Proposal for a COUNCIL REGULATION imposing a definitive anti-dumping duty on imports of certain graphite electrode systems originating in India following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009
Date: 2010-11-16
Institutions: European Commission
Subjects: India, anti-dumping duty, anti-dumping legislation, dumping, import, third country

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EUROPEAN COMMISSION 

Brussels, 16.11.2010 
COM(2010) 671 final 

2010/0327 (NLE) 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain graphite electrode 
systems originating in India following an expiry review pursuant to Article 11(2) of 
Council Regulation (EC) No 1225/2009 

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EXPLANATORY MEMORANDUM 

1) 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  1225/2009  of 
30 November 2009 on protection against dumped imports from countries not members 
of the European Community (‘the basic Regulation’), in the expiry review proceeding 
concerning  the  anti-dumping  duty  in  force  in  respect  of  imports  of  certain  graphite 
electrode systems originating in India. 

•  General context 

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

•  Existing provisions in the area of the proposal 

A definitive anti-dumping duty on imports of certain graphite electrodes falling within 
CN code ex 8545 11 00 and nipples used for such electrodes falling within CN code ex 
8545  90  90  originating  in  India  was  imposed  by  Council  Regulation  (EC)  No 
1629/2004 (OJ L 295, 18.9.2004, p. 10), as amended by Council Regulation (EC) No 
1354/2008 (OJ L 350, 30.12.2008, p. 24). 

•  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 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 provide for a general impact assessment but contains an 
exhaustive list of conditions that have to be assessed. 

3) 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

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On 17 September  2009,  the Commission initiated upon  substantiated  request  of three 
Union  producers  an  expiry  review  of  the  anti-dumping  duty  in  force  in  respect  of 
imports of certain graphite electrodes originating in India. 

The review investigation found continuing dumping of the product concerned, which, 
should anti-dumping measures be lifted, would result in the recurrence of injury to the 
Union industry. It was further established that the lapse of measures would not be in 
the interest of the Union.  

Therefore,  it  is  suggested  that  the  Council  adopts  the  attached  proposal  for  a 
Regulation in order to prolong the existing measures, which should be published in the 
Official Journal of the European Union by 16 December 2010 at the latest.  

•  Legal basis 

Council  Regulation  (EC)  No  1225/2009  of  30  November  2009  on  protection  against 
dumped imports from countries not members of the European Community. 

•  Subsidiarity principle 

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

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

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

Indication of how financial and administrative burden falling upon the Union, 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: 

The basic Regulation does not provide for alternative options. 

4) 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union budget. 

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2010/0327 (NLE) 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain graphite electrode 
systems originating in India following an expiry review pursuant to Article 11(2) of 
Council Regulation (EC) No 1225/2009 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’), and in particular Article 11(2) thereof, 

Having  regard  to  Council  Regulation  (EC)  No  597/2009  of  11  June  2009  on  protection 
against subsidised imports from countries not members of the European Community2, and in 
particular Article 24(1) thereof, 

Having  regard  to  the  proposal  submitted  by  the  European  Commission  ('Commission')  after 
consulting the Advisory Committee, 

Whereas: 

A. 

PROCEDURE 

1.  Measures in force 

(1) 

(2) 

The Council, following an anti-dumping investigation ('the original investigation'), by 
Regulation (EC) No 1629/20043, imposed, a definitive anti-dumping duty on imports 
of  certain  graphite  electrodes  currently  falling  within  CN  code  ex  8545  11  00  and 
nipples  used  for  such  electrodes  currently  falling  within  CN  code  ex  8545  90  90 
originating  in  India  (‘the  definitive  anti-dumping  measures’).  The  measures  took  the 
form of an ad valorem duty of 0 %. 

The  Council,  following  an  anti-subsidy  investigation,  by  Regulation  (EC)  No 
1628/20044,  imposed,  a  definitive  countervailing  duty  on  imports  of  certain  graphite 
electrodes currently falling within CN code ex 8545 11 00 and nipples used for such 
electrodes  currently  falling  within  CN  code  ex  8545  90  90  originating  in  India  (‘the 

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OJ L 343, 22.12.2009, p. 51. 
OJ L 188, 18.7.2009, p. 93. 
OJ L 295, 18.9.2004, p. 10. 
OJ L 295, 18.9.2004, p. 4. 

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(3) 

(4) 

definitive  countervailing  measures’).  The  measures  took  the  form  of  an  ad  valorem 
duty of 15,7 %, with the exception of one company for which the duty rate was 7 %. 

Following  an  ex  officio  partial  interim  review  of  the  countervailing  measures,  the 
Council,  by  Regulation  (EC)  No  1354/20085,  amended  Council  Regulation  (EC)  No 
1628/2004 and Council Regulation (EC) No 1629/2004. The definitive countervailing 
duties  were  amended  to  6,3  %  and  7,0  %  for  imports  from  individually  named 
exporters, with a residual duty rate of 7,2 %. The definitive anti-dumping duties were 
amended  to  9,4  %  and  0  %  for  imports  from  individually  named  exporters,  with  a 
residual duty rate of 8,5 %. 

2.  Request for an expiry review 

Following  the  publication  of  a  notice  of  impending  expiry6  of  the  definitive  anti-
dumping measures in force, the Commission received on 18 June 2009 a request for 
the  initiation  of  an  expiry  review  of  these  measures  pursuant  to  Article  11(2)  of  the 
basic  Regulation.  The  request  was  lodged  by  three  Union  producers:  Graftech 
International,  SGL  Carbon  GmbH,  and  Tokai  ERFTCARBON  GmbH  (‘the 
applicants’) representing a major proportion, in this case more than 90 %, of the total 
Union production of certain graphite electrode systems.  

(5) 

The request was based on the grounds that the expiry of the measures would be likely 
to result in a continuation or recurrence of dumping and injury to the Union industry. 

(6) 

(7) 

3. 

Initiation of an expiry review 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed  for  the  initiation  of  an  expiry  review,  the  Commission  announced  on  17 
September 2009, by a notice published in the Official Journal of the European Union7 
('the Notice of initiation'), the initiation of an expiry review pursuant to Article 11(2) 
of the basic Regulation.  

4. 

Parallel investigations 

By a notice of initiation published in the Official Journal of the European Union on 17 
September  20098,  the  Commission  also  announced  the  initiation  of  an  expiry  review 
investigation  pursuant  to  Article  18  of  Council  Regulation  (EC)  No  597/2009  of  11 
June 2009 on protection against subsidised imports from countries not members of the 
European Union9 (‘the basic anti-subsidy Regulation’) of the definitive countervailing 
measures. 

5. 

Investigation  

5.1.  Investigation period 

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OJ L 350, 30.12.2008, p. 24. 
OJ C 34, 11.2.2009, p. 11. 
OJ C 224, 17.9.2009, p. 20. 
OJ C 224, 17.9.2009, p. 24. 
OJ L 188, 18.7.2009, p. 93. 

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(8) 

(9) 

The investigation of continuation or recurrence of dumping covered the period from 1 
July  2008  to  30  June  2009  (‘the  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 1 January 2006 to the end 
of the review investigation period (‘the period considered’). 

5.2.  Parties concerned by the investigation 

The  Commission  officially  advised  the  applicants,  other  known  Union  producers, 
exporting producers, importers, users known to be concerned, and the representatives 
of the exporting country of the initiation of the expiry review. Interested parties were 
given the opportunity to make their views known in writing and to request a hearing 
within the time limit set out in the Notice of initiation.  

(10)  All interested parties, who so requested and showed that there were particular reasons 

why they should be heard, were granted a hearing.  

(11) 

In  view  of  the  apparent  large  number  of  unrelated  importers,  it  was  considered 
appropriate, in accordance 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  parties  were 
requested, pursuant to Article 17 of the basic Regulation, to make themselves known 
within 15 days of the initiation of the reviews and to provide the Commission with the 
information  requested  in  the  Notice  of  initiation.  However,  no  unrelated  importers 
came forward to cooperate. Sampling was therefore not necessary.  

(12)  The Commission sent questionnaires to all parties known to be concerned and to those 
who  made  themselves  known  within  the  deadlines  set  in  the  Notice  of  initiation. 
Replies were received from three groups of Union producers (i.e., the applicants), one 
exporting  producer  and  17 users.  None  of  the  importers  came  forward  during  the 
sampling  exercise  and  no  other  importers  supplied  the  Commission  with  any 
information or made themselves known in the course of the investigation.  

(13)  Only  one  of  the  two  known  exporting  producers  in  India,  namely  HEG  Limited 
('HEG') fully cooperated in the review by submitting a response to the questionnaire. It 
should be noted in this regard that in the original investigation the full, official name 
of that company was Hindustan Electro Graphite Limited. Subsequently the company 
has changed its name into HEG Limited. The second exporting producer cooperating 
in  the  original  investigation,  namely  Graphite  India  Limited  ('GIL')  decided  not  to 
submit a questionnaire reply in the present review.  

(14)  The  Commission  sought  and  verified  all  the  information  it  deemed  necessary  for  a 
determination of the likelihood of continuation or recurrence of dumping and resulting 
injury and of the Union interest. Verification visits were carried out at the premises of 
the following interested parties: 

(a)  Union producers 

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SGL Carbon GmbH, Wiesbaden and Meitingen, Germany; 

Graftech Switzerland SA, Bussigny, Switzerland; 

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– 

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Graftech Iberica S.L., Ororbia, Spain; 

Tokai ERFTCARBON GmbH, Grevenbroich, Germany. 

(b)  Exporting producer in India 

– 

HEG Limited, Bhopal. 

B. 

PRODUCT CONCERNED AND LIKE PRODUCT 

(15)  The  product  concerned  by  this  review  is  the  same  as  the  one  in  the  original 
investigation, namely graphite electrodes of a kind used for electric furnaces, with an 
apparent  density  of  1,65  g/cm3  or  more  and  an  electrical  resistance  of  6,0  µ.Ω.m  or 
less,  currently  falling  within  CN  code  ex  8545  11  00  and  nipples  used  for  such 
electrodes, currently falling within CN code ex 8545 90 90 whether imported together 
or separately originating in India (‘the product concerned’). 

(16)  The  investigation  confirmed  that,  as  in  the  original  investigation,  the  product 
concerned and the products manufactured and sold by the exporting producer on the 
domestic  market  in  India,  as  well  as  those  manufactured  and  sold  in  the  EU  by  the 
Union producers, have the same basic physical and technical characteristics as well as 
the same uses and are, therefore, considered to be like products within the meaning of 
Article 1(4) of the basic Regulation. 

C. 

LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING 

(17) 

In accordance with Article 11(2) of the basic Regulation, it was examined whether the 
expiry of the existing measures would be likely to lead to a continuation or recurrence 
of dumping. 

1.  General 

(18)  Cooperation  was  obtained  from  one  exporting  producer  in  India.  The  second  known 

exporting producer did not cooperate in the investigation.  

(19)  The comparison of the export volume of the cooperating exporting producer with the 
total volume of exports to the Union from India showed that the cooperating exporting 
producer  accounted  for  the  vast  majority  of  all  Union  imports  from  India  during  the 
RIP. The level of cooperation was therefore considered to be high.  

2.  Dumping of imports during the RIP 

2.1.  Normal value 

(20) 

In  accordance  with  Article  2(2)  of  the  basic  Regulation,  the  Commission  first 
examined  whether  the  cooperating  Indian  exporting  producer's  domestic  sales  of  the 
like  product  to  independent  customers  were  representative,  i.e.  whether  the  total 
volume  of  such  sales  was  equal  to  at  least  5  %  of  the  total  volume  of  the 
corresponding export sales to the Union.  

(21)  The  Commission  subsequently  identified  those  types  of  the  like  product  sold 
domestically  by  the  company  that  were  identical  or  directly  comparable  to  the  types 

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sold for export to the Union. The elements taken into account in defining the product 
types  of  graphite  electrode  systems  were  i)  whether  they  were  sold  with  a  nipple  or 
not, ii) their diameter and iii) their length.  

(22)  The  cooperating  exporting  producer  claimed  that  the  fact  that  graphite  electrode 
systems are produced from different grades of coke (basic raw material) should also be 
taken into account when establishing identical or directly comparable types of graphite 
electrode systems. Indeed it was confirmed that in the production process the company 
used two different types of coke: imported needle coke which is of a superior quality 
and regular coke sourced on the Indian market. It was also confirmed that the type of 
coke used determines the cost of production and the price of the end product.  

(23)  Therefore,  in  order  to  ensure  a  fair  comparison,  the  Commission  split  each  of  the 
product types into low-grade and high-grade products for the purpose of the dumping 
calculation.  

(24) 

It  was  further  examined  whether  the  domestic  sales  of  the  cooperating  exporting 
producer were representative for each product type, i.e. whether domestic sales of each 
product type constituted at least 5 % of the sales volume of the same product type to 
the Union. For the product types sold in representative quantities it was then examined 
whether  such  sales  were  made  in  the  ordinary  course  of  trade,  in  accordance  with 
Article 2(4) of the basic Regulation.  

(25)  The  examination  as  to  whether  the  domestic  sales  of  each  product  type,  sold 
domestically  in  representative  quantities,  could  be  regarded  as  having  been  made  in 
the ordinary course of trade was made by establishing the proportion of the profitable 
sales to independent customers of the type in question. In all cases where the domestic 
sales  of  the  particular  product  type  were  made  in  sufficient  quantities  and  in  the 
ordinary  course  of  trade,  normal  value  was  based  on  the  actual  domestic  price, 
calculated as a weighted average of all the domestic sales of that type made during the 
RIP. 

(26)  For the remaining product types where domestic sales were not representative or not 
sold in the ordinary course of trade, normal value was constructed in accordance with 
Article 2(3) of the basic  Regulation.  Normal value was constructed by adding  to  the 
manufacturing  costs  of  the  exported  types,  adjusted  where  necessary,  a  reasonable 
percentage  for  selling,  general  and  administrative  expenses  and  a  reasonable  margin 
for profit, on the basis of actual data pertaining to production and sales, in the ordinary 
course of trade, of the like product, by the exporting producer under investigation in 
accordance with the first sentence of Article 2(6) of the basic Regulation.  

2.2.  Export price  

(27)  Since all export sales of the cooperating Indian exporting producer to the Union were 
made directly to independent customers, the export price was established on the basis 
of  the  prices  actually  paid  or  payable  for  the  product  concerned  in  accordance  with 
Article 2(8) of the basic Regulation. 

2.3.  Comparison  

(28)  The comparison between the weighted average normal value and the weighted average 
export price was made on an ex-works basis and at the same level of trade. In order to 

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ensure  a  fair  comparison  between  normal  value  and  the  export  price,  account  was 
taken,  in  accordance  with  Article  2(10)  of  the  basic  Regulation,  of  differences  in 
factors  which  were  demonstrated  to  affect  prices  and  price  comparability.  For  this 
purpose,  due  allowance  in  the  form  of  adjustments  was  made  for  differences  in 
transport,  insurance,  handling,  loading  and  ancillary  costs,  financial  costs,  bank 
charges and anti-dumping duties paid by the applicant where applicable and justified.  

(29)  The  cooperating  Indian  exporting  producer  claimed  that  in  its  case  the  Duty 
Entitlement Passbook Scheme ('DEPBS') is effectively a duty drawback scheme, since 
the DEPBS licenses are only used to pay the import duties for the raw-materials used 
for  the  production  of  graphite  electrode  systems.  Therefore  the  cost  of  import  duties 
paid  for  raw-materials  is  refunded  when  the  product  is  exported  resulting  in  a  lower 
export  price.  The  company  claimed  therefore  that  an  adjustment  should  be  made  on 
the domestic prices since they are not affected by the reimbursement of import duties. 
The investigation showed that, contrary to what has been claimed, the company uses 
the  duty-free  imported  raw  materials  both  in  the  production  of  graphite  electrode 
systems  destined  for  the  export  market  as  well  as  in  the  production  destined  for  the 
domestic  market.  Therefore,  the  DEPBS  has  no  influence  on  the  price  difference 
between  domestically  sold  and  exported  products  and  the  adjustment  cannot  be 
granted.  

2.4.  Dumping margin  

(30)  As  provided  for  under  Article  2(11)  of  the  basic  Regulation,  the  weighted  average 
normal  value  by  type  was  compared  with  the  weighted  average  export  price  of  the 
corresponding  type  of  the  product  concerned.  Based  on  the  above  methodology,  the 
dumping margin established for the cooperating exporting producer amounts to 11-12 
%.  

(31) 

(32) 

In its comments to disclosure of the essential facts and considerations on the basis of 
which it was intended to recommend that the existing measures be maintained ('final 
disclosure'),  the  company  in  question  claimed  that  the  calculation  of  the  dumping 
margin  on  the  basis  of  4  of  the  12  months  of  the  RIP  was  a  deviation  from  the 
methodology  used  in  the  original  investigation  where  all  12  months  of  the 
investigation period were taken into account. It claimed therefore that the calculation 
method used inflated the dumping margin.  

It  is  recalled,  that  basing  the  dumping  calculation  on  4  months  of  the  RIP  is  a 
methodology normally used by the Commission in expiry reviews, where it should be 
determined whether there is continuation of dumping or a likelihood that dumping will 
recur. The investigation on spot ensured that the 4 months were representative of the 
full  12  month  period.  This  was  achieved  by  comparing  costs  and  prices  of  the  4 
months data with the remaining 8 months. In addition the 4 months selected were the 
last months of each quarter and therefore evenly spread over the 12 month period. The 
Commission  does  not  therefore  agree  that  the  method  applied  alters  the  final 
conclusion with regard to the existence of dumping in the RIP nor that it inflates the 
dumping margin.  

(33) 

In view of the lack of cooperation from the second known Indian exporting producer, 
no dumping margin could be calculated for this producer. However, according to the 
review  request  exports  by  this  company  to  the  Union  were  also  made  at  dumped 

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prices. As the majority of exports from India relate to the cooperating Indian producer 
which  was  found  to  be  dumping  and  the  average  price  of  the  product  concerned 
imported from India according to Eurostat is lower than the average export price of the 
cooperating  company,  the  existence  of  dumping  at  the  country-wide  level  is 
confirmed. 

3.  Development of imports should measures be repealed  

(34)  Further to the analysis of the existence of dumping during the RIP, the likelihood of 
the  recurrence  of  dumping  was  investigated.  Given  the  fact  that  only  one  exporting 
producer  in  India  cooperated  in  this  investigation,  the  conclusions  below  rely  on  the 
data  from  the  sole  cooperating  company  as  well  as  on  facts  available  in  accordance 
with Article 18 of the basic Regulation, namely Eurostat data and the review request.  

(35) 

In  this  respect  the  following  elements  were  analysed:  the  spare  capacity  of  the 
exporting  Indian  producers;  the  attractiveness  of  the  Union  market  for  the  Indian 
producers and the export prices to third countries. 

3.1.  Spare capacity of the exporters 

(36)  As regards the cooperating Indian exporting producer the investigation showed that it 
has available spare capacity. Furthermore the company has publicly stated that it plans 
to  increase  the  existing  capacity.  It  should  also  be  underlined  that  the  company  is 
export oriented with a majority of turnover in the RIP generated by export sales and 
that the Union is still an important export destination despite the measures in force.  

(37)  Regarding  the  second  Indian  producer,  according  to  the  review  request  the  company 
has  already  substantially  increased  its  capacity  since  the  imposition  of  the  measures 
and further plans to increase it. Therefore it cannot be excluded that at least part of this 
increased capacity could be diverted to the Union market in the absence of measures.  

3.2.  Attractiveness of the Union market 

(38)  The  attractiveness  of  the  Union  market  can  be  illustrated  by  the  fact  that  the 
imposition of the anti-dumping and countervailing duties did not stop the expansion of 
the Indian exports. On the contrary, over the last three years the Indian exporters more 
than  doubled  their  exports  and  their  market  share  in  the  Union  more  than  tripled.  It 
should also be stressed that within this period the level of prices on the Union market 
increased by 40 %.  

3.3.  Export prices to third countries 

(39)  With regard to exports to third countries, the investigation showed that in the RIP the 
level of the cooperating company's ex-works export prices were lower than the export 
prices to the Union which were found to be dumped. It can therefore be expected that 
in the absence of measures the cooperating exporting producer would shift at least part 
of its exports to the Union, in view of the attractiveness of the market.  

3.4.  Conclusion of the likelihood of continuation or recurrence of dumping 

(40) 

In  view  of  the  findings  described  above,  it  can  be  concluded  that  the  exports  from 
India are still being dumped and that there is a likelihood of continuation of dumping 

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on the Union market in case the current anti-dumping measures are removed. Indeed, 
taking  into  account  the  existing  spare  capacity  in  India  and  the  attractiveness  of  the 
Union  market,  there  appears  to  be  an  incentive  for  Indian  exporting  producers  to 
increase  their  exports  to  the  Union  market  at  dumped  prices,  at  least  as  far  as  the 
cooperating exporting producer is concerned.  

D. 

DEFINITION OF THE UNION INDUSTRY 

1.  Union production 

(41)  Within  the  Union,  the  like  product  is  manufactured  by  five  companies  or  groups  of 
companies  whose  output  constitutes  the  total  Union  production  of  the  like  product 
within the meaning of Article 4(1) of the basic Regulation. 

2.  Union industry 

(42)  Two of the five groups of companies did not come forward to support the request and 
did  not  cooperate  in  the  review  investigation  by  submitting  a  response  to  the 
questionnaire. The following three groups of producers lodged the request and agreed 
to cooperate: Graftech International, SGL Carbon GmbH, and Tokai ERFTCARBON 
GmbH. 

(43)  These  three  groups  of  producers  account  for  a  major  proportion  of  the  total  Union 
production  of  the  like  product,  since  they  represent  over  90  %  of  the  total  Union 
production of certain graphite electrode systems, as indicated at recital (4) above. They 
are  therefore  deemed  to  constitute  the  Union  industry  within  the  meaning  of  Article 
4(1) and Article 5(4) of the basic Regulation and will hereinafter be referred to as the 
‘Union industry’. 

E. 

SITUATION ON THE UNION MARKET 

1. 

Preliminary remark 

(44)  Given that only one Indian exporting producer of the product concerned cooperated in 
this investigation, data relating to imports of the product concerned into the European 
Union  originating  in  India  are  not  presented  in  precise  figures  in  order  to  preserve 
confidentiality pursuant to Article 19 of the basic Regulation. 

(45)  The  situation  of  the  graphite  electrode  industry  is  closely  linked  to  that  of  the  steel 
sector  since  graphite  electrodes  are  primarily  used  in  the  electrical  steel  industry.  In 
this context, it should be noted that in 2007, and up to the first three quarters of 2008, 
very  positive  market  conditions  prevailed  within  the  steel  sector,  and  as  a 
consequence, also for the graphite electrode industry. 

(46) 

It should be noted that sales volumes of graphite electrodes move more or less in line 
with  the  volume  of  steel  production.  However,  supply  contracts  for  graphite 
electrodes,  covering  prices  and  quantities,  are  usually  negotiated  for  6-12  month 
periods.  There  is,  therefore,  generally  a  time  lag  between  developments  in  sales 
volume resulting from changes in demand and any consequential effect on prices.  

2.  Consumption in the Union market 

EN 

11 

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(47)  Union  consumption  was  established  on  the  basis  of  the  sales  volumes  of  the  Union 
industry on the Union market, an estimation of the sales volumes of the other Union 
producers  on  the  Union  market,  import  data  from  Eurostat,  and  data  collected  in 
accordance  with  Article  14(6)  of  the  basic  Regulation.  As  had  been  done  in  the 
original  investigation10,  some  imports  were  disregarded  because,  on  the  basis  of  the 
information available, they appeared not to be the product under investigation.  

(48)  Between 2006 and the RIP, Union consumption decreased by almost 25 %, with the 
main  decrease  occurring  between  2008  and  the  RIP.  It  should  be  noted  that,  due  to 
very  positive  market  conditions  at  the  beginning  of  the  period  considered,  Union 
consumption  was  at  very  high  levels  and  had  increased  by  30  %  between  the 
investigation period of the original investigation and 2006. 

Table 1 

2006 

2007 

2008 

RIP 

Total EU consumption (tonnes) 

170.035 

171.371 

169.744 

128.437 

Index (2006=100) 

100 

101 

100 

76 

3.  Volume, market share and prices of imports from India 

(49)  The  volume  of  imports  originating  in  India  ('the  country  concerned')  has  increased 
steadily  by  143  percentage  points  over  the  period  considered  and  reached  a  level  of 
5.000 to 7.000 tonnes during the RIP. The market share of imports from the country 
concerned more than tripled between 2006 and the RIP, when it reached the level of 
around  5  %.  Market  share  was  still  growing  during  the  RIP,  notwithstanding  the 
significant  decrease  in  demand.  The  prices  of  imports  from  the  country  concerned 
increased by 52 % over the period considered, following a similar trend to that for the 
Union  industry's  prices,  but  remained  consistently  lower  than  those  of  the  Union 
industry.  The  data  in  Table  2  is  not  given  in  precise  figures  for  reasons  of 
confidentiality, since there are only two known exporting producers in India.  

Table 2 

Volume of imports from the country concerned  
(tonnes) * 
Index (2006=100) 

Market share of imports from the country concerned * 
Price of imports from the country concerned 
(EUR/tonne) * 
Index (2006=100) 

2006 
2.000 to 
3.000 
100 

Around 
1,5 % 

Around 
2.000 
100 

2007 
3.000 to 
4.000 
123 

Around 
2 % 

Around 
2.600 
133 

2008 
7.000 to 
9.000 
318 

Around 
5 % 

Around 
3.000 
145 

RIP 
5.000 to 
7.000 
243 

Around 
5 % 

Around 
3.200 
152 

4. 

Economic situation of the Union industry  

(50)  Pursuant  to  Article  3(5)  of  the  basic  Regulation,  the  Commission  examined  all 
relevant  economic  factors  and  indices  having  a  bearing  on  the  state  of  the  Union 
industry.  

10 

See recital (88) of Commission Regulation (EC) No 1009/2004 (OJ L 183, 20.5.2004, p. 61).  

EN 

12 

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4.1.  Production 

(51) 

In  the  RIP,  production  decreased  by  29  %  compared  to  2006.  The  Union  industry’s 
production first increased by 2 % in 2007 compared to 2006, before declining sharply, 
particularly during the RIP.  

Table 3 

Production (tonnes) 
Index (2006=100) 

2006 
272.468 
100 

2007 
278.701 
102 

2008 
261.690 
96 

RIP 
192.714 
71 

4.2.  Capacity and capacity utilisation rates 

(52)  Production capacity decreased marginally (by 2 % overall) between 2006 and the RIP. 
As  production  also  decreased  in  2008  and  in  particular  during  the  RIP,  the  resulting 
capacity utilisation showed an overall decrease of 25 percentage points between 2006 
and the RIP. 

Production capacity (tonnes) 
Index (2006=100) 
Capacity utilisation 
Index (2006=100) 

4.3.  Stocks  

Table 4 

2006 
298.500 
100 
91 % 
100 

2007 
292.250 
98 
95 % 
104 

2008 
291.500 
98 
90 % 
98 

RIP 
293.500 
98 
66 % 
72 

(53)  The level of closing stocks of the Union industry remained stable in 2007 compared to 
2006  and  then  decreased  by  10  %  in  2008.  In  the  RIP,  the  level  of  stocks  increased 
somewhat, but was 5 % lower than in 2006.  

Closing stock (tonnes) 
Index (2006=100) 

4.4.  Sales volume  

Table 5 

2006 
21.407 
100 

2007 
21.436 
100 

2008 
19.236 
90 

RIP 
20.328 
95 

(54)  The sales by the Union industry on the Union market to unrelated customers decreased 
by  39  %  over  the  period  considered.  They  were  very  high  at  the  beginning  of  the 
period  considered  having  increased  by  nearly  70  %  compared  to  the  investigation 
period of the original investigation. Sales volumes decreased slightly in 2007 and 2008 
but remained at a relatively high level (in 2008 they were still 47 % above the level of 
the  investigation  period  of  the  original  investigation).  However,  sales  volumes 
dropped significantly between 2008 and the RIP (by almost one-third). 

Table 6 

EU Sales volume to unrelated customers (tonnes) 
Index (2006=100) 

4.5.  Market share 

2006 
143.832 
100 

2007 
139.491 
97 

2008 
124.463 
87 

RIP 
88.224 
61 

EN 

13 

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(55)  The  market  share  held  by  the  Union  industry  declined  progressively  by  almost  16 

percentage points between 2006 and the RIP (from 84,6 % to 68,7 %).  

Table 7 

2006 

2007 

2008 

RIP 

Market share of the Union industry 

84,6 % 

81,4 % 

73,3 % 

68,7 % 

Index (2006=100) 

100 

96 

87 

81 

4.6.  Growth  

(56)  Between  2006  and  the  RIP,  the  Union  consumption  decreased  by  almost  25  %.  The 
Union  industry  lost  almost  16  percentage  points  of  market  share,  whilst  the  imports 
concerned gained 3,4 percentage points of market share. 

4.7.  Employment 

(57)  The level of employment of the Union industry declined by 7 % between 2006 and the 

RIP. 

Employment product concerned (persons) 
Index (2006=100) 

4.8.  Productivity 

Table 8 

2006 
1.942 
100 

2007 
1.848 
95 

2008 
1.799 
93 

RIP 
1.804 
93 

(58)  Productivity  of  the  Union  industry's  workforce,  measured  as  output  per  person 
employed per year, decreased by 24 % between 2006 and the RIP. It increased slightly 
during 2007 and 2008, before decreasing by almost 25 % during the RIP. 

Table 9 

Productivity (tonnes per employee) 
Index (2006=100) 

2006 
140 
100 

2007 
151 
107 

2008 
146 
104 

RIP 
107 
76 

4.9.  Sales prices and factors affecting domestic prices 

(59)  Unit sales prices of the Union industry show a positive trend, having increased by 40 
%  during  the  period  considered.  This  is  due  to:  i)  the  general  level  of  prices  in  the 
market, ii) the need to recover increases in costs of production, and iii) the way supply 
contract prices are established. 

(60) 

In 2007 and 2008 the Union industry was able to increase its prices in the context of 
generally  increasing  market  prices,  which  was  due  to  continued  strong  demand  for 
graphite electrodes. This demand was a result of the very positive market conditions 
prevailing within the steel sector up until the first three quarters of 2008, as described 
in recital (45).  

(61)  Prices also increased in 2007 and 2008, in part, in order to cover increasing costs of 
production  and  in  particular  those  of  raw  materials.  Between  2006  and  2008  costs 

EN 

14 

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increased by 23 %. However, the Union industry was able to cover this by increasing 
its prices considerably (+33 %).  

(62)  Prices  still  increased,  although  to  a  lesser  extent  (+5  %),  in  the  RIP.  The  fact  that 
prices  did  not  fall  during  a  period  when  demand  dropped  is  explained  by  the  way 
supply contracts are established in the market and the fact that most supply contracts 
for  2009  were  concluded  in  2008.  As  indicated  at  recital  (46),  sales  volumes  of 
graphite  electrodes  move  more  or  less  in  line  with  steel  production.  However,  the 
negotiation of supply contracts for graphite electrodes  for  periods  of  6  to  12  months 
can  lead  to  a  delay  in  the  effect  of  any  change  (increase  or  decrease)  in  demand  on 
prices. Contracts are negotiated on the basis of anticipated sales volumes, which may 
be different from the actual sales level achieved, with the result that the price trend in a 
particular period may  not  necessarily  follow the  trend  in  sales  volumes  for  the  same 
period.  This  was  the  case  in  the  RIP  when  sales  volumes  decreased  but  prices 
remained  high  because  most  supply  contracts  for  2009  were  concluded  in  2008  and 
some deliveries foreseen for 2008 were deferred until 2009. The 5 % increase in prices 
during the RIP was, nevertheless, not sufficient to cover cost increases (+13 %), as had 
been  possible  during  the  previous  periods.  Prices  were  renegotiated  at  lower  levels 
from after the RIP. 

(63)  As explained in recital (49), the prices of imports from the country concerned followed 
a  trend  similar  to  that  of  the  Union  industry,  but  were  consistently  lower  than  the 
prices of the Union industry.  

Table 10 

2006 

2007 

2008 

RIP 

Unit price EU market (EUR/tonne) 

2.569 

3.103 

3.428 

3.585 

Index (2006=100) 

100 

121 

133 

140 

4.10.  Wages  

(64)  Between 2006 and the RIP, the average wage per employee increased by 15 %. 

Annual labour cost per employee ('000 EUR) 
Index (2006=100) 

4.11.  Investments  

Table 11 

2006 
52 
100 

2007 
56 
108 

2008 
61 
118 

RIP 
60 
115 

(65)  Between 2006 and the RIP, the annual flow of investments in the product concerned 
made by the Union industry increased by 37 %. However, during the RIP investments 
decreased by 14 % compared to 2008.  

Net investments (EUR) 
Index (2006=100) 

Table 12 

2006 
30.111.801 
100 

2007 
45.383.433 
151 

2008 
47.980.973 
159 

RIP 
41.152.458 
137 

4.12.  Profitability and return on investments 

EN 

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(66)  With  an  increase  in  costs  of  40  %  occurring  over  the  period  considered,  the  Union 
industry still managed, between 2006 and 2007, to increase its prices by more than its 
increase in costs. This led to a profit increase from the level of 19 % in 2006 to 26 % 
in 2007. From 2007 to 2008 prices and costs increased in the same proportion so that 
the  Union  industry's  margin  remained  stable  at  the  level  of  2007.  Profits  then 
decreased  again  to  19  %  in  the  RIP  due  to  the  effect  on  costs  of  lower  production 
capacity utilisation and higher raw material prices. Profits decreased further in 2009, 
since  the  Union  industry  had  to  adjust  its  prices  downwards  in  order  to  reflect  the 
general decrease of selling prices in the graphite electrode market, due to the shrinking 
demand within the steel sector.  

(67)  The return on investments (‘ROI’) increased from a level of 71 % in 2006 to 103 % in 
2007.  In  2008  it  increased  to  119  %  before  decreasing  to  77  %  during  the  RIP. 
Overall, the return on investments only increased by 6 percentage points between 2006 
and the RIP. 

Table 13 

Net Profit of EU sales to unrelated customers (% of 
net sales) 
ROI (net profit in % of net book value of investments) 

4.13.  Cash flow and ability to raise capital  

2006 

2007 

2008 

RIP 

19 % 
71 % 

26 % 
103 % 

25 % 
119 % 

19 % 
77 % 

(68)  The  net  cash-flow  from  operating  activities  increased  between  2006  and  2007.  This 
increase continued in 2008 before decreasing during the RIP. Overall, cash flow was 
28 % higher in the RIP than at the start of the period considered.  

(69)  There  were  no  indications  that  the  Union  industry  encountered  difficulties  in  raising 
capital,  mainly  due  to  the  fact  that  some  of  the  producers  are  incorporated  in  larger 
groups. 

Cash flow (EUR) 
Index (2006=100) 

Table 14 

2006 

2007 

2008 

RIP 

109.819.535  159.244.026  196.792.707  140.840.498 

100 

145 

179 

128 

4.14.  Magnitude of dumping margin 

(70)  Given  the volume, market share and prices of the imports from India, the  impact on 
the  Union  industry  of  the  actual  margins  of  dumping  cannot  be  considered  to  be 
negligible. 

4.15.  Recovery from the effects of past subsidisation and of past dumping  

(71)  The  indicators  examined  above  show  some  improvement  in  the  economic  and 
financial  situation  of  the  Union  industry  following  the  imposition  of  definitive 
countervailing  and  anti-dumping  measures  in  2004.  In  particular,  between  2006  and 
2008, the Union industry benefited from increased prices and profits. This was due to 
very positive market conditions, which allowed a high level of prices and profitability 
to  be  maintained,  even  though,  as  explained  in  recital  (55),  the  market  share  of  the 
Union  industry  was  declining.  However,  over  the  same  period,  and  despite  the 

EN 

16 

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measures, the market share of Indian imports has increased and Indian products have 
been imported at prices lower than those of the Union industry. During the RIP, profits 
already started to decrease for the Union industry and decreased further in 2009 due to 
increased costs and limited price increases. 

5. 

Impact of dumped imports and other factors 

5.1.  Impact of the dumped imports  

(72)  Despite a decrease in consumption in the European Union over the period considered, 
the volume of imports from the country concerned more than doubled and the market 
share  of  those  imports  more  than  tripled  (see  recital  (49)).  If  the  anti-dumping  and 
countervailing  duties  are  not  taken  into  consideration,  the  imports  from  the  country 
concerned undercut the prices of the Union industry, although by less than 2 %, during 
the RIP.  

5.2.  Impact of the economic crisis 

(73)  Due  to  the  very  positive  economic  conditions  prevailing  in  the  steel  and  related 
industries,  including  graphite  electrodes,  in  2007  and  in  the  first  three  quarters  of 
2008,  the  Union  industry  was  in  a  relatively  good  economic  condition  when  the 
economic crisis started at the end of 2008. The fact that supply contracts for graphite 
electrodes  are  usually  negotiated  for  6-12  months  means  that  there  is  a  delay  in  the 
effect  of  any  change  (increase  or  decrease)  in  demand  on  prices.  Since  contracts  for 
the RIP were negotiated at a stage when the effects of the economic crisis could not be 
foreseen,  the  impact  of  the  economic  crisis  during  the  RIP  was  mainly  in  terms  of 
volumes,  since,  in  terms  of  prices,  any  impact  would  be  felt  by  the  Union  industry 
with a delay. In that context it has to be noted that the situation of the Union industry 
has  deteriorated  in  some  respect,  even  during  the  period  of  positive  economic 
conditions,  by  losing  market  share  to  imports  from  the  country  concerned.  The  fact 
that this deterioration did not lead to more significant negative effects was partly due 
to  the  high  level  of  demand  in  2007-2008  which  had  allowed  the  Union  industry  to 
maintain  high  volumes  of  production  and  sales  and  partly  due  to  the  fact  that  when 
these  volumes  decreased  in  the  RIP,  the  prices  could  still  be  maintained  due  to  the 
time-lag described above.  

5.3.  Imports from other countries 

(74)  Due  to  the  inclusion  of  products  other  than  the  product  under  investigation  in  the 
import data available at CN code level from Eurostat, the following analysis has been 
made  on  the  basis  of  import  data  at  Taric  code  level,  supplemented  by  information 
from  data  collected  in  accordance  with  Article  14(6)  of  the  basic  Regulation.  Some 
imports  were  disregarded  because,  on  the  basis  of  the  information  available,  they 
appeared not to be the product under investigation.  

(75) 

It is estimated that the volume of imports from other third countries increased by 63 % 
from  around  11.000 tonnes  in  2006  to  around  18.500 tonnes  in  the  RIP.  The  market 
share of imports from other countries increased from 6,6 % in 2006 to 14,4 % in the 
RIP.  The  average  price  of  imports  from  other  third  countries  increased  by  42  % 
between 2006 and the RIP. The main imports appear to be from the People's Republic 
of  China  ('PRC'),  Russia,  Japan,  and  Mexico,  which  were  the  only  countries  with 
individual market shares higher than 1 % during the RIP. Imports from these countries 

EN 

17 

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are  further  examined  in  the  following  recitals.  Imports  from  nine  other  countries 
account for a total market share of only around 2 % and are not examined further.  

(76)  The  market  share  of  Chinese  imports  increased  by  2,4  percentage  points  over  the 
period  considered  (from  0,2  %  to  2,6  %).  The  available  information  indicates  that 
these imports were made at prices which were lower than those of the Union industry 
and also lower than those of the imports originating in India.  

(77)  The market share of imports from Russia increased by 4,2 percentage points over the 
period  considered  (from  1,9  %  to  6,1  %).  The  available  information  indicates  that 
these imports were made at prices which were slightly lower than those of the Union 
industry, but higher than those of the imports originating in India.  

(78)  The market share of imports from Japan decreased by 0,4 percentage points over the 
period  considered  (from  2,0  %  to  1,6  %).  The  available  information  indicates  that 
these imports were made at prices which were similar to, or above, those of the Union 
industry and also higher than those of the imports originating in India.  

(79)  The market share of imports from Mexico increased by 1,0 percentage points over the 
period  considered  (from  0,9  %  to  1,9  %).  The  available  information  indicates  that 
these imports were made at prices which were higher than those of the Union industry 
and also higher than those of the imports originating in India.  

(80) 

In  conclusion,  it  cannot  be  excluded  that  the  development  of  imports  from  the  PRC 
and  from  Russia  could  have  contributed  to  some  extent  to  the  deterioration  in  the 
market  share  of  the  Union  industry.  However,  given  the  general  nature  of  the  data 
available  from  the  import  statistics,  which  does  not  allow  a  price  comparison  by 
product  type,  as  was  possible  for  India  on  the  basis  of  the  detailed  information 
provided  by  the  exporting  producer,  the  impact  of  the  imports  from  the  PRC  and 
Russia cannot be established with certainty. 

Table 15 

Volume of imports from other countries (tonnes) 

Index (2006=100) 

Market share of imports from the other countries 

Price of imports from the other countries (EUR/tonne) 

Index (2006=100) 

Volume of imports from the PRC (tonnes) 

Index (2006=100) 

Market share of imports from the PRC 

Price of imports from the PRC (EUR/tonne) 

2006 

2007 

2008 

RIP 

11.289 

11.243 

19.158 

18.443 

100 

100 

170 

163 

6,6 % 

6,6 % 

11,3 % 

14,4 % 

2.467 

3.020 

3.403 

3.508 

100 

122 

138 

142 

2006 

421 

2007 

659 

2008 

2.828 

RIP 

3.380 

100 

157 

672 

804 

0,2 % 

0,4 % 

1,7 % 

2,6 % 

1.983 

2.272 

2.818 

2.969 

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18 

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Index (2006=100) 

Volume of imports from Russia (tonnes) 

Index (2006=100) 

Market share of imports from Russia 

Price of imports from Russia (EUR/tonne) 

Index (2006=100) 

Volume of imports from Japan (tonnes) 

Index (2006=100) 

Market share of imports from Japan 

Price of imports from Japan (EUR/tonne) 

Index (2006=100) 

Volume of imports from Mexico (tonnes) 

Index (2006=100) 

Market share of imports from Mexico 

Price of imports from Mexico (EUR/tonne) 

Index (2006=100) 

6.  Conclusion  

100 

2006 

3.196 

115 

2007 

2.887 

142 

2008 

8.441 

150 

RIP 

7.821 

100 

90 

264 

245 

1,9 % 

1,7 % 

5,0 % 

6,1 % 

2.379 

2.969 

3.323 

3.447 

100 

2006 

3.391 

125 

2007 

2.223 

140 

2008 

3.731 

145 

RIP 

2.090 

100 

66 

110 

62 

2,0 % 

1,3 % 

2,2 % 

1,6 % 

2.566 

3.131 

3.474 

3.590 

100 

2006 

1.478 

122 

2007 

2.187 

135 

2008 

2.115 

140 

RIP 

2.465 

100 

148 

143 

167 

0,9 % 

1,3 % 

1,2 % 

1,9 % 

2.634 

3.629 

4.510 

4.554 

100 

138 

171 

173 

(81)  As  shown  under  recital  (49)  the  volume  of  imports  from  the  country  concerned  has 
more  than  doubled  between  2006  and  the  RIP.  Given  that  consumption  declined  by 
almost 25 % over the same period, this resulted in a sharp rise in the market share held 
by Indian exporters from around 1,5 % in 2006 to around 5 % during the RIP. While 
Indian export prices to the Union increased considerably during the period considered 
as an effect of generally high market prices, they were still undercutting the prices of 
the Union industry. 

(82)  Between 2006 and the RIP, and notwithstanding the existence of the anti-dumping and 
countervailing  measures,  a  number  of  important  indicators  developed  negatively: 
production  and  sales  volumes  decreased  by  29  %  and  39  %  respectively,  capacity 
utilisation  went  down  by  28  %  and  was  followed  by  a  decrease  in  employment  and 
productivity levels. Although a part of these negative developments may be explained 
by the strong decrease in consumption, which declined by almost 25 % over the period 
considered,  the  Union  industry's  strong  decrease  in  market  share  (down  by  15,9 

EN 

19 

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percentage points between 2006 and the RIP) must also be interpreted in the light of 
the constant increase in market share of imports from India.  

(83)  As for the relatively high level of profits during the RIP, this was mainly due to the 
continued high level of prices, for the reasons explained in recital (62). It is concluded 
that  the  Union  industry's  situation  deteriorated  overall  during  the  period  considered 
and that the Union industry was in a fragile situation at the end of the RIP, despite a 
relatively high level of profit at that stage, when its efforts to maintain sales volumes 
and a sufficient level of prices, in a situation of weakened demand, were hampered by 
the increased presence of the Indian dumped imports.  

F. 

LIKELIHOOD OF CONTINUATION AND RECURRENCE OF INJURY 

1. 

Preliminary remarks 

(84)  As  already  seen,  the  imposition  of  anti-dumping  measures  has  allowed  the  Union 
industry to recover only to some extent from the injury suffered. However, when the 
high  levels  of  Union  consumption  experienced  during  most  of  the  period  considered 
disappeared  during  the  RIP,  the  Union  industry  appeared  in  a  fragile  and  vulnerable 
situation and still exposed to the injurious effect of the dumped imports from India. In 
particular, the ability of the Union industry to recover increased costs was weak at the 
end of the RIP.  

2.  Relationship  between  export  volumes  and  prices  to  third  countries  and 

export volumes and prices to the Union  

(85) 

It  was  found  that  the  average  export  price  of  Indian  sales  to  non-EU  countries  was 
below the average export price to the Union and also below the prices on the domestic 
market.  The  Indian  exporter’s  sales  to  non-EU  countries  were  made  in  significant 
quantities,  accounting  for  the  majority  of  its  total  export  sales.  Therefore,  it  was 
considered  that,  should  measures  lapse,  Indian  exporters  would  have  an  incentive  to 
shift significant quantities of exports from other third countries to the more attractive 
Union market, at price levels, which, even if they were higher than the prices to third 
countries, would likely still be below the current export price levels to the Union.  

3.  Unused capacity and stocks in the Indian market 

(86)  The  cooperating  Indian  producer  had  significant  spare  capacities  and  planned  to 
increase  its  capacity  in  2010/2011.  Therefore,  the  capacity  to  significantly  increase 
export  quantities  to  the  EU  exists,  in  particular  because  there  are  no  indications  that 
third country markets or the domestic market could absorb any additional production. 

(87) 

In  its  comments  to  the  disclosure,  the  cooperating  Indian  producer  alleged  that  its 
spare  capacity  was  mainly  due  to  the  economic  crisis  and  the  related  decrease  in 
demand. However, a significant part of the company's spare capacity can be explained 
by the fact that the company substantially increased its capacity between 2006 and the 
RIP.  Furthermore,  it  should  be  noted  that  the  company  has  planned  additional 
increased capacity. Moreover, it should also be pointed out that there is another Indian 
producer which did not cooperate, that has similar capacity and utilisation and has also 
announced recently an even more substantial increase in capacity. 

4.  Conclusion  

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(88)  The producers in the country concerned have the potential to raise and/or redirect their 
export  volumes  to  the  EU  market.  Moreover,  the  prices  of  Indian  exports  to  third 
countries are lower than those to the EU. The investigation showed that, on the basis 
of  comparable  product  types,  the  cooperating  exporting  producer  sold  the  product 
concerned  at  prices  lower  than  the  Union  industry's.  These  low  prices  would  most 
likely  decrease  in  line  with  the  lower  prices  charged  to  the  rest  of  the  world.  Such 
price behaviour, coupled with the ability of the exporters in the country concerned to 
deliver significant quantities of the product concerned to the EU market, would, in all 
likelihood, have a negative impact on the economic situation of the Union industry. 

(89)  As shown above, the situation of the Union industry remains vulnerable and fragile. If 
the  Union  industry  were  to  be  exposed  to  increased  volumes  of  imports  from  the 
country concerned at dumped prices, this would be likely to result in a deterioration of 
its  sales,  market  share,  sales  prices,  as  well  as  a  consequent  deterioration  of  its 
financial situation to the levels found in the original investigation. On this basis, it is 
therefore concluded, that the repeal of the measures would in all likelihood result in a 
worsening  of  the  already  fragile  situation,  and  a  recurrence  of  material  injury  to  the 
Union industry.  

G. 

UNION INTEREST 

1. 

Introduction 

(90) 

(91) 

In  accordance  with  Article  21  of  the  basic  Regulation,  it  was  examined  whether  the 
maintenance  of  the  existing  anti-dumping  measures  would  be  against  the  interest  of 
the  Union  as  a  whole.  The  determination  of  the  Union  interest  was  based  on  an 
appreciation  of  the  various  interests  involved,  i.e.  those  of  the  Union  industry,  of 
importers, and of users.  

It should be recalled that, in the original investigation, the adoption of measures was 
considered  not  to  be  against  the  interest  of  the  Union.  Furthermore,  the  fact  that  the 
present  investigation  is  a  review,  thus  analysing  a  situation  in  which  anti-dumping 
measures  have  already  been  in  place,  allows  the  assessment  of  any  undue  negative 
impact on the parties concerned by the current anti-dumping measures.  

(92)  On this basis it was examined whether, despite the conclusions on the likelihood of a 
continuation  or  recurrence  of  injurious  dumping,  compelling  reasons  existed  which 
would lead to the conclusion that it is not in the Union interest to maintain measures in 
this particular case.  

2. 

Interest of the Union industry 

(93)  The Union industry has proven to be a structurally viable industry. This was confirmed 
by the positive development of its economic situation observed after the imposition of 
the  anti-dumping  measures  in  2004.  In  particular,  the  fact  that  the  Union  industry 
increased  its  profitability  in  the  few  years  before  the  RIP  contrasts  sharply  with  the 
situation preceding the imposition of the measures. However, the Union industry has 
consistently  lost  market  share  while  imports  from  the  country  considered  have 
substantially  increased  in  market  share  over  the  period  considered.  Without  the 
existence  of  the  measures,  the  Union  industry  would  likely  be  in  an  even  worse 
situation. 

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3. 

Interest of importers/ users 

(94)  None of the nine unrelated importers that were contacted came forward to cooperate. 

(95)  Seventeen users came forward and submitted questionnaire replies. While most users 
have  not  sourced  graphite  electrodes  from  India  for  several  years,  and  therefore 
remained  neutral  with  respect  to  a  possible  continuation  of  the  measures,  six  users 
have,  at  least  to  some  extent,  used  Indian  electrodes.  Four  users  claimed  that  a 
continuation  of  measures  would  have  a  negative  impact  on  competition.  One 
association  (Eurofer)  strongly  opposed  a  continuation  of  the  measures  and  claimed 
that  the  measures  resulted  in  Indian  exporters  largely  withdrawing  from  the  EU 
market. The association alleges that the continuation of measures would hamper steel 
producers  in  developing  alternative  sources  of  supply  and  would  allow  the  Union 
industry  to  continue  having  a  dominant,  near  duopoly  position.  However,  it  is  clear 
from the development of the Indian imports after the imposition of the measures, that 
such a large withdrawal has not taken place; instead imports from India have increased 
significantly  during  the  period  considered.  In  addition,  the  investigation  has  shown 
that the graphite electrodes are increasingly entering the EU market from a number of 
other third countries. As for the strength of the Union industry's position in the market, 
it is recalled that its market share has decreased by almost 16 percentage points over 
the  period  considered  (see  recital  (55)  above).  Finally,  this  association  also  admitted 
that graphite electrodes represent only a relatively small component of the total costs 
of steel manufacturers. 

(96) 

It is further recalled that, in the original investigation, it was found that the impact of 
the  imposition  of  measures  would  not  be  significant  for  the  users11.  Despite  the 
existence of measures for five years, importers/users in the Union continued to source 
their  supply,  inter  alia,  from  India.  No  indications  were  brought  forward  either  that 
there  have  been  difficulties  in  finding  other  sources.  Moreover,  it  is  recalled  that,  as 
regards  the  effect  of  the  imposition  of  measures  on  users,  it  was  concluded  in  the 
original  investigation  that,  given  the  negligible  incidence  of  the  cost  of  graphite 
electrodes  on  user  industries,  any  cost  increase  was  unlikely  to  have  a  significant 
effect  on  the  user  industry.  No  indications  of  the  contrary  were  found  after  the 
imposition  of  measures.  It  is  therefore  concluded  that  the  maintenance  of  the  anti-
dumping  measures  is  not  likely  to  have  a  serious  effect  on  importers/users  in  the 
Union. 

4.  Conclusion  

(97)  Given  the  above,  it  is  concluded  that  there  are  no  compelling  reasons  against  the 

maintenance of the current anti-dumping measures.  

H. 

ANTI-DUMPING MEASURES 

(98)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which it was intended to recommend that the existing measures be maintained. They 
were  also  granted  a  period  to  submit  comments  subsequent  to  that  disclosure.  The 
submissions and comments were duly taken into consideration where warranted.  

11 

See  recital  (106)  of  Commission  Regulation  (EC)  No  1009/2004  (OJ  L  183,  20.5.2004,  p.  61)  and 
recital (22) of Council Regulation (EC) No 1629/2004 (OJ L 295, 18.9.2004, p. 10). 

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(99) 

It  follows  from  the  above  that,  as  provided  for  by  Article  11(2)  of  the  basic 
Regulation,  the  anti-dumping  measures  applicable  to  imports  of  certain  graphite 
electrodes, originating in India should be maintained. It is recalled that these measures 
consist of ad valorem duties. 

(100)  The  individual  company  anti-dumping  duty  rates  specified  in  this  Regulation  are 
solely  applicable  to  imports  of  the  product  concerned  produced  by  these  companies 
and  thus  by  the  specific  legal  entities  mentioned.  Imports  of  the  product  concerned 
manufactured by any other company not specifically mentioned in the operative part 
of  this  Regulation  with  its  name  and  address,  including  entities  related  to  those 
specifically mentioned, cannot benefit from these rates and shall be subject to the duty 
rate applicable to 'all other companies'.  

(101)  Any claim requesting the application of these individual anti-dumping duty rates (e.g. 
following  a  change  in  the  name  of  the  entity  or  following  the  setting  up  of  new 
production or sales entities) should be addressed to the Commission12 forthwith with 
all  relevant  information,  in  particular  any  modification  in  the  company’s  activities 
linked  to  production,  domestic  and  export  sales  associated  with,  for  instance,  that 
name  change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  the 
Regulation  will  then  be  amended  accordingly  by  updating  the  list  of  companies 
benefiting from individual duty rates, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

A definitive anti-dumping duty is hereby imposed on imports of graphite electrodes 
of a kind used for electric furnaces, with an apparent density of 1,65 g/cm3 or more 
and an electrical resistance of 6,0 µ.Ω.m or less, currently falling within CN code ex 
8545  11  00  (TARIC  code  8545  11  00  10)  and  nipples  used  for  such  electrodes 
currently  falling  within  CN  code  ex  8545  90  90  (TARIC  code  8545  90  90  10) 
whether imported together or separately originating in India. 

The rate of duty applicable to the net free-at-Union-frontier price, before duty, for the 
products described in paragraph 1 and produced by the companies listed below shall 
be as follows: 

Company 

Graphite  India  Limited  (GIL),  31 
Chowringhee  Road,  Kolkatta  – 
700016, West Bengal 

HEG  Limited,  Bhilwara  Towers,  A-
12,  Sector-1,  Noida  –  201301,  Uttar 
Pradesh 

Definitive 
Duty 
(%) 
9,4  

TARIC 
Additional 
Code 
A530 

0  

A531 

12 

European Commission, Directorate-General for Trade, Directorate H, B-1049 Brussels, Belgium. 

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All other companies 

8,5  

A999 

3. 

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

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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