinese producers.  

(44)  The  company's  capacity  utilisation  ratio  was  less  than  1  %.  However,  account  being 
taken  of  the  new  policy  on  the  FeMo  industrial  sector  as  applied  by  the  Chinese 
authorities (see recitals (31) and (42)), it is highly unlikely that the company will be 
able to use any significant part of this capacity. Indeed, the company produced limited 
and decreasing quantities of FeMo during the last three years before the RIP and had 
no export sales. In fact, the company could be regarded as an occasional producer of 
FeMo  performing  sporadic  sales  of  the  product  concerned.  It  would  be  therefore 
difficult for the company to acquire an export license and be allocated an export quota 
since all these are  based  on  past export performance  and production activity figures. 
Thus,  this  Chinese  producer  would  probably  have  no  right  to  export  FeMo  to  the 
Community  in  the  future.  Given  these  sporadic  production  activities  over  the  last 
couple of years and in view of the new Chinese policies applied to the FeMo industry, 
i.e. that the Chinese authorities want to regulate the FeMo exports as described above, 
there  is  no  likelihood  of  recurrence  of  any  significant  volumes  of  exports  to  the 
Community in the near future for this company. In any event, the findings with regard 
to this company are not considered as representative. 

Spare capacity and stocks of other PRC producers 

(45)  No  reliable  information  as  to  the  production  capacity  and  volumes,  stocks  and  sales 
was  available  for  the  non-cooperating  companies.  In  this  respect,  EUROALLIAGES 
has argued that there is significant idle and available capacity in the PRC as well as 
information  on  Chinese  companies  resuming  mining  operations  in  one  of  the  most 
important mining areas in the PRC. EUROFER on the other hand has argued that the 
Chinese FeMo sector is under a consolidation and restructuring process and companies 
that  do  not  comply  with  the  new  Chinese  regulatory  framework  are  threatened  with 
closure thus undermining any possible increase in capacities and production volumes. 
In  other  words,  the  information  on  file  as  to  current  and  future  spare  production 
capacity, stocks etc. is not entirely conclusive.  

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(46)  However, in order to have a meaningful indication as to the future exporting behaviour 
of  Chinese  producers,  their  export  activities  during  the  long  period  of  suspension  of 
anti-dumping measures were considered as the most suggestive evidence of the future 
trends.  It  is  recalled  that  on  the  basis  of  the  information  available  from  Eurostat, 
Chinese exports of FeMo to the Community from other than the co-operating Chinese 
producer were negligible in the RIP. Despite the suspension of the anti-dumping duty 
of 22,5 %, Chinese imports in the Community after the RIP have remained low. This 
is  a  clear  indication  that  the  non-cooperating  companies  do  not  have  any  significant 
interest  in  the  Community  market  and  this  luck  of  interest  would  in  all  likelihood 
remain in the foreseeable future. 

Price level on the Community market 

(47)  As  explained  under  recitals  (2)  to  (5),  since  October  2006  the  anti-dumping  duty 
applicable to imports of FeMo originating in the PRC is suspended. According to the 
relevant Eurostat data, this has led to a moderate increase in imports of Chinese FeMo. 
Indeed, during the period October 2006 to August 2007 there were some 846 tonnes of 
Chinese FeMo imported into the Community (EU 27) compared with imports of 13,8 
tonnes during the RIP. On an extrapolated basis, these 846 tonnes represent a market 
share of less than 2,5 % of the EU 27 Community market. Furthermore, it appears that 
on a 12-month basis Chinese imports in EU  27 are  less than 8 % of those  in EU 15 
during the original investigation. These imports are by far lower than those from the 
major  FeMo  exporting  third  countries  to  the  Community  (i.e.  Chile,  Armenia  and 
Russia).  In  addition,  the  fact  that  despite  the  suspension  of  the  significant  anti-
dumping  duty  of  22,5  %,  the  Chinese  exports  sales  to  the  Community  increased 
moderately  indicates  that  the  Chinese  producers  have  found  elsewhere  markets. 
Moreover, they could always focus on their domestic market for the reasons described 
under recitals (31) and (42). It is noted that sales prices in the Community (i.e. import 
prices including those from the PRC and Community producers’ prices) increased six 
times between the original investigation and the RIP. It was found that after the RIP 
when  the  measures  were  suspended,  the  Chinese  average  import  price  increased  by 
some 15 % and reached the level of the average import price from other sources (e.g. 
Chile,  Armenia,  Iran  and  Russia).  In  other  words,  Chinese  post  RIP  imports  do  not 
undercut prices of other players on the Community market but ‘follow the flow’. 

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

(48)  There is no reliable and verifiable information on the price level in China. Data from 
the  sole  co-operating  Chinese  producer  showed  that  its  domestic  sales  prices  are 
relatively  low.  Nevertheless,  as  these  domestic  sales  were  only  sporadic  this 
information  is  clearly  not  sufficient  to  arrive  to  any  concrete  conclusion  on  the 
likelihood of recurrence of dumping on exports to the Community should measures be 
repealed.  Furthermore,  no  MET  was  granted  which  would  have  allowed  a  proper 
comparison  of  Chinese  domestic  prices  with  export  prices.  However,  it  is  noted  that 
the  dumping  margin  established  for  the  practically  non  existent  exports  in  the  RIP 
(18,5  %)  is  significantly  lower  than  the  dumping  margin  established  in  the  original 
investigation  (38,5  %).  Given  the  apparent  increase  by  some  15  %  of  the  Chinese 
export prices following the RIP, it appears that currently any exports from the PRC to 
the Community would in all likelihood not be dumped. 

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

(49)  Statistical information allegedly based on the China Export Statistics submitted by the 
Community  industry  showed  that  during  the  RIP  and  afterwards  the  Chinese  export 
prices to third countries were on average at the same level as Chinese export prices to 
the  Community.  This  may  indicate  that  the  Chinese  producers  do  not  differentiate 
greatly  their  export  price  policies  depending  on  the  export market  and,  thus,  there  is 
neither incentive nor any likelihood to shift any significant exports to the Community 
market. 

Chinese domestic demand 

(50)  Available  information  suggests  that  the  PRC  has  a  very  important  domestic  demand 
for its FeMo production. Furthermore, as it was explained under recital (42) the PRC 
has developed a comprehensive package of measures aimed at securing future supplies 
of  FeMo.  While  it  is  true  that  such  export  restricting  policies  could  change  very 
quickly, the PRC has no incentive to do so in the foreseeable future.  

4. 

Conclusion 

(51)  For the examination as to whether it would be likely that dumping would recur should 
the  anti-dumping  measures  be  repealed,  the  Commission  sought  and  verified  all 
information that was made available.  

(52)  This examination revealed that, whilst there may be some spare production capacity in 
the PRC, this would not lead to a resumption of significant exports to the Community 
if measures are allowed to expire because the Chinese FeMo industrial policy aims at 
restricting  exports  and  in  any  event  there  is  no  obvious  price  incentive  which  could 
divert  sales  to  the  Community.  There  are  therefore  no  reasons  to  believe  that  the 
volume of Chinese exports, at least in the foreseeable future, will be significant and, 
more importantly, any such exports are not expected to be made at dumped prices as 
established in the original investigation.  

(53)  Consequently, since there is no likelihood of recurrence of dumped exports from the 
country concerned which could cause injury, there is no need to analyse the likelihood 
of recurrence of injury and the Community interest. The measures on imports of FeMo 
originating in the PRC should therefore be repealed and the proceeding terminated.  

D. DISCLOSURE 

(54) 

Interested parties were informed of the essential facts and considerations on the basis 
of  which  it  was  intended  to  propose  that  the  existing  measures  against  the  PRC  be 
repealed  and  the  proceeding  terminated.  All  parties  were  given  an  opportunity  to 
comment. No party objected to the findings set out above. 

(55) 

It  is  therefore  concuded  that  since  there  is  no  likelihood  of  resumption  of  any 
significant  quantities  of  dumped  exports  of  FeMo  to  the  Community  from  the  PRC, 
the measures should be repealed and the proceeding terminated, 

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HAS ADOPTED THIS REGULATION: 

Article 1 

The  anti-dumping  measures  on  imports  of  ferro  molybdenum  originating  in  the  People's 
Republic  of  China  imposed  by  Council  Regulations  (EC)  No  215/2002  are  hereby  repealed 
and the proceeding concerning these imports is terminated. 

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

Article 2 

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

Done at Brussels,  

For the Council 
The President 

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