2008/227/EC: Commission Decision of 17 March 2008 terminating the anti-dumping proceeding concerning imports of polyvinyl alcohol originating in the People’s Republic of China and Taiwan and releasing the amounts secured by way of the provisional duties imposed
Date: 2008-03-17
Institutions: European Commission
Subjects: China, Taiwan, anti-dumping duty, anti-dumping legislation, chemical alcohol, import, originating product

L 75/66

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Official Journal of the European Union

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 17 March 2008

terminating the anti-dumping proceeding concerning imports of polyvinyl alcohol originating in the
People’s Republic of China and Taiwan and releasing the amounts secured by way of the
provisional duties imposed

(2008/227/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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,

After consulting the Advisory Committee,

Whereas:

A. PROVISIONAL MEASURES

(1)

On 19 December 2006, the Commission published a
notice (2)
initiating an anti-dumping proceeding on
imports
alcohol
into the Community of polyvinyl
(PVA) originating in the People’s Republic of China
the
and Taiwan. On 17 September 2007,
(PRC)
Commission, by Regulation (EC) No 1069/2007 (3) (the
provisional Regulation)
imposed a provisional anti-
dumping duty on PVA originating in the PRC. With
regard to Taiwan, no provisional measures were imposed.

(2)

As set out in recital 13 of the provisional Regulation, the
investigation of dumping and injury covered the period
from 1 October 2005 to 30 September 2006 (IP). With

respect to the trends relevant for the injury assessment,
the Commission analysed data covering the period from
1 January 2003 to the end of the IP (period considered).

(3)

(4)

(5)

B. SUBSEQUENT PROCEDURE

Following the decision to impose provisional anti-
dumping duties on imports of PVA originating in the
to impose such measures on imports
PRC and not
submitted
interested parties
from Taiwan,
comments in writing. The parties who so requested
were also granted the opportunity to be heard. The
Commission continued to seek and verify all information
it deemed necessary for its definitive findings.

several

The Commission intensified the investigation with regard
to Community interest aspects and exceptionally allowed
users pertaining to the paper industry, an important users
sector which had not cooperated so far, to file a users’
questionnaire reply.

the essential

All parties were informed of
facts and
considerations on the basis of which it was intended to
terminate the proceeding concerning imports of PVA
originating in the PRC and Taiwan and to release the
amounts secured by way of the provisional duty. They
were also granted a period within which they could make
representations subsequent to this disclosure.

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

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

(6)

(2) OJ C 311, 19.12.2006, p. 47.
(3) OJ L 243, 18.9.2007, p. 23.

The oral and written comments
submitted by the
interested parties were considered and, where appro-
priate, the findings have been modified accordingly.

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(7)

(8)

(9)

(10)

C. PRODUCT CONCERNED AND LIKE PRODUCT

its

for

the

inter alia,

arguments

The same Community user as referred to under recital 16
of the provisional Regulation reiterated and elaborated
further
exclusion from the
product scope of a certain grade (the contested grade)
which it called ‘low ash NMWD PVA’ and which it
purchased,
from the PRC. This user alleged
(i)
the Commission had not given sufficient
that
reasons for considering that the contested grade shared
its basic physical and technical characteristics with the
other grades falling within the product definition and it
further insisted (ii) that this grade had very specific end-
uses. Moreover, it submitted (iii) that the contested grade,
according to this user, was a co-polymer and hence
would not fall under the product scope.

Before going into the detail of this users claims, it is first
to be noted that the ash content in PVA is an impurity;
the lower the ash level, the purer the PVA is. Secondly,
the notion of ‘low ash PVA’
is subjective. There is no
generally agreed standard for it, which means that each
producer has its own ceiling for establishing whether a
PVA is low ash or not. It was found that in practice, this
amounts
the
producers subject
to the investigation the ceiling for
low ash PVA could vary from a maximum ash content
of 0,09 % to 0,5 %. The user concerned would not be
amongst the most restrictive,
its ash ceiling would
probably be considered by other interested parties as
rather high.

differences:

significant

amongst

i.e.

to

the

concerns

As
mentioned under recital 7,
considered and can be summarised as follows.

raised by this party and
they have been seriously

issues

(i) The contested grade would have different basic

physical and technical characteristics

It is to be recalled that the basic physical and technical
the product concerned were provi-
characteristics of
sionally defined in recital 14 of the provisional Regu-
lation. The product concerned is therein defined as a
specific kind of resin with certain technical parameters.
The parameters mentioned in this product definition and
used to distinguish between product concerned and other
grades of PVA refer to viscosity (3 mPas -61 mPas,
measured in 4 % solution) and hydrolysis (84,0 mol %
-99,9 mol %).

(11) All grades

falling under

the product definition are
sometimes referred to as standard grades, which means
they can all be produced on a standard PVA
that
production line and the production costs of
these
grades are similar. The opposite is true for the grades
which fall under the same CN-code but outside the
they cannot be produced on a
product definition:

require

a different
standard PVA production line,
production technology and additional equipment, and
the production cost can therefore be very different. The
grades not covered by the product definition have also
very different properties when compared to those
covered by the product definition. As concerns the
degree of viscosity and hydrolysis: (i) the low viscosity
grades are low molecular weight PVA which are difficult
to handle, inter alia, resulting in a low production yield,
whereas (ii) the high viscosity grades, which are also
difficult to handle, are used for high-end glossy paper
coatings, a very special
type of application where
unwanted cracks which are usually formed have to be
avoided;
(iii) high degree hydrolysis grades are also
mainly used for that application and (iv) PVA grades
with a low degree of hydrolysis are not soluble in
form unstable solutions with water. Such
water or
the production of
products are essentially used for
such
suspension PVC and at elevated temperatures
products will fall out of solution.

The user submitted that to produce the PVB resin it
would need for producing its PVB-film, six characteristics
of the PVA were of absolute importance. The combi-
nation of
the parameters for these six characteristics
would make the contested grade unique as compared
to all other PVA grades on the market. Whilst
analysing this claim, it was indeed found that for some
applications the technical specifications can be more
stringent than for others. At the same time, however, it
fact all grades,
was established that as a matter of
including the
the
product scope and sometimes referred to as ‘standard
grades’, have a unique combination of characteristics.
Depending on the desired application, one or another
grade would be chosen. This is valid not only for the
application of the user concerned, but for other appli-
cations too. Consequently, the claim had to be dismissed.

commodity grades

falling under

(ii) The contested grade would have very specific end-

uses

The user concerned also contested the Commission’s
the PVA user market and specifically
appreciation of
alleged that
the PVB user market would be very
diverse. In this respect, as already indicated in the provi-
sional Regulation, the user used this grade of PVA for the
production of PVB which is the largest application in the
Community, accounting for 25 % to 29 % of PVA
consumption, and also the fastest growing application
because of the strong increase in demand for PVB-film.
Further down-stream, the investigation has also shown
that close to 90 % of
the PVB produced in the
Community is consequently used for the production of
PVB-film, which is also the eventual application by the
user concerned (but it is not the only PVB-film producer
in the Community).
as
is
mentioned in recital 17 of the provisional Regulation,
that the specific use of this interested party is one of
the main applications which,
its market
importance, cannot be characterised as not standard.

in view of

confirmed,

therefore

It

(12)

(13)

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(14) As concerns its alleged specific use, the user concerned
also argued that
the contested grade could not be
substituted by other models which would illustrate this
specific end-use. In this respect, it was firstly established
this user was not buying exclusively from the
that
Chinese producer concerned and already had several
alternative sources. In fact, during the IP it sourced less
than 5 % of its purchases of PVA for which it claimed
exclusion from the producer in the PRC. The remaining
purchased volumes were sourced from three other
producers in different countries. Moreover, it was estab-
lished that although most of the other grades sold on the
Community market indeed could indeed not be used as
an alternative to the contested grade, the contested grade
itself could be used in other applications, too, and it was
made available on the Community market at prices
similar to those of other grades imported from the
PRC.
the
contested grade could not be substituted had to be
dismissed.

the argument

In view of

the above,

that

(15)

(16)

(iii) The contested grade would be a co-polymer, not a

homopolymer

Following the imposition of provisional measures, the
user claimed that low ash PVA would be a co-polymer
and not a homopolymer. This claim was based on the
fact that it would contain two building blocks. This issue
was investigated and it was found that PVA is the result
of an initial hompolymeric polymerisation. However, the
subsequent hydrolysis process
incomplete
(between 84,0 mol % and 99,9 mol %) and to that
extent,
it could also be argued that PVA contains two
building blocks and can be referred to as co-polymer.

is always

to clarify the product

In order to avoid any confusion, it was therefore deemed
appropriate
scope definition
determined in the provisional Regulation. Therefore, the
product concerned is definitively defined as certain co-
polymeric polyvinyl alcohols (PVA) based on a homopo-
lymeric polymerisation with a viscosity (measured in 4 %
solution) of 3 mPas or more but not exceeding 61 mPas
and a degree of hydrolysis of 84,0 mol % or more but
not exceeding 99,9 mol % originating in the People’s
Republic of China and Taiwan and normally declared
within CN code ex 3905 30 00.

D. DUMPING

1. Taiwan

(17) With regard to Taiwan, no provisional measures were
imposed, because, as stated in recitals 29 and 30 of
the provisional Regulation, no dumping was provi-
sionally
the product
concerned originating in Taiwan.

found regarding

imports of

(18) As mentioned in recital 30 of the provisional Regulation,
the sole cooperating Taiwanese company, Chang Chun

is

the only exporting
(CCP)
Petrochemical Co. Ltd.
producer of the product concerned in Taiwan, and it
accounted for 100 % of the Taiwanese exports to the
EC during the investigation period as
reported by
Eurostat.

(19)

Both Community producers, Kuraray Europe GmbH and
Celanese Chemicals Ibérica S.L. claimed that CCP was in
fact dumping during
and requested the
the
Commission to reconsider its findings with regard to
the dumping determination for CCP.

IP,

(20)

(21)

1.1. Raw material costs

Both Community producers claimed that CCPs cost of
production was much higher than what was found by
the Commission, because the costs for vinyl acetate
monomer (VAM), which is the main raw material used
in the production of PVA, had been underestimated.
They stressed in this respect that CCPs VAM supplier is
a related company.
its arguments, one
In support of
Community producer submitted a study on CCPs PVA
business carried out by a consultancy firm, as well as
publications on international VAM prices.

The information submitted was examined. A comparison
between the VAM prices listed in the abovementioned
publications and the prices verified in the course of the
proceeding both in Asia and in Europe clearly shows that
the prices published in those publications are overstated.
In addition, the publications themselves state that the
published prices are estimates, that actual prices in the
market may be either higher or lower and that the best
use of the published prices is as indices. Indeed, even
though such prices may be used to monitor trends
over time, they do not appear to represent actual prices.

(22) Moreover, the investigation has shown that the VAM
sales made by the related supplier to CCP were made
at prices in line with those charged to this supplier’s
unrelated customers and that the prices paid for VAM
by CCP were consistent with those paid by other
producers in Asia, notably in Japan.

(23)

In addition,
the VAM costs contained in the study
mentioned above were based on a higher VAM
consumption rate than the actual CCP one. Considering
that VAM consumption rate depends on the mix of fully
and partially hydrolysed PVA, CCPs
actual VAM
consumption rate was found to be consistent with that
of other producers, as verified, both in Asia and in the
Community, taking into account the respective product
mixes.

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(24)

it was
For the reasons detailed in recitals 20 to 23,
therefore concluded that CCP’s VAM costs had not
been underestimated and the claims concerning this
issue were therefore rejected.

priate for the constructed normal values. The claim was
therefore rejected.

1.2. Other costs

(25) On the basis of the costs contained in the abovemen-
the two Community producers
tioned study, one of
claimed that
in addition to the VAM, other cost
elements of CCP’s cost of production of PVA, such as
those related to utilities, other manufacturing overheads
and SG&A, had been underestimated. However, no
specific evidence was submitted to support
the cost
estimates made in the study.

(26)

The actual data verified for CCP on the spot was re-
examined and it was confirmed that the correct costs
have been used in the dumping calculations. The claim
was therefore rejected.

1.3. Calculation of normal value

(27) One Community producer claimed that

for CCP,

the
normal value should have been constructed for all
product
types, because there is a particular market
situation on the Taiwanese PVA market due to artificially
low prices particularly as compared to price ranges
the
published for Asia, and also because most of
Taiwanese
to related
customers during the IP.

sales were made

domestic

(28)

There is in fact no evidence on the basis of which
Taiwanese domestic sales prices could be considered as
artificially low. The published PVA prices are only price
ranges of a very general nature given for Asia (excluding
China) as a whole, without specifying the actual grades or
product types in question, and therefore cannot be used
in any price comparison for Taiwan. On this basis,
Taiwanese domestic sales prices cannot be considered
as artificially low. As concerns the alleged absence of
sufficient domestic sales to independent customers, it is
confirmed that sales to independent customers were
found to be made in sufficient quantities to determine
normal value.

(31)

(32)

comments. No

the above
The interested parties were informed of
findings and given a period within which they could
make
information was
received from the Community producers or any other
the Commissions
interested party which would alter
provisional dumping determination for Taiwan.

additional

In view of the above, it is confirmed that the dumping
margin determined for Taiwan is less than 2 %, expressed
as a percentage of the export price, as mentioned in
recital 29 of the provisional Regulation. Therefore,
in
accordance with Article 9(3) of
the basic Regulation,
the present proceeding should be terminated in respect
of
the product concerned originating in
Taiwan.

imports of

2. People’s Republic of China (PRC)

2.1. Market Economy Treatment and Individual Treatment

(33)

In the absence of comments in respect of the MET and IT
determinations, recitals 31 to 39 of the provisional Regu-
lation are hereby confirmed.

(34)

(35)

2.2. Analogue country

Both Community producers, Kuraray Europe GmbH and
Celanese Chemicals Ibérica S.L.
Japan
should be selected as analogue country for the PRC
instead of Taiwan.

reiterated that

Japan would be a more suitable
They claimed that
analogue country than Taiwan because competition in
the Japanese PVA market is far more vigorous than in
(i) the Taiwanese market is
the Taiwanese market as:
dominated by the
sole Taiwanese producer, CCP,
whereas in Japan there are four producers; (ii) imports
of PVA falling under the scope of the investigation into
Taiwan are limited, and (iii) the domestic demand for the
like product in Taiwan is low.

(29)

The same Community producer also claimed that,
because of an alleged particular market situation due to
artificially low PVA prices on the Taiwanese market, the
profit used in the constructed normal values for CCP
should not be based on the chapeau of Article 2(6) of
the basic Regulation.

(36)

Regarding the alleged market dominance of CCP in
Taiwan, it has to be recalled that the level of competition
is also influenced by imports and in this respect, as
already stated in recital 46 of the provisional Regulation,
Taiwan has in fact a higher proportion of imports in
terms of domestic consumption (15 %) than Japan (3 %).

(30)

For the reasons mentioned in recital 28, there is no
reason why the profit based on the
chapeau of
Article 2(6) of the basic Regulation would not be appro-

(37) As for the claim that imports of PVA would mainly refer
to products falling outside the product scope of
the
investigation,
supported by
sufficient evidence and thus could not be accepted.

this allegation was not

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(38) As concerns the allegedly limited demand for the like
product in Taiwan,
it has to be emphasised that the
Taiwanese domestic market of PVA exceeds 15 000
tonnes, most of which being the like product.
In
addition, although one Community producer claimed
that there is actually limited demand because most of
CCP’s sales are made to related customers, the contrary
was confirmed by the investigation. For these reasons,
the
like
product was dismissed.

claim regarding limited demand for

the

(39)

For the reasons set out in recitals 36 to 38, the claim
regarding insufficient competition on the Taiwanese
market was rejected.

(40) One Community producer claimed that both in terms of
production and sales, the Japanese PVA market is far
more representative of
than Taiwan.
However, even if Taiwanese production and domestic
sales are lower than production and domestic sales in
Japan, they are still sufficiently substantial to make a
comparison to Chinese PVA and its exports to the EC
appropriate.

the PRC market

suitable analogue

like in the PRC. However,

The same Community producer also stated that Japan
would be a more
country than
Taiwan as in Japan both integrated and non-integrated
PVA producers exist,
it is
important to note that, whilst it is true that in the PRC
both types of producers exist, the Taiwanese producer
and the sole cooperating and verified Japanese producer
have
processes.
Therefore, this aspect cannot be relevant in preferring
Japan to Taiwan.

PVA production

integrated

both

The same Community producer also claimed that the
product mix and the applications of PVA on the
Japanese market are more comparable to those in the
PRC. In this respect,
it is confirmed that the product
mix and the applications on the Taiwanese market are
such as to guarantee a proper comparability between the
there is no
Taiwanese and the Chinese PVA, whilst
evidence that
Japanese PVA would have ensured a
better comparability.

(41)

(42)

(43)

Finally, the level of cooperation in the selected country is
an important element for establishing a reliable normal
value. In Japan only one of the four producers of the like
product cooperated in the investigation, whereas
in
the
the necessary data was available for
Taiwan all
whole country, given that Taiwan was subject to the
investigation. Indeed the Taiwanese company represented
a much wider market share on its domestic market than
the sole cooperating Japanese producer, thereby allowing
better assessment of the normal value.

(51)

(44)

In view of the reasons detailed in recitals 36 to 43, the
claim of both Community producers that Japan is the

most appropriate analogue country for the PRC was
rejected and recitals 40 to 46 of the provisional Regu-
lation are hereby confirmed.

2.3. Normal value

(45) One Community producer claimed that the normal value
of
the analogue country, Taiwan, should have been
constructed for all product types, and the profit used
in the constructed normal value should not have been
based on the chapeau of Article 2(6) of the basic Regu-
lation, because there is a particular market situation in
Taiwan due to artificially low prices.

(46) However, for the reasons detailed in recitals 28 to 30,
these claims were rejected. In the light of this, recital 47
of the provisional Regulation is hereby confirmed.

2.4. Export price

(47)

In the absence of comments in respect of the export
price, recitals 48 to 50 of the provisional Regulation
are hereby confirmed.

2.5. Comparison

(48)

(49)

absence of

In the
the
comments
comparison, recital 51 of the provisional Regulation is
hereby confirmed.

in respect of

2.6. Dumping margin

In the absence of comments in respect of the dumping
margin, recitals 52 and 53 of the provisional Regulation,
according to which the country-wide dumping margin
for the PRC is 10 %, are hereby confirmed.

E. INJURY

1. Community production and Community industry

(50)

In the absence of any new and substantiated information
or argument in this respect, recitals 54 to 60 of the
provisional Regulation are hereby confirmed.

2. Community consumption

and

cross-checking

it with
it appeared that

information available from
In reviewing the statistical
information
Eurostat
the
available through other sources,
imports from the USA as set out
in the provisional
Regulation were understated, notably as concerns 2003
(see recital 80). It was therefore decided to replace these
data by data from the USA export database. After final
disclosure it was further established that
the figures
concerning Chinese PVA imports reported by Eurostat
were erroneous and needed to be corrected (see recital
56).

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(52)

The consumption figures were accordingly revised as follows:

Consumption in tonnes

143 515

154 263

166 703

166 755

Index (2003 = 100)

100

107

116

116

2003

2004

2005

IP

(53)

This shows that the demand for the product concerned during the period considered increased by
16 %. The other conclusions, as summarised in recital 64 of the provisional Regulation, remain valid.

(54)

In the absence of any other new and substantiated information or argument in this respect, recital 61
to 64 of the provisional Regulation are hereby confirmed, with the exception of the changes made to
recital 61 and recital 64 as set out above.

3. Imports from the countries concerned

(55) As it is confirmed that the dumping margin for Taiwan is de minimis, imports originating in Taiwan

are definitely excluded from the injury assessment.

(56) After final disclosure, certain interested parties expressed serious doubts as concerns the reliability of
the Eurostat figures on PVA imports from the PRC in 2003. The matter was investigated and it was
found that there had been a significant misreporting concerning those imports. Consequently, the
volumes of PVA imports from the PRC were corrected as follows:

Imports

2003

2004

2005

PRC tonnes

Index (2003 = 100)

16 197

100

14 710

91

21 561

133

IP

21 513

133

(57)

Instead of a decrease of Chinese imports during the period considered, as established at the provi-
sional stage based on the erroneous 2003 data, imports from the PRC increased by 33 % over the
period considered, whereas they dropped by 9 % in 2004 as compared to 2003.

(58)

In view of this and the revised Community consumption data (see recital 51), the market share of the
imports from the PRC is accordingly modified over the period considered as follows:

Market share PRC

2003

2004

2005

Community market

Index (2003 = 100)

11,3 %

100

9,5 %

84

12,9 %

115

IP

12,9 %

114

(59)

The market share held by imports from the PRC increased by 1,6 percentage points during the period
considered. During the IP, Chinese imports accounted for 12,9 % of the whole Community market.

(60)

In view of the revised 2003 import data, the import prices originating from the PRC as described in
recital 68 of the provisional Regulation have been modified accordingly. The average price of the
imports thus decreased by 3 %.

Unit prices

2003

2004

2005

PRC (EUR/tonne)

Index (2003 = 100)

1 162

100

1 115

96

1 164

100

IP

1 132

97

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(61)

(62)

to definitive disclosure,

the complainant
Subsequent
submitted that
the Commission should not have
excluded any matching models from the undercutting
calculation. It alleged that by doing so, the Community
prices of imports from the PRC would have been drama-
tically overstated. With regard to this matter, in recital 70
of the provisional Regulation it is indeed stipulated that a
limited number of models (PCNs) was excluded from the
undercutting comparison as it was considered that the
comparison per model had to be meaningful and fair
and,
therefore, no comparison between a standard
grade and a special grade falling within the product defi-
nition should be allowed.

speciality plant through a batch manufacturing process.
It was also specifically reported by the Community
this PVA did not compete
producer concerned that
with standard PVA. Accordingly,
it was concluded by
for these PCNs imported from
the Commission that
there were no
the PRC, which were standard PVA,
matching grades sold by the Community industry.
In
view of the fact that the undercutting calculation could
then still be based on representative volumes (i.e. 54 % of
the imports concerned), it was decided to exclude these
PCNs from the comparison.

The PCNs concerned accounted for 34 % of Chinese
imports during the IP, but
the Community industry
(not
the complainant) produced them in very small
volumes, representing 0,1 % to 0,5 % of its sales of the
like products during the IP. Whereas the imports from
the PRC of PVA within these PCNs concerned a standard
grade PVA, the Community producer of these PCNs had
submitted to the Commission that in its case the PCNs in
question concerned high-end speciality products for use
in niche applications which cannot be substituted by
been
standard
had not
Furthermore,
in its
produced on its standard production line but

PVA.

they

(63) On that basis, and as the submission of the complainant
did not contain any evidence to the contrary,
is
confirmed that the exclusion of these PCNs from the
undercutting calculations is justified and the claim is,
therefore, dismissed.

it

(64)

In the absence of any other new and substantiated infor-
mation or argument in this respect, recitals 65 to 71 of
the provisional Regulation are hereby confirmed, with
the exception of the Chinese import and market share
data, which issues have been addressed above.

4. Situation of the Community industry

Market shares in the Community

(65) Given the revised figures for Community consumption (see recital 51), the market share of the

Community industry is accordingly modified over the period considered as follows:

Market share Community Industry

2003

2004

2005

Index (2003 = 100)

100

101

96

IP

103

(66) As concluded in recital 76 of the provisional Regulation,
the Community industry has, in terms of sales volumes,
benefited
the
Community market.

from the

increasing

demand

on

5. Conclusion on injury

(67)

claimed

that most

anti-dumping measures,
injury

Subsequent to the disclosure of the essential facts and
considerations on the basis of which it was decided to
several
impose provisional
indicators
parties
had
there would be no
therefore
developed positively,
material injury. It was even submitted by one interested
the
party that
Community industry had suffered material
injury on
the basis of the decline in Community industry sales
prices only.

the Commission had concluded that

(68)

In this respect, it should be recalled that, as indicated in
recital 90 of the provisional Regulation, indeed a number

of
indicators developed positively during the period
considered, due to the strong and increasing demand
on the Community market. However,
the price
depression on the Community market coupled with the
worldwide strong increase of main raw material costs has
lead to a negative development of all financial indicators
such as profitability, return on investment and cash flow.
This is explained in detail in recitals 84 and 85 of the
provisional Regulation. Although, as stated in Article 3(5)
of the basic Regulation, not one or more of the relevant
economic factors which are evaluated in this respect
necessarily give decisive guidance, it is obvious that the
financial indicators are amongst the key indicators. The
argument, therefore, has to be dismissed.

(69)

In the absence of any further new and substantiated
information or
the
argument on the
Community industry, recitals 72 to 92 of the provisional
Regulation are hereby confirmed, with the exception of
recitals 75 and 76 which have been addressed above.

situation of

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F. CAUSATION

1. Effects of the dumped imports

(70)

interested parties pointed at

Several
the provisional
finding that Chinese imports dropped strongly between
2003 and 2004. They claimed that in view of the fact
that
the
Community industry deteriorated dramatically by 62 %,
the price depression could not have been caused by the
Chinese imports.

the profitability of

same period,

in the

(71)

In this respect it is to be recalled that the investigation
had established that imports from the PRC undercut the
Community industry prices by 3,3 % during the IP and

that imports from the PRC have, throughout the period
considered, been declared at the Community frontier at
prices lower than those obtained by the Community
industry. The difference between Eurostat import prices
from the PRC and Community industry sales prices
appears to be more significant in 2003 than during the
IP. However, on the basis of such analysis no conclusion
can be drawn as regards the undercutting in the years
preceding the IP; an accurate and reliable undercutting
margin can only be calculated for the IP as it should be
made on the basis of a model-by-model comparison and
whilst making the appropriate adjustment
for (post-)
importation costs and differences in level of trade. Such
data were only available for the IP. No conclusion can
therefore be drawn as to whether imports from the PRC
have
prices
throughout the period considered.

Community

undercut

industry

the

(72)

The investigation had further established that there was a significant price depression on the market.
This price depression was injurious in view of the strong increase in the main raw material costs
throughout the same period, as elaborated in recitals 78 and 79 of the provisional Regulation. In
view of the comments received and mentioned in recital 70, the development of raw material prices
during the period considered was analysed on a year-by-year basis. As mentioned in recital 78 of the
provisional Regulation, vinyl acetate monomer (VAM) is PVAs key raw material. It accounts for
approximately 65 % of the manufacturing cost of PVA. The table below displays the cost of VAM
per tonne of PVA during the period considered:

Community industry

2003

2004

2005

IP

Cost of VAM per tonne PVA

Index

100

107

119

130

(73)

(74)

The analysis showed that in 2004, the increase in raw
material costs was moderate as compared to the increase
of these costs in 2005 and the IP. In view of this devel-
opment of raw material prices, which is best illustrated
by the development of VAM-costs above and which did
not closely correspond with the trend in profitability, it
can be concluded that the sharp decrease in profitability
during 2004 was caused more by the 7 % decrease in
Community industrys sales prices, as indicated in recital
79 of the provisional Regulation, than by the increase in
raw material costs.

(75)

Following the above, the market shares in 2004 were
analysed further in absolute terms as well as compared
to 2003 to establish whether the dumped imports, taken
in isolation, have had a material impact on the injury. It
established that during 2004 the Community
was
industry increased its market share by 1 %. At
the
same time, Chinese imports lost 16 % of their market
share. The result was that during 2004,
the market
share of the Community industry accounted for more
In these
than fourfold the market share of the PRC.
circumstances,
to
attribute the price depression in the pivotal year 2004

indeed considered difficult

is

it

to the imports from the PRC, as its quantities were rela-
tively low and strongly declining.

It should be clarified that

Following definitive disclosure, the Community industry
argued that even with a low market share the dumped
imports managed to cause severe disruption on the
It claimed
market, due to the nature of the business.
that the Commission would have argued that PVA is a
commodity, and that the lowest price quoted on the
market determines to a large extent the market price,
which other producers have to adapt to,
if they wish
the
to keep their orders.
Commission had, in the definitive disclosure document,
only cited a claim of the complainant without endorsing
it. The complainant
this alleged
influence of imports from the PRC on the Community
industry sales prices would be demonstrated by the
decreasing trend in the Community industry’s
sales
prices over the period considered, while prices of the
main raw material, VAM,
soared. The Community
it was not in a position to
industry maintained that
to its
pass on the increase in raw material prices
customers due to the strong price pressure of
the
dumped imports which would have led to a pronounced
decrease in profitability, return on investments and cash
flow.

further argued that

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Official Journal of the European Union

18.3.2008

the IP.

in particular

(76) Nevertheless, when looking at the development in more
detail,
it appears that the considerable deterioration of
the Community industry’s financial situation occurred
mainly as from 2004 until
In 2003, when
imports from the PRC had a market share of 11,3 %
and sales prices did not vary much from the subsequent
years, the Community industry was performing satisfac-
in terms of profitability. This
torily,
evaluation is
that even the
supported by the fact
Community industry had characterised (2002 and)
2003 as a year ‘before the major import penetration
by the dumped imports on the Community market’.
This was corroborated by the findings of the investi-
gation and it was thus considered in recital 131 of the
provisional Regulation, that 2003 was indeed a year in
which there was a normal competitive situation on the
Community market. This had not been contested by any
of the interested parties and it would suggest that during
2003, trade distortions, if any, were limited. In 2004, on
the contrary, when imports from the PRC decreased
while
the
Community industrys financial situation suddenly dete-
riorated dramatically.

sales price

remained

stable,

fairly

its

(77)

Following definitive disclosure, the Community industry
claimed that the Commission would erroneously require
the dumped imports to be the principal cause of injury.
In this respect, it is noted that the Commission did not
require the dumped imports to be the principle cause of
the basic Regulation
injury.
(…) are
stipulates
responsible for an impact on the Community industry
(…) and that this impact exists to a degree which enables
it to be classified as material (emphasis added).’

‘volumes and/or price levels

Indeed, Article 3(6) of

that

(78) A further analysis of the facts as established during the
investigation has shown that the dumped imports, taken
in isolation, have had an impact on the injurious
situation of
the Community industry, but given its
overall limited market shares in relation to the increasing
market shares of the Community industry and a missing
clear coincidence in time between the dumped imports
and the most
the Community
injurious situation of
industry, this impact is not considered to be material.

(79)

(80)

above
cannot be
Based on the
concluded that
the dumped imports have had an
impact on the injury suffered by the Community
industry that can be classified as material.

considerations,

it

2. Effects of other factors

Subsequent to the imposition of provisional measures,
information was obtained which pointed at the incom-
pleteness of the Eurostat data as regards imports from
the USA. The volumes reported appeared to be too low if
compared to export data from the USA export database
but also to other sources. The data concerning these
imports therefore had to be revised and it was found
most appropriate to replace them by the data acquired
from the USA export database, whereby the values,
adjusted to CIF
converted into Euro, were duly
Community frontier level. The impact of
the revised
import volumes from the PRC in 2003 on the calculated
Community consumption also affected the market shares
of other countries in that year. The tables in recital 97 of
the provisional Regulation have therefore been amended
as follows:

Imports originating in other third countries (quantity)

Import (tonnes)

2003

2004

2005

IP

USA

Index (2003 = 100)

Japan

Index (2003 = 100)

Taiwan (ranges)

Index (2003 = 100)

19 804

100

13 682

100

26 663

135

11 753

86

25 771

130

12 694

93

26 298

133

14 151

103

11 000-14 000

13 000-16 500

10 000-13 000

9 000-12 000

100

118

88

83

Imports originating in other third countries (average price)

Average price (EUR)

2003

2004

2005

IP

USA

Index (2003 = 100)

Japan

Index (2003 = 100)

Taiwan

Index (2003 = 100)

1 308

100

1 916

100

1 212

100

1 335

102

1 532

80

1 207

100

1 446

111

1 846

96

1 308

108

1 416

108

1 934

101

1 302

108

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(81)

(82)

Market shares

Market share (%)

2003

2004

2005

IP

USA

Japan

Taiwan (index)

13,8

9,5

100

17,3

7,6

109

15,5

7,6

76

15,8

8,5

71

Indeed, during the period considered,

Compared to the provisional Regulation,
the main
difference consists in the quantities of USA imports
and the trend that can be observed as regards those
imports.
there
was a slight increase of imports of PVA from the USA
only, i.e. an increase by 2 percentage points in terms of
market share whereas it was erroneously concluded in
they had doubled
the provisional Regulation that
during that period. Furthermore,
the CIF Community
frontier prices of these imports appear to be generally
higher than provisionally concluded, with prices that
were 4,3 % higher during the IP. The other conclusions
with regard to these imports, as summarised in recital 98
of the provisional Regulation, remain valid.

which would undercut the Community sales price level
during the IP. Moreover, around 25 % of the Japanese
imports during the IP could be verified and they
concerned PVA grades falling under the product scope.
These sales were made to related parties, i.e. at transfer
prices, and it had been found that the resale prices of
these purchases to the first independent customers in the
Community were on average 8 to 10 % above the prices
that the Community industry could obtain. It was conse-
quently concluded and it is maintained that there are no
indications that Japanese imports of PVA, during the IP,
have undercut
the Community industry prices and,
therefore, they are not considered to have contributed
to the injury suffered by the Community industry.

Referring to recitals 97 and 99 of the provisional Regu-
lation, several interested parties expressed serious doubts
as to the reliability of the Eurostat prices on Japanese
imports, as the average unit prices of
these imports
were significantly higher than the unit prices of PVA
from other sources. One interested party claimed that
the high average sales price could stem from an
erroneous inclusion of other more expensive products,
such as PVB.
to
underline that these data had been investigated in detail
that analysis it had been
and that on the basis of
concluded, as indicated in recital 99 of the provisional
Regulation,
could not have
contributed to the negative price trend which led to
the serious deterioration of the Community industry’s
financial situation. For the sake of completeness and
clarity, a summary of this analysis follows.

important

Japanese

imports

In this

respect,

that

is

it

(84)

It was also questioned by several interested parties how
Japanese imports managed to maintain a strong market
share with such high prices, if there was a fierce price
competition on the Community market. In this respect, it
should first be noted, as mentioned in recital 83 above,
that the inclusion of other and more expensive grades of
PVA certainly has inflated the Eurostat average values of
Japanese import prices. Based on verified data pertaining
to around 25 % of Japanese imports, average prices of
these imports to the first independent customer in the
Community appear rather to be 8 to 10 % above the
Community industry prices. This is not the result of a
precise comparison between identical grades; it is rather
the likely and approximate price difference between the
average sales prices of a part of Japanese imports and the
average sales price obtained by the Community industry.
On that basis, the result of the analysis of the Japanese
import prices does not contradict the conclusion that
market
indeed
depressed, and the argument is dismissed.

the Community were

prices

in

(83) A further examination of the Eurostat data concerning
imports from Japan confirmed that it did not include any
products other than PVA and that, hence, the data were
not inflated by more expensive products. Further, as was
the Japanese PVA
already indicated in the complaint,
imports
included certain limited quantities of PVA
other than the like product, with probably significantly
higher unit prices. In the average value computed for
Japanese imports, based on the statistical data, the price
these other PVA-grades could not be
influence of
neutralised as these data do not distinguish the like
product from other PVA-grades. However, taking into
account
such imports,
based on the data in the complaint, and in view of the
average price computed for all
Japanese PVA imports
during the IP, it had been established that it would be
very unlikely that the exclusion of the PVA grades not
falling under the product definition would result in an
average CIF Community frontier price of the like product,

the approximate volumes of

(85) One interested party claimed that

the volumes of
Taiwanese imports had increased from 2003 to 2006,
contrary to the Commission’s findings of a market share
decrease, and that the average prices of these imports
increased less than what
the Commission had found.
This claim was based on an analysis of Eurostat data.
In this respect, it should be noted that, as indicated in
recital 100 of
the actual
figures of the sole Taiwanese producer have been used
as it fully cooperated in the investigation. These verified
data were considered more reliable than Eurostat data,
especially as this producer also sold,
the
period considered, significant quantities of PVA which
were covered by CN code ex 3905 30 00 but did not
fall under the product definition. The claim of
this
interested party, therefore, had to be dismissed.

the provisional Regulation,

throughout

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Official Journal of the European Union

18.3.2008

(86) Another

customer,

interested party claimed,

in view of
analysis of USA import prices

the
Commission’s
that
Taiwanese imports would have contributed to the price
depression on the Community market. It alleged that for
the purpose of computing average prices to first inde-
pendent
adjusted
Eurostat’s USA import prices, which were already above
Taiwanese prices, upwards and so adjusted, these prices
were at the same general
level as Community industry
prices. Therefore, Taiwanese prices, which would not
need any
adjustment, would be undercutting the
Community industry prices and contribute to the injury
suffered by the Community industry.

the Commission had

(87)

(88)

In fact,

This claim had to be rejected.
the prices of
Taiwanese imports in recitals 97 and 100 of the provi-
sional Regulation are the prices at cif Community
frontier level. For the purpose of the undercutting calcu-
lations, a number of adjustments have been made to
those prices (import duty, post importation costs, level
of trade). In this case, the level of trade adjustment was
significant as virtually all sales were done via traders/dis-
tributors in the Community. The subsequent under-
cutting calculations could then be done at PCN-level,
thus resulting in very precise figures which did indeed
not show undercutting.

(91)

Several interested parties claimed that the drop in profit-
ability was caused by the Community industry itself.
They claimed that because of
the creation of extra
production capacity in 2004, the Community industry
found itself confronted with large additional quantities
of produced PVA which it had to sell. It was argued
by these parties
itself would
therefore have engaged in an aggressive policy of under-
cutting all other PVA suppliers with a view to maxi-
mising its sales volumes and excluding other competitors
from the market. According to these parties, this would
explain the decline in PVA prices during the period
considered. They considered that the Chinese producers
were price followers rather than price setters.

the complainant

that

and that the Community industry further increased its
sales volumes by 10 %.

(90) At the same time, however,

a

that

PVA plant

increased significantly as

it was established by the
investigation
produce
should
continuously in order to maximise efficiency. This was
also the case for the Community industry. The investi-
gation showed that due to the expansion of capacity
which took place from 2004 to 2006, the production
volumes
from 2004. The
Community industry,
following definitive disclosure,
the additional PVA production line was
argued that
only available as of 2005 and that, thus, there was no
additional capacity in 2004. However, the investigation
has shown that during 2004 the production capacity was
7 % higher as compared to 2003. At the same time, the
Community industry decreased its sales prices by 7 %,
and in 2005, when the production capacity had
the capacity during 2003, prices
reached 129 % of
were still 5 % below the 2003 level,
in spite of
strongly increasing raw material costs as indicated in
the
recital 72 (+ 19 % for VAM).
Community industry had increased its sales volumes to
independent customers by 12 % and it further increased
those sales by another 10 percentage points in 2005. On
there might be a relation
this basis,
between the sales prices of
the Community industry
and the quantity of PVA produced.

In the meantime,

it appears that

costs

the investment

Two interested parties argued that
in
production capacity had caused the negative development
of the key financial
indicators, as the cost of it would
have weighed heavily on the Community industry’s prof-
itability. In this respect, the investigation has established,
as stated in recital 103 of the provisional Regulation, that
involved with the production capacity
the
expansion could be identified and that
they did not
significantly influence the dramatically negative trend
observed in the development of the financial position
of the Community industry. The claim that these costs
had caused the strong deterioration of the Community
industrys most important financial indicators, therefore,
has to be dismissed.

(89) With regard to this argument,

the

that

the investigation has
investments made by the
indeed shown that
Community industry to increase production capacity
have enabled the Community industry to sell significant
additional quantities on the Community market. This fact
demonstrates, on the one hand,
the decision to
make this investment had been a sound decision in
terms of expected market growth. The consumption of
PVA on the Community market had increased strongly
during the period considered, as explained in recitals 51
to 53, and this had led to increasing sales overall.
Furthermore, an analysis of post-IP data (July 2006
until
Community
consumption and sales based on Eurostat data and
figures provided by parties subject to the investigation
has confirmed that consumption increased significantly

concerning

September

2007)

(92) One interested party claimed that pricing of the sales for
captive use would have negatively influenced the profit-
ability figures of the complainant. In this respect it is to
be noted that the sales of PVA to related parties have
been verified in depth. Firstly, these sales were isolated
from the sales to unrelated parties. They are therefore not
included in the financial
indicators provided in recitals
84 and 85 of the provisional Regulation, as specifically
mentioned in recital 84. Secondly, the verification of the
sales for captive use showed that the pricing of these
sales, which represented less
the
Community industry total sales during the IP, did not
have a negative impact on the reported result on the
Community industry’s PVA sales to unrelated parties.
The claim was therefore dismissed.

than 20 % of

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L 75/77

(93) Another interested party claimed that that the allegedly
depressed construction market in Germany during the
first years of the period considered would have caused
the negative development of the key financial indicators
of the Community industry. However, no evidence to
demonstrate this was submitted and the statistical data
clearly show a trend of increasing consumption for PVA
and
increasing
consumption of PVB. The argument, therefore, had to
be dismissed.

an even more marked

trend of

(94)

(95)

Following definitive disclosure, the Community industry
claimed that by focussing on 2003 and 2004, no
the years 2004 until
sufficient causation analysis of
2006 was performed. In this respect it is firstly to be
noted that 2003 and 2004 are the first two years of the
period considered and as such they can certainly not be
regarded as outdated. Furthermore, as summarised in
recital 91 of the provisional Regulation, the group of
indicators showing injury are the financial
indicators
whilst most of the other indicators show a positive devel-
opment. In such a situation it is only reasonable that the
investigating authority pays more attention to the period
where the financial indicators deteriorated the strongest,
which happened to be 2004 when the Community
industrys profitability decreased by 62 %,
its ROI
decreased by 83 %, and its cash flow decreased by
it is
45 %. Finally, as recitals 70 to 93 demonstrate,
considered that the causation analysis is not limited to
the years 2003 and 2004 and it covers the complete
period considered, i.e. from 2003 to the end of the IP
(September 2006). The claim is, therefore, dismissed.

3. Conclusion on causation

confirmed that

In conclusion, following a further analysis triggered by
the comments received after the imposition of provi-
sional measures,
the
cannot be
it
dumped imports have had a material
impact on the
injury of the Community industry. Given (i) the relatively
limited and only slightly increasing market share of the
dumped imports from the PRC (from 11,3 % to 12,9 %)
and the much more important and slightly increasing
market share of Community industry sales (during the
IP more than threefold the market share of the PRC)
and (ii) the limited, even if not insignificant, undercutting
practiced by imports from the PRC, it can be concluded
that
in a
the low prices on the Community market
context of
increasing raw material prices, which have
strongly contributed to the injury suffered by the
Community industry, can not be attributed to the
dumped imports from the PRC. The causal link within
the meaning of Articles 3(6) and 3(7) of the basic Regu-

lation between the dumped imports from the PRC and
the material injury suffered by the Community industry
could therefore not be sufficiently established.

G. CONCLUSION

(96)

The proceeding should therefore be terminated, as the
dumping margin determined for Taiwan is less than
link
2 % and due to the lack of evidence for a causal
between dumping and injury insofar as imports origi-
nating in the PRC are concerned,

DECIDED AS FOLLOWS:

Article 1

The anti-dumping proceeding concerning imports of
co-
polymeric polyvinyl alcohols (PVA) based on a homopolymeric
polymerisation with a viscosity (measured in 4 % solution) of 3
mPas or more but not exceeding 61 mPas and a degree of
hydrolysis of 84,0 mol % or more but not exceeding 99,9
mol %, falling within CN code ex 3905 30 00 and originating
in the People’s Republic of China and Taiwan,
is hereby
terminated.

Article 2

Amounts secured by way of provisional anti-dumping duties
pursuant to Commission Regulation (EC) No 1069/2007 on
imports of certain polyvinyl alcohols in the form of homo-
polymer resins with a viscosity (measured in 4 % solution) of
3 mPas or more but not exceeding 61 mPas and a degree
of hydrolysis of 84,0 mol % or more but not exceeding
99,9 mol %, falling within CN code ex 3905 30 00 (TARIC
code 3905 30 00 20) and originating in the People’s Republic
of China shall be released.

Article 3

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

Done at Brussels, 17 March 2008.

For the Commission

Peter MANDELSON
Member of the Commission