Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty on imports of certain manganese dioxides originating in the Republic of South Africa following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009
Date: 2014-02-05
Institutions: European Commission
Subjects: South Africa, anti-dumping duty, import (EU), manganese, originating product

EUROPEAN 
COMMISSION 

Brussels, 5.2.2014  
COM(2014) 50 final 

2014/0025 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

imposing a definitive anti-dumping duty on imports of certain manganese dioxides 
originating in the Republic of South Africa following an expiry review pursuant to 
Article 11(2) of Regulation (EC) No 1225/2009 

EN 

   EN 

 
 
 
  
 
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 
electrolytic manganese dioxides originating in the Republic of South Africa (‘South 
Africa’). 

•  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 

The  measures  currently  in  force  are  a  definitive  anti-dumping  duty  imposed  by 
Council  Regulation  (EC)  No  221/2008  on  imports  of  certain  manganese  dioxides 
originating in South Africa (OJ L69, 13.3.2008, p.1.). 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

•  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. 

EN 

2 

   EN 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

On  12  March  2013  the  Commission  initiated  an  expiry  review  of  the  anti-dumping 
measures  applicable  to  imports  of  electrolytic  manganese  dioxides  (‘EMD’) 
originating in South Africa.  

Following  imposition  of  measures,  imports  of  EMD  from  South  Africa  virtually 
ceased.  However,  the  investigation  concluded  that  there  was  a  likelihood  of 
recurrence of dumping should the measures be allowed to lapse.  

The Union industry was found to be still in a fragile and vulnerable situation and the 
likelihood of recurrence of injury was considered to be very high. The investigation 
further established that the continuation of measures would not be against the Union 
interest. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
in  order  to  prolong  the  measures  currently  in  force  on  imports  of  EMD  from  South 
Africa, which should be published in the Official Journal of the European Union. 

•  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  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  basic  Regulation  and  leaves  no  scope  for 
national decision. 

Indication  of  how  the  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. 

EN 

3 

   EN 

 
2014/0025 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

imposing a definitive anti-dumping duty on imports of certain manganese dioxides 
originating in the Republic of South Africa following an expiry review pursuant to 
Article 11(2) of 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 Community 1 (the ‘basic 
Regulation’), and in particular Article 11(2) thereof, 

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

Whereas: 

Measures in force 

A. PROCEDURE 

Following  an  anti-dumping  investigation  (‘the  original  investigation’),  the  Council 
imposed, by Regulation (EC) No 221/20082, a definitive anti-dumping duty of 17.1% 
on  imports  of  electrolytic  manganese  dioxides  (i.e.  manganese  dioxides  produced 
through an electrolytic process) not heat-treated after the electrolytic process, currently 
falling  within  CN  code  ex  2820  10  00  originating  in  the  Republic  of  South  Africa 
(‘South Africa’) (‘the anti-dumping measures in force’). 

Request for an expiry review 
Following  the  publication  of  a  notice  of  impending  expiry3  of  the  anti-dumping 
measures in force, the Commission received, on 11 December 2012, a request for the 
initiation  of  an  expiry  review  of  those  measures  under  Article  11(2)  of  the  basic 
Regulation.  The  request  was  lodged  by  the  companies  Cegasa  Internacional  SA  and 
Tosoh Hellas A.I.C. (‘the applicants’), the only two Union producers of EMD. 

The request was based on the grounds that the expiry of the anti-dumping measures in 
force  would  be  likely  to  result  in  a  recurrence  of  injurious  dumping  to  the  Union 
industry. 

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 12 March 
2013 the initiation of an expiry review under Article 11(2) of the basic Regulation, by 

OJ L 343, 22.12.2009, p. 51. 
OJ L 69, 13.3.2008, p. 1. 
OJ C 180, 21.6.2012, p. 15. 

1. 

(1) 

2. 

(2) 

(3) 

3. 

(4) 

1 
2 
3 

EN 

4 

   EN 

                                                 
a  notice  published  in  the  Official  Journal  of  the  European  Union4,  ('notice  of 
initiation').  

Investigation 

Review investigation period and the period considered 

The  investigation  of  likelihood  of  recurrence  of  dumping  covered  the  period  from  1 
January 2012 to 31 December 2012 (‘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 2009 to the end 
of the review investigation period (‘the period considered’). 

Parties concerned by the investigation 

The  Commission  officially  advised  the  applicants,  the  exporting  producer  in  South 
Africa,  importers,  users  in  the  Union  known  to  be  concerned  and  their  associations, 
and  the  representatives  of  the  exporting  country  concerned,  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.  All 
interested parties, who so requested and showed that there were particular reasons why 
they should be heard, were granted a hearing. 

In  view  of  the  limited  number  of  interested  parties  which  made  themselves  known, 
sampling of interested parties was not necessary. 

Questionnaire replies were received from the exporting producer in South Africa, the 
two Union producers and two users belonging to the same group of related companies. 

4. 

4.1. 

(5) 

4.2. 

(6) 

(7) 

(8) 

(9) 

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

(a) 

Union producers: 

–  Cegasa Internacional SA (‘Cegasa’) 

–  Tosoh Hellas A.I.C (‘THA’) 

(b) 

Exporting producers in South Africa: 

–  Delta E.M.D. (Pty) Ltd 

(c) 

Users 

–  Panasonic Energy Belgium NV 

(11)  On 29 October 2013, the Commission disclosed to all interested parties the essential 
facts and considerations on the basis of which it intended to propose maintaining the 
anti-dumping measures in force. Again, parties were given an opportunity to provide 
comments and those who so requested were granted a hearing in the presence of the 
Hearing Officer. The comments made by the interested parties were considered by the 
Commission and responded to below. 

B. 

PRODUCT CONCERNED AND LIKE PRODUCT 

4 

OJ C 72, 12.3.2013, p. 8. 

EN 

5 

   EN 

                                                 
(12)  The  product  concerned  by  this  review  is  the  same  as  the  one  defined  in  Regulation 
(EC) No 221/2008, namely electrolytic manganese dioxides (i.e. manganese dioxides 
produced through an electrolytic process) not heat-treated after the electrolytic process 
(‘the  product  under  review’  or  ‘EMD’),  originating  in  the  Republic  of  South  Africa, 
currently falling within CN code ex 2820 10 00. It comprises two main types, carbon 
zinc grade EMD and alkaline grade EMD. 

(13)  The  review  investigation  confirmed  that,  as  in  the  original  investigation,  the  product 
under review imported into the Union market and the products manufactured and sold 
by the exporting producer on their domestic market, as well as those manufactured and 
sold  in  the  Union  by  the  Union  Industry  (‘the  like  product’),  have  the  same  basic 
physical  and  chemical  characteristics  and  uses.  Therefore,  these  products  are 
considered  to  be  like  products  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation. 

C. 

LIKELIHOOD OF RECURRENCE OF DUMPING 

1. 

(14) 

2. 

(15) 

2.1. 

(16) 

Preliminary remarks 

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

Dumping of imports during the RIP 

Imports to the Union from South Africa dropped to almost zero after the imposition of 
measures, with only a very small quantity exported in 2010, 2011 and during the RIP. 
To assess whether the sole known exporting producer Delta EMD (Pty) Ltd (‘Delta’) 
was exporting to the Union at dumped prices during the RIP, the Commission sent a 
questionnaire to Delta. It received a reply including data on domestic sales, exports to 
the  Union  and  exports  to  other  destinations.  The  reply  provided  was  verified  as 
detailed below. 

Normal value 

In  accordance  with  Article  2(2)  of  the  basic  Regulation  Delta’s  domestic  sales  were 
examined to see whether the total volume of sales of the like product to independent 
customers was representative in comparison with its total volume of export sales to the 
Union, i.e. whether the total volume of such sales represented at least 5% of the total 
volume of export sales of the product under review to the Union.  

(17)  While the domestic sales of the product under review were representative there were 
no  sales  in  the  ordinary  course  of  trade  as  Delta’s  domestic  sales  of  EMD  were 
unprofitable.  Normal  value  was  therefore  constructed  under  Article  2(3)  of  the  basic 
Regulation.  

(18)  This  was  done  on  the  basis  of  the  actual  cost  of  production  of  EMD,  to  which  a 
reasonable  amount  for  selling,  general  and  administrative  expenses  (SG&A)  and  for 
profit was added in accordance with Article 2(6) of the basic Regulation.  

(19)  The  SG&A  was  calculated  using  Article  2(6)(c),  as  Delta's  sales  were  not  in  the 
ordinary  course  of  trade  and  since  both  Article  2(6)(a)  and  (b)  were  not  applicable 
given  that  respectively  there  are  no  other  exporters  or  producers  subject  to  the 
investigation, and Delta does not have any other sales of products of the same general 
category.  Using  the  SG&A  of  the  original  investigation,  which  gave  an  almost 
identical  percentage  as  the  actual  SG&A,  was  therefore  considered  a  reasonable 
method.  

EN 

6 

   EN 

(20)  After disclosure, Delta requested the Commission to calculate the constructed normal 
value  by  expressing  the  SG&A  calculated  above  as  a  percentage  of  cost  of 
manufacturing  rather  than  as  a  percentage  of  turnover.  Given  that  all  domestic  sales 
were  unprofitable,  the  use  of  turnover  would  result  in  inflated  SG&A  costs.  The 
Commission  accepted  Delta’s  claim  and  when  constructing  normal  value,  the 
Commission added SG&A as a percentage of the cost of manufacturing per kg from 
this review investigation. 

(21)  Profit was also calculated using the same methodology as in the original investigation, 
i.e. on the basis of long-term lending commercial interest rates in South Africa during 
the  RIP  under  Article  2(6)(c).  Delta  does  not  sell  other  products  on  the  domestic 
market,  and  there  are  no  other  known  producers  of  EMD  or  other  producers  of 
products of the same general category in South Africa from whom profit data could be 
taken. 

(22)  After  disclosure  the  Union  industry  requested  that  the  Commission  use  sales  to  the 
USA to determine normal value, as they perform the function of sales on the domestic 
market, under Article 2(3) of the basic Regulation. 

(23)  This  was  rejected  as  normal  value  was  constructed  under  Article  2(3)  of  the  basic 
Regulation using the same methodology as in the original investigation, and therefore  
in line with Article 11(9) of the same Regulation. 

2.2. 

Export price 

(24)  The  very  small  quantity  of  EMD  exported  to  the  Union  during  the  RIP  was  sold 
directly to an unrelated importer in the Union. In accordance with Article 2(8) of the 
basic Regulation, the export price was taken as the price paid by the importer to Delta. 

2.3. 

Comparison 

(25)  A comparison was made between the export price and the constructed normal value by 
taking account of the claimed and verified adjustments under Article 2(10) of the basic 
Regulation, namely freight costs, insurance, credit costs and handling charges on the 
export  side.  The  normal  value  was  constructed  on  an  ex-works  basis  by  removing 
freight charges and credit costs. The costs of packaging and technical assistance were 
not  removed  as  they  were  already  accounted  for  in  the  cost  of  manufacturing  and 
therefore included in both the export price and the constructed normal value. 

2.4. 

Dumping margin 

(26)  The  EMD  sold  to  the  Union  by  Delta  during  the  RIP  was  found  not  to  have  been 
dumped.  However  the  quantity  involved  was  extremely  small  and  thus  this  finding 
could not be fully relied upon to establish likelihood of recurrence of dumping, should 
the measures lapse. 

3. 

Evidence of likelihood of recurrence of dumping 

(27)  Since  no  conclusions  could  be  drawn  from  the  sale  to  the  EU  during  the  RIP,  the 
Commission  analysed  whether  there  was  evidence  of  likelihood  of  recurrence  of 
dumping  should  the  measure  lapse.  When  doing  so,  the  following  elements  were 
analysed:  the  export  price  from  South  Africa  to  other  destinations,  the  production 
capacity and spare capacity in South Africa and the attractiveness of the Union market 
and other third markets. 

3.1. 

Exports from South Africa to other destinations 

EN 

7 

   EN 

(28)  Delta produces both alkaline grade EMD and carbon zinc grade EMD, and given that 
there is a market in the EU for the alkaline grade EMD and also (to a smaller extent) 
carbon zinc grade EMD, the Commission examined the export price of both grades to 
third countries during the RIP. These sales were compared to the constructed normal 
value  as  calculated  above,  taking  into  account  differences  which  affect  price 
comparability. 

(29)  Sales  of  alkaline  grade  EMD  to  the  USA,  Delta’s  most  important  export  market, 
accounted for roughly two-thirds of Delta’s total exports during the RIP and were not 
dumped.  However  sales  of  alkaline  grade  EMD  to  other  destinations  (such  as 
Thailand,  Korea,  China  and  Brazil),  sold  in  smaller  quantities,  were  found  to  be 
exported  at  dumped  prices,  with  dumping  margins  ranging  from  2%  to  21%.  In 
addition,  when  looking  at  the  export  sales  of  carbon  zinc  grade  EMD  to  other 
destinations, mainly sold at low prices and low quantities, the dumping margins were 
higher, ranging from 13% to 66%.  

(30)  Following disclosure the Union industry  claimed that the Commission should  ignore 
the  sales  made  to  the  USA  during  the  RIP  as  the  prices  to  that  market  were  not  an 
appropriate  guide  as  to  the  likely  price  level  of  sales  to  the  EU  market  should 
measures lapse. 

(31)  Delta, on the other hand, requested the Commission after disclosure to pay particular 
attention  to  the  sales  made  to  the  USA,  which  represents  the  large  majority  of  its 
alkaline grade exports and is the most comparable market to the EU.   

(32)  The  Commission  analysed  all  export  sales  to  all  destinations,  calculated  an  average 
weighted  export  price  of  Delta’s  exports  to  all  other  non-EU  destinations  but  also 
looked into great detail at export prices to individual third countries. When looking at 
the  question  of  the  likelihood  of  recurrence  of  dumping,  all  export  sales  to  all 
destinations  were  found  to  be  relevant,  in  particular  in  view  of  the  significant  price 
differences found on different export markets.  

(33)  The  USA  market  has  its  own  particular  characteristics,  allowing  Delta  to  charge 
significantly  higher  prices  there  than  elsewhere.  In  the  USA  demand  significantly 
exceeds  domestic  supply.  Also,  high  entry  barriers  exist  for  a  large  number  of 
potential  competitors  as  high  anti-dumping  duties  are  in  force  against  imports  from 
China and Australia.  

(34) 

In these circumstances there is no reason why the Commission should base its findings 
only on the average export price or only examine export sales to one country instead of 
analysing all export sales to all destinations.  

(35)  Delta’s price behaviour to other export markets than the EU shows that although their 
exports  to  their  most  important  market  (the  USA)  were  not  sold  at  dumped  prices, 
sales  to  other  destinations  were  dumped.  Further  indicators,  as  set  out  below,  are 
therefore  required  to  assess  the  likelihood  of  recurrence  of  dumping  should  the 
measures lapse. 

3.2. 

Production capacity and spare capacity in South Africa 

(36)  Delta has spare capacity to produce EMD that could allow it to resume exports to the 
Union in some significant quantity should the measures lapse. Delta has estimated, and 
the Commission has confirmed, that this spare capacity was between 4 000 to 6 000 
MT per year. This calculation takes into account electricity shortages current in South 
Africa and volumes of waste. Given some difficulty in maintaining quality levels with 
a manually controlled plant, the Commission conservatively estimates that between 2 

EN 

8 

   EN 

000 to 3 000 MT per year would  be alkaline grade EMD whereas the rest would be 
carbon zinc grade EMD. Both grades would however be suitable for the EU market.  
Whereas part of the carbon zinc grade EMD quantity might be absorbed by other third 
country  markets,  there  are  no  indications  that  other  third  country  markets  or  the 
domestic market could absorb the significant spare capacity of alkaline grade EMD.  

(37)  Delta stated during the verification that they are a long established “top-up” supplier 
for  their  customers  on  the  US  market,  whereby  they  fill  the  gap  when  domestic 
producers cannot produce enough. Delta’s exports to the USA have  been stable over 
the last 4 years, which suggests that there was no possibility for Delta to increase its 
sales to the USA. If it was possible to increase exports to the USA, Delta would have 
done  so  already  in  order  to  benefit  from  the  higher  prices  that  prevail  on  the  US 
market and also from the increased economies of scale arising from producing higher 
quantities.  

(38)  Delta’s  sales  to  the  Asian  market  were  more  focused  on  carbon  zinc  EMD.  Delta’s 
sales  to  Asia  account  for  50%  of  all  of  Delta’s  carbon  zinc  EMD  sales.  China  has 
domestic EMD producers and Delta’s exports to China during the IP remained limited 
to  the  very  small  quantity  of  alkaline  EMD.  As  currently  EMD  exports  to  Japan  are 
subject  to  anti-dumping  measures  and  due  to  the  fact  that  Japan  has  domestic  EMD 
producers,  it  is  unlikely  that  this  market  would  absorb  Delta’s  spare  capacity. 
Therefore it is unlikely that the Asian market could absorb Delta’s spare capacity of 
alkaline EMD.  

(39)  Following disclosure, the Union industry commented that Delta’s spare capacity was 
much higher than that given above, and pointed to several factors that would suggest 
this to be the case. They also stated that all of Delta’s spare capacity could be used to 
produce  alkaline  grade  EMD  of  a  quality  to  be  sold  to  the  EU  market  at  dumped 
prices. 

(40)  The  Union  industry  also  stated  that  Delta’s  exports  to  the  USA  would  very  likely 
diminish in the near future as one US producer had already announced increases in its 
production capacity and the very probable decrease in demand for EMD in the USA 
following  the  announced  exit  from  the  market  of  a  user  of  EMD.  In  addition,  the 
Union industry claimed that sales from South Africa to the USA after the end of the 
investigation  period  had  already  started  to  decline.  This  would  mean  that  Delta 
potentially  has  additional  quantities  of  alkaline  EMD  that  would  very  likely  be 
diverted to the EU market should measures lapse. 

(41)  Delta’s  plant,  capacity  and  capacity  to  produce  were  verified  by  the  Commission 
during  the  investigation.  As  stated  above,  in  its  calculations  the  Commission  based 
itself on conservative calculations, in particular the conservative estimate of the split 
between alkaline and carbon zinc production based on using its spare capacity.  Even 
with  this  conservative  estimate,  a  significant    spare  capacity,  in  view  of  the 
consumption in the EU of the product concerned, that can be used to produce alkaline 
grade EMD, was established. 

(42)  As  to  the  claim  regarding  the  likely  evolution  of  Delta’s  exports  to  the  USA  the 
evidence presented to the Commission suggests that these could come under pressure 
should USA EMD capacity continue to increase and demand continue to fall. 

(43)  After disclosure, one user argued that Delta’s spare capacity is low, given that Delta 
had a market share of 60-70% before measures were imposed. However, even by using 
a  conservative  estimate  of  Delta’s    spare  capacity,  if  this  spare  capacity  is  used  to 

EN 

9 

   EN 

export  to  the  EU,  Delta  could  easily  significantly  increase  its  market  share  without 
taking into account the possibility that exports to other destinations could be redirected 
to the EU. Such a development would result in a further increase of Delta’s potential 
market share.  

3.3. 

Attractiveness of the Union market and other third markets 

(44)  Delta  has  a  long-standing  and  profitable  sales  channel  to  the  USA  and  no  evidence 
was  found  that  would  suggest  that  it  would  be  in  the  interests  of  the  company  to 
deliberately  redirect  any  of  these  sales  to  the  Union.  However,  the  spare  capacity 
identified during the investigation, or at least a substantial part of it, could likely only 
be  directed  to  the  Union  for  the  reasons  mentioned  in  the  recitals  above.  Moreover, 
this  is  so  because  the  Union  market  is  among  the  largest  in  the  world.  In  addition, 
before the anti-dumping measures in force were imposed, the Union market had been 
very attractive for Delta as it had a market share of between 60-70%.  

(45) 

If Delta was to compete on price with the Union producers, then it would be forced to 
reduce its export prices and thus to sell at dumped prices to match the prices charged 
by  one  Union  producer  during  the  RIP.  Delta  could  also  redirect  their  exports  of 
alkaline grade EMD that are currently sold to third countries (other than the USA) to 
the EU at dumped prices because the Union market is more attractive than other non-
US  markets  due  to  its  size  and  generally  higher  prices.  Furthermore,  if  Delta  in  the 
future might have to reduce the quantities of EMD exported to the USA then the EU 
market would be the very likely destination of such additionally available quantities. 

(46)  Following disclosure, Delta commented that their pricing policy was to sell on the EU 

market only if it could achieve a profitable price. 

(47)  This may or may not be the case, but a profitable sale can still be a dumped one, if the 
export price remains lower than the normal value. In any case, no evidence could be 
provided to back up such a statement as Delta did not export significant quantities to 
the EU over the last five years. In addition, the Union industry claimed that the small 
quantities of EMD that were sold by Delta to the EU during the IP were done in order 
to maintain its certification with EU clients. 

(48)  Delta also commented that the average import price into the EU of EMD during 2012 
was EUR 1809 per MT, which was above their normal value, showing in Delta’s view, 
that they could compete with other importers and not dump. 

(49)  However  this  average  figure  is  made  up  of  some  extremely  expensive  imports  from 
the  USA,  and  some  much  cheaper  imports  from  China.  The  imports  from  the  USA 
could not be included in this comparison as the extremely high price level, up to three 
or four times the normal prices charged on the EU market, shed doubt on the reliability 
of these prices and/or the imported product. If Delta was to compete on price with the 
Chinese imports, at around EUR 1200 per MT, then Delta would be dumping on the 
European market. 

4. 

Conclusion on the likelihood of recurrence of dumping 

(50)  Given  the  above,  there  is  a  likelihood  that  if  the  measures  were  to  lapse,  dumping 
would reoccur. Alkaline grade EMD is the product type manufactured by Delta which 
would most likely be sold to the Union should measures lapse as this was the product 
type that was exported by Delta in the past. Also currently most demand in the EU is 
still  for  alkaline  grade  EMD.  The  investigation  showed  that  sales  of  alkaline  grade 
EMD to destinations such as South Korea, China and Brazil were found to be exported 
at dumped prices, with dumping margins from 2% to 21%.  

EN 

10 

   EN 

(51) 

In  addition,  Delta’s  spare  capacity  is  of  a  significant  quantity  in  comparison  to  the 
Union  consumption  during the RIP. If this capacity was used to export to the Union 
and to compete on price with the Union producers or on price with the major imports 
from third countries, then there is a strong likelihood that such exports would be made 
at dumped prices.  

D. 

DEFINITION OF THE UNION INDUSTRY 

(52)  During the RIP, the like product was produced by two producers in the Union, THA 
and  Cegasa,  who  cooperated  fully  in  the  investigation.  In  the  original  investigation, 
Cegasa,  which  at  that  time  did  not  produce for the open market but only for captive 
use, was not a complainant and did not cooperate but did not oppose the investigation. 

(53)  Following  disclosure,  an  interested  party  questioned  the  admissibility  of  Cegasa  as 
applicant  in  the  expiry  review  since  it  was  not  a  complainant  in  the  original 
investigation,  was  not  producing  for  the  open  market  and  thus  was  not  experiencing 
injury at that time. This claim was rejected as a request for an expiry review must be 
lodged by or on behalf of Union producers but not necessarily by (only) the original 
complainant(s). 

(54)  The  two  Union  producers  account  for  all EMD  production  in  the  EU,  and  constitute 
the  'Union  industry'  within  the  meaning  of  Article  4(1)  and  Article  5(4)  of  the  basic 
Regulation. 

(55)  For the purpose of the injury analysis, due to cooperation of the entire Union industry, 
all  injury  indicators  have  been  established  at  the  microeconomic  levels.  To  protect 
confidentiality, all data are presented in indexed form or given as ranges. 

E. 

SITUATION ON THE UNION MARKET 

1. 

Consumption in the Union market 

(56)  Union  consumption  was  established  on  the  basis  of  (i)  the  verified  sales  volumes  of 
the  Union  industry  on  the  Union  market,  (ii)  verified  import  volumes  from  the  sole 
South African producer and, (iii) imports from other countries based on Eurostat data. 

(57)  Union consumption of EMD remained stable between 2009 and the RIP. It increased 

in 2010 and 2011 but in 2012 it went back to the levels of 2009. 

Table 1 

2009 

2010 

2011 

Index (2009 = 100) 

100 

102 

108 

RIP 

100 

2. 

Imports from South Africa 

2.1. 

Volume and market share 

(58)  Following imposition of measures, imports from South Africa virtually ceased. 

Table 2 

2009 

2010 

2011 

RIP 

Volume of imports subject to measures 
from South Africa 

100 

2 

3 

1 

EN 

11 

   EN 

  
 
  
Market share of imports subject to 
measures from South Africa   

100 

2 

4 

1 

2.2. 

Prices and undercutting 

(59)  The very few sales of EMD from South Africa to the Union during the RIP were not 
undercutting the Union industry prices. However, in view of their very small volume, 
they cannot be relied upon to draw any meaningful conclusion.  

(60)  A comparison was therefore also made between the prices of EMD produced and sold 
by the Union industry and those of EMD produced in South Africa and sold to the rest 
of the world, based on two scenarios; including and excluding sales to the USA. The 
reason  for  carrying  out  an  analysis  excluding  Delta's  export  price  to  the  USA  was 
based  on  the  particular  market  situation  in  the  USA  resulting  in  very  high  prices  as 
compared to Delta’s export prices to other countries (see recitals above). 

(61)  The comparison showed that, during the RIP, sales from South Africa to the rest of the 
world  were  not  undercutting  the  Union  industry’s  prices  if  sales  to  the  USA  were 
taken into account , but were undercutting the Union industry’s prices if sales to the 
USA were excluded. In addition, excluding the sales to the USA, Delta’s export prices 
were also underselling the Union industry’s prices. 

(62)  Following  disclosure,  the  Union  industry  maintained  that  Delta’s  prices  to  the  USA 
are not indicative of its future pricing to the EU and that due to structural differences 
between the EU and the US market, such prices should be disregarded. On the other 
hand,  Delta  reiterated  that  the  US  market  is  a  mature  EMD  market  where  domestic 
producers  and  importers  compete  freely  and  where  there  are  many  users,  including 
users  which  are  also  present  in  the  EU.  As  a  consequence,  Delta’s  sales  to  the  USA 
should  not  be  excluded.  In  addition,  Delta  considered  that  for  the  purpose  of 
underselling  calculations,  the  Commission  should  have  not  used  the  target  profit 
achieved  by  the  Union  industry  in  the  absence  of  dumped  imports  in  the  original 
investigation. 

(63) 

(64) 

In  the  present  case  where  imports  from  the  country  concerned  virtually  ceased 
following imposition of original measures, the investigating authority has to carry out 
a  forward-looking  analysis  based  on  a  number  of  reasonable  assumptions,  including 
the  likely  price  at  which  Delta  would  sell  its  EMD  in  the  Union  should  the  anti-
dumping measures in force be allowed to lapse. 

It is an undisputed fact that each EMD market (USA, EU, Asia) is different and EMD 
producers  apply  different  pricing  stategies  bearing  in  mind  not  only  their  costs  of 
production but also the production capacity in the target country, the need to (re)gain 
market shares and the local conditions of competition. It is also an undisputed fact that 
Delta  is  pricing  its  EMD  sales  to  the  US  market  significantly  higher  than  in  other 
markets.  Therefore,  it  is  expected  that  Delta’s  future  prices  to  the  EU  will  not  be 
determined  by  its  current  prices  to  the  USA  but  will  follow  the  specific  EU  market 
conditions and realities.  

(65) 

In the disclosure document, for the purposes of dumping calculations, Delta’s selling 
prices  of  only  alkaline  grade  EMD  to  various  markets  were  compared  to  the 
constructed  normal  value,  whereas  for  the  purpose  of  undercutting  calculations  also 
Delta’s  sales  of  one  type  of  carbon  zinc  grade  were  taken  into  account.  Following 
disclosure, the Union industry commented that all Delta’s sales of alkaline and carbon 

EN 

12 

   EN 

 
zinc grade EMD should be taken into account for dumping and injury calculations. In 
contrast, Delta claimed that since the vast majority of Union consumption and Delta’s 
exports to the Union only consist of alkaline EMD, sales of carbon zinc grade EMD 
should not be taken into account at all. 

(66)  The Commission has reached the conclusion that both alkaline and carbon zinc grade 
EMD,  all  types  included,  should  be  taken  into  account  for  both  dumping  and  injury 
calculations, for the following main reasons: First of all, as mentioned above, there is 
also a market and consequently demand for carbon zinc grade EMD in the EU, albeit 
smaller  than  the  market  of  alkaline  grade  EMD,  and  this  market  could  also  be  of 
interest  for  Delta’s  exports  to  the  Union.  Secondly,  alkaline  grade  and  carbon  zinc 
grade EMD are manufacturerd in the same plant and in the same production line using 
the same raw material and the same production process. Depending on the settings of 
the  parameters  in  the  electrolysis  process  (current  density,  temperature,  electrolyte 
concentration  etc.),  EMD  producers  can  choose  to  produce  alkaline  or  carbon  zinc 
EMD. Therefore, it is more appropriate to calculate the undercutting by comparing the 
average export price of Delta’s EMD (both alkaline and carbon zinc) with the average 
selling price of the Union producers of EMD (both alkaline and carbon zinc).  

(67)  As far as the underselling analysis is concerned, the Commission used as a reference 
the target profit achieved by the Union industry in the absence of dumped imports in 
the  original  investigation,  which  corresponds  to  the  profit  that  a  capital  intensive 
industry such as the EMD manufacturers can expect to achieve in normal conditions of 
competition.  However,  the  issue  of  the  most  appropriate  target  profit  is  irrelevant  in 
the  context  of  this  particular  expiry  review.  Indeed,  the  Commission  acknowledges 
that there was no continuation of dumping and therefore there was no continuation of 
injury due to the undercutting. The focus of the analysis is therefore forward-looking 
and aims to predict the likelihood of recurrence of injury in case of likely recurrence of 
dumping. 

(68)  Delta claimed that post-importation costs appeared to be underestimated because they 
did  not  take  into  account  the  transport  costs  for  the  product  delivered  to  customers 
from the Antwerp port. 

(69)  However,  the  Commission  compared  the  Union  industry’s  prices  ex-work  with  the 
exporters’ price at Union borders, and therefore post-importation costs only concerned 
handling and testing but not transportation costs. This claim was therefore rejected. 

3. 

Imports from other third countries 

(70)  The  following  table  shows  the  development  of  imports  from  other  third  countries 
during  the  period  considered  in  terms  of  volume  and  market  share,  as  well  as  the 
average price of these imports.  

Table 3 

2009 

2010 

2011 

RIP 

Volume of imports from 
other countries (tonnes) 

5 000 –  

10 000 

10 000 –  

5 000 – 

15 000 

10 000 

5 000 – 

10 000 

 Index 2009=100 

100 

113 

92 

88 

Market share of imports 

25% - 30% 

30% - 35% 

20% - 25% 

20% - 25% 

EN 

13 

   EN 

 
  
from other third countries 

Values of imports from 
other countries (EUR) 

10m -15m 

15m-20m 

10m-15 m 

10m -15m 

Index 2009=100 

100 

113 

93 

102 

Price of imports 
(EUR/tonne) 

Source: Eurostat 

1 566 

1 572 

1 590 

1 809 

(71)  The  volume  of  imports  from  other  third countries  of  EMD  into  the  EU  decreased  in 
the period considered. Prices of these imports are above the average level of prices of 
the Union industry and Delta’s prices to other markets excluding the USA during the 
RIP.  As  mentioned  above,  the  value  of  1809  euros  per  tonne  is  an  average  of  very 
diverse  import  prices,  ranging  from  low  priced  imports  from  China  to  very 
expensively priced imports from USA. In particular, recorded price levels of imports 
from the USA are extremely high compared to any other price ranges from the Union 
producers,  Delta  and  other  exporters,  that  they  cannot  be  reasonably  relied  upon  to 
carry out the analysis. Therefore, this average cannot be taken as such as a reference 
price for future imports from South Africa. Delta would not compete on price with the 
US imports but with the Union industry prices. 

4. 

Economic situation of the Union industry 

(72)  Under Article 3(5) of the basic Regulation, all relevant economic factors and indices 
having a bearing on the state of the Union industry during the period considered were 
examined. 

(a)  Production 

(73)  The Union production increased by 6% between 2009 and the RIP. More specifically, 
it  increased  by  7  percentage  points  between  2009  and  2011  and  then  declined  by  1 
percentage point during the RIP.  

Table 4  

2009 

2010 

2011 

 Index 2009=100 

100 

102 

107 

ce: Questionnaire replies, Review request 

(b)  Production capacity and capacity utilisation 

RIP 

106 

(74)  The  production  capacity  of  the  Union  producers  increased  by  9%  throughout  the 
period considered, mainly due to minor improvements to the production process (i.e. 
no major investments in new plants or equipments). 

(75)  Since the increase in capacity was higher than the increase in production, the capacity 

utilisation went down by 3 percentage points. 

Table 5 

2009 

2010 

2011 

RIP 

EN 

14 

   EN 

 
  
  
Production Capacity  
Index 2009=100 

Capacity Utilisation  
Index 2009=100 

100 

103 

108 

109 

100 

99 

99 

97 

ce: Questionnaire replies, Review request 

(c)  Stocks 

(76)  Volume of stock remained stable during the period considered. It went down in 2011 

but returned to 2009 levels during the RIP. 

Table 6 

2009 

2010 

2011 

 Index 2009=100 

100 

103 

86 

RIP 

100 

Source: Questionnaire replies 

(d)  Sales volume 

(77)  The sales volume of the Union producers to unrelated customers on the Union market 
increased  by  10%  between  2009  and  the  RIP.  In  2011  it  increased  by  20%  in 
comparison  to  2009,  but  then  decreased  sharply  by  10  percentage  points  during  the 
RIP.  

Table 7  

2009 

2010 

2011 

 Index 2009=100 

100 

103 

120 

RIP 

110 

ce: Questionnaire replies, Review request 

(e)  Market share 

(78)  Between 2009 and the RIP the Union producers gained 10 percentage points in market 
share.  This  increase  in  market  share  is  explained  by  the  decline  in  market  share  of 
imports into the EU.  

Table 8 

2009 

2010 

2011 

RIP 

Market share of the 
Union industry 

65% - 70% 

65% - 70% 

75% - 80% 

75% - 80% 

 Index 2009=100 

100 

101 

111 

110 

ce: Questionnaire replies, Review request and Eurostat 

(f)  Growth 

(79)  Union consumption remained stable between 2009 and the RIP as set out in Table 1 
above. All other indicators do not show any significant growth in the Union market for 
the product under review. 

EN 

15 

   EN 

  
  
  
(g)  Employment 

(80)  The employment level of the Union industry shows a decrease of 9 percentage points 

between 2009 and the RIP. 

Table 9  

2009 

2010 

2011 

RIP 

 Index 2009=100 

100 

91 

90 

91 

ce: Questionnaire replies, Review request 

(h)  Productivity 

(81)  Productivity  of  the  Union  industry  workforce,  measured  as  output  (tonnes)  per 
employee  per  year,  increased  by  18%  in  the  period  considered.  This  reflects  that 
production  increased  by  6%,  whilst  employment  levels  decreased  by  9%.  This  is 
particularly obvious in 2011, when production increased while the employment level 
continued to decrease and productivity was 20 percentage points higher than in 2009. 

Table 10  

2009 

2010 

2011 

 Index 2009=100 

100 

112 

120 

RIP 

118 

Source: Questionnaire replies and Review request 

(i) 

Factors affecting sales prices 

(82)  The  annual  average  sales  prices  of  the  Union  industry  on  the  Union  market  to 

unrelated customers decreased by 11% between 2009 and the RIP. 

Table 11  

2009 

2010 

2011 

RIP 

 Index 2009=100 

100 

95 

93 

89 

ce: Questionnaire replies, Review request 

(j)  Magnitude of dumping margin and recovery from past dumping 

(83)  As  imports  from  South  Africa  virtually  ceased  after  imposition  of  the  anti-dumping 
measures in force, the magnitude of dumping margins cannot be assessed. However, in 
light  of  the  key  economic  indicators  referred  to  above  as  well  as  further  below,  the 
Union industry was found to be still in a fragile and vulnerable situation.  

(k)  Wages 

(84)  Despite the fact that the total labour cost decreased the average labour cost increased 
during  the  period  considered  as  a  consequence  of  the  reduction  of  the  overall 
workforce. 

Table 12 

2009 

2010 

2011 

RIP 

EN 

16 

   EN 

  
  
  
 
  
 Index 2009=100 

100 

102 

103 

103 

Source: Questionnaire replies 

(l) 

Profitability and return on investments 

(85)  During the period considered, the profitability of the Union industry’s sales of the like 
product on the Union market to unrelated customers, expressed as a percentage of net 
sales,  halved  between  2009  and  the  RIP.  The  profitability  during  the  RIP  is 
significantly  lower  than  the  target  profit  established  in  the  original  investigation, 
which was set at the level of the profit  achieved by the Union industry in the absence 
of injurious dumping. 

(86)  The  return  on  investments  (ROI),  expressed  as  the  profit  in  percent  of  the  net  book 

value of investments, broadly followed the profitability trend. 

Table 13 

2009 

2010 

2011 

RIP 

Profitability of Union Industry 

5% -10% 

5% - 10% 

5% - 10% 

0% - 5% 

Index 2009=100 

100 

63 

63 

50 

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

15% - 20% 

5% - 10% 

10% - 15% 

5% - 10% 

Index 2009=100 

100 

64 

84 

51 

Source: Questionnaire replies 

(m)  Cash flow and and ability to raise capital 

(87)  The  net  cash  flow  from  operating  activities  dropped  considerably  over  the  period 

considered, although it remained positive, except for the year 2010. 

Table 14 

2009 

2010 

2011 

RIP 

 Index 2009=100 

100 

- 34 

71 

10 

Source: Questionnaire replies 

(88)  There are no indications that the Union industry would have encountered difficulties in 
raising  capital  if  it  had  tried  to,  but  there  were  no  significant  investments  during  the 
period under consideration and therefore the Union industry was not ‘put to the test’. 

(n) 

Investments 

(89)  The  Union  industry  annual  investments  in  the  production  of  the  like  product  almost 
halved between 2009 and the RIP. More specifically, it decreased in 2010, increased in 
2011  and  decreased  again  during  the  RIP.  The  sharp  drop  in  investments  observed 
between  2011  and  the  RIP  can  be  partially  explained  by  the  fact  that  the  Union 
industry had already during the period considered achieved their necessary scheduled 
main investments. 

EN 

Table 15 

17 

   EN 

  
  
2009 

2010 

2011 

RIP 

 Index 2009=100 

100 

45 

115 

52 

Source: Questionnaire replies 

5. 

Conclusion on the situation of the Union industry 

(90)  The  analysis  of  the  economic  indicators  shows  that  the  Union  industry  increased  its 
production and sales during the period considered. However, the observed increase in 
quantity, which was not significant as such, should be seen in the context of increased 
production  capacity  and  decrease  in  selling  prices,  which  resulted  in  the  Union 
producers’ capacity utilisation and unit selling price dropping respectively by 3 and 11 
percentage points. 

(91)  At the same time the economic situation of the Union industry showed a deterioration 
in  terms  of  profitability,  return  on  investment,  employment  and  cash  flow.  In 
particular, the profitability, which is an important indicator of the status of the Union 
industry,  is  still  significantly  below  the  target  profit  as  established  in  the  original 
investigation. The Union industry has not yet fully recovered from the effects of past 
dumping, and is still in a fragile situation, and thus very vulnerable to any recurrence 
of dumped imports. Average sales prices have decreased over the years and would in 
all likelihood decrease further if dumped imports from South Africa were to reoccur, 
thus exacerbating the already fragile situation of the Union industry. 

(92)  Following  disclosure,  certain  interested  parties  claimed  that  the  current  fragile  and 
vulnerable  situation  of  the  Union  industry  was  neither  due  to  dumped  imports  from 
South Africa nor due to the effects of past dumping. 

(93)  They noted that the trends of the key economic indicators shown above concerned a 
period (from 2009 to the end of the RIP) where: (i) the original anti-dumping measures 
had  already  been  in  force  for  a  while;  (ii)  imports  from  South  Africa  had  virtually 
ceased;  and  (iii)  a  new  player  (Cegasa)  entered  the  open  Union  market.  Interested 
parties  looked  at  the  economic  indicators  of  each  of  the  two  Union  producers 
separately, instead of aggregating them, and concluded that the Union industry was in 
a difficult situation due to newly experienced internal competition among the only two 
Union producers in the market. 

(94) 

In  particular,  these  interested  parties  claimed  that  the  Commission  had  failed  to 
acknowledge  the  fundamental  changes  occurred  in  the  Union  industry  since  2009. 
They  noted  that  following  imposition  of  the  anti-dumping  measures  in  force  the 
economic  indicators  of  the  original  and  only  complainant  (THA)  improved 
dramatically,  thus  removing  all  negative  effects  of  the  past  dumping.  However, 
subsequently, the other Union producer, Cegasa, which was previously manufacturing 
EMD only for captive use, relocated its battery production facility outside the Union. 
As  a  consequence,  it  freed  a  significant  amount  of  EMD  for  the  open  market,  and 
started selling it at a low price, thus competing with the only other Union producer and 
exerting a strong downward pressure on prices, capacity utilisation and profitability. 

(95) 

In the disclosure document, the Commission had already acknowledged the change in 
the  configuration  of  the  Union  industry  compared  to  the  original  investigation.  This 
has been a positive development which shows market openess and an increased level 
of competition among the various players including imports. 

EN 

18 

   EN 

  
(96)  The  Commission  also  agrees  that  under  these  circumstances  and  notably  in  the 
absence of imports from South Africa the current state of the Union industry cannot be 
due to the dumping from South Africa and should not be qualified as ‘continuation of 
injury’. 

(97)  The  Commission  has  examined  the  aggregate  trends  of  both  Union  producers  since 
2009 and has concluded that the key economic indicators are not favourable and that 
the  Union  industry  is  in  a  fragile  and  vulnerable  state.  Clearly,  in  the  absence  of 
imports  from  South  Africa  the  reason  cannot  be  the  dumping  practices  of  Delta. 
However,  in  an  expiry  review  where  the  focus  is  on  the  likelihood  of  recurrence  of 
dumping and injury should the measures lapse, dumping, injury and causation during 
the RIP are not the determining factors of the analysis. 

(98)  The Commission concludes that the Union industry is still in a fragile and vulnerable 
situation  and  its  profitability  is  far  from  the  levels  that  could  be  expected  in  such  a 
capital  intensive  industry.  A  comparison  with  the  original  investigation  can  only  be 
made for one Union producer, as the other did not sell on the open Union market at 
that  time.  For  that  Union  producer,  profits  in  the  RIP  were  significantly  lower  than 
found in the original investigation in the absence of dumped imports. 

F. LIKELIHOOD OF RECURRENCE OF INJURY 

1. 

Impact  of  the  projected  volume  of  imports  and  price  effects  in  case  of  repeal  of 
measures 

(99)  The  only  known  South  African  producer  (Delta)  of  EMD  has  spare  capacity  and  a 
potential to restart exporting to the Union market in significant quantities. During the 
original  period  considered  (2002  to  2005/6)  the  market  share  of  Delta  increased 
strongly from around 30-40% to 60-70%. Delta has thus already shown its capability 
to rapidly increase export volumes to the Union.  

(100)  The CIF export prices of Delta to the other markets, excluding the USA and including 
all types and all grades of EMD, were lower than the prices of the Union industry in 
the RIP and undercut them. Lower prices on the other markets could be an incentive 
for Delta to divert these exports to the EU market should the measures lapse. 

(101)  Given  the  spare  capacity  identified  during  the  investigation,  the  saturation  of  other 
export markets combined with the attractiveness of the Union market, Delta would in 
all  likelihood  try  to  regain  its  substantial  market  share  in  the  Union  which  was  lost 
after  imposition  of  the  measures  in  force.  As  concluded  above,  for  Delta  to  regain 
market share it would need to export at dumped prices. Consequently, in the absence 
of anti-dumping duties on imports of EMD originating in South Africa, any recurrence 
of  dumped  imports  would  exercise  an  even  stronger  price  pressure  on  the  Union 
industry and in all likelihood cause material injury. 

2. 

Conclusion on the likelihood of recurrence of injury 

(102)  The  repeal  of  the  measures  would  in  all  likelihood  result  in  a  recurrence  of  dumped 
imports from South Africa resulting in a downwards pressure on Union industry prices 
and  a  worsening  of  its  economic  situation.  The  repeal  of  measures  against  South 
Africa  would  therefore  likely  result  in  a  recurrence  of  injury  due  to  the  likely 
exacerbation  of  the  already  fragile  and  vulnerable  situation  in  which  the  Union 
industry was currently found to be. 

1. 

Introduction 

G. UNION INTEREST 

EN 

19 

   EN 

(103)  Under  Article  21  of  the  basic  Regulation,  the  Commission  examined  whether 
maintaining the existing anti-dumping measures against South Africa would be against 
the  interest  of  the  Union  as  a  whole.  The  determination  of  the  Union  interest  was 
based on an appreciation of all the various interests concerned.  

(104)  All interested parties were given the opportunity to make their views known pursuant 

to Article 21(2) of the basic Regulation.  

(105)  In  the  original  investigation  the  imposition  of  measures  was  considered  not  to  be 
against  the  interest  of  the  Union.  As  this  investigation  is  a  review,  it  analyses  a 
situation  in  which  anti-dumping  measures  have  already  been  in  place,  thereby 
allowing the assessment of any undue negative impact on the parties concerned by the 
current anti-dumping measures. 

(106)  Despite  the  conclusions  on  the  likelihood  of  recurrence  of  injurious  dumping,  the 
Commission  examined  whether  compelling  reasons  existed  which  would  lead  to  the 
conclusion that it is not in the Union interest to maintain measures against imports of 
EMD originating in South Africa. 

2. 

Interest of the Union industry and other Union producers 

(107)  Although  the  anti-dumping  measures  in  force  prevented  dumped  imports  from 
entering  the  Union  market,  the  Union  industry  is  still  in  a  fragile  and  vulnerable 
situation, as confirmed by the negative trends of some key injury indicators. 

(108)  Should  the  measures  be  allowed  to  lapse,  it  is  likely  that  the  current  situation  of  the 
Union  industry  will  continue  and  further  deteriorate  given  the  likely  influx  of 
substantial  volumes  of  dumped  imports  from  South  Africa.  This  influx  would  cause, 
amongst  others,  loss  of  market  share,  decrease  in  sales  price,  decrease  in  capacity 
utilisation  and  in  general  a  serious  deterioration  of  the  Union  industry's  financial 
situation. 

(109)  It  is  therefore  clear  that  the  maintenance  of  anti-dumping  measures  against  South 

Africa would not be against the interest of the Union industry. 

3. 

Interest of importers 

(110)  In the original investigation it was found that the impact of the imposition of measures 
was  not  likely  to  have  a  serious  negative  effect  on  the  situation  of  importers  in  the 
Union. No traders/importers cooperated in the current investigation. Bearing in mind 
that  there  is  no  evidence  suggesting  that  the  measures  in  force  have  considerably 
affected  importers,  it  can  be  concluded  that  the  continuation  of  measures  will  not 
negatively affect the Union importers to any significant extent. 

4. 

Interest of users 

(111)  All  known  users  of  EMD  in  the  Union  (used  by  battery  producers  as  raw  material) 
were  contacted.  Replies  were  received  from  two  companies  belonging  to  the  same 
multinational  group.  In  the  original  investigation  two  additional  battery  producers 
cooperated, which opposed the imposition of measures. 

(112)  The  cooperating  user  explained  the  difficult  economic  situation  faced  by  battery 
producers in the Union due to the downward pressure on prices exerted by their main 
customers  (retailers),  and  the  consequent  risk  of  loss  of  jobs.  However,  it  could  not 
provide  any  explanations  or  arguments  as  to  why  and  how  the  termination  of  the 
measures against imports of EMD from South Africa would improve the situation. 

EN 

20 

   EN 

(113)  EMD accounts for only 10-15% of the total cost of production of batteries. This value 
decreased compared to the original investigation. In addition, following imposition of 
measures, the average sales price of EMD in the Union actually decreased. In reality, 
no evidence was provided that maintaining the measures in force would have a non-
negligible influence on the costs of production of battery producers. 

(114)  In  the  absence  of  such  evidence,  the  Commission  concludes  that  maintaining  the 

measures would not unduly affect the EMD users. 

(115)  Following  disclosure,  the  same  user  disagreed  with  the  Commission’s  assessment  of 
the  situation  and  commented  that  following  imposition  of  measures  one  source  of 
good quality EMD disappeared, prices for EMD increased and even if EMD accounts 
for only 10-15% of the production costs this has a a significant impact on the already 
small profitability of EU battery producers. 

(116)  Notwithstanding the claim, the evidence in the file shows that the user’s choice not to 
make use of Delta’s EMD was not linked to the imposition of anti-dumping duties and 
that the threat to the user’s profitability and jobs is not an increase in EMD price but is 
in fact the downward pressure on price exerted by their main customers (multinational 
retailers with significant purchasing power) and by Chinese battery producers.  

(117)  The same user of EMD commented that the measures should not be maintained, as the 
investigation found no dumping to the EU during the RIP and that there was no risk of 
recurrence of dumping due to the small market share possible for Delta if all its spare 
capacity was directed to the Union. 

(118)  This argument was rejected as Delta's potential market share identified would clearly 

be significant and these exports to the Union would likely be made at dumped prices. 

5. 

Future developments 

(119)  The  complainants  mentioned  in  the  request  for  an  expiry  review  that  if  demand  for 
electric  cars  increases  in  the  EU  in  the  future,  there  will  be  an  upstream  increase  in 
demand  for  EMD  which  is  said  to  be  the  raw  material  most  frequently  used  in  the 
production  of  lithium  manganese  oxide  (LMO)  which  in  turns  serves  as  cathode 
material for rechargeable lithium ion batteries (LIB) used in many models of electric 
vehicles. They claim that if injury from dumped South African imports re-occurs, the 
Union EMD industry may not be around to service this potential future demand in new 
technologies. 

(120)  The investigation did not find conclusive evidence in support or against the claim that 
any future development in the electric car sector would significantly impact the EMD 
industry  and  the  demand  for  EMD.  However,  it  is  a  fact  that  the  Union  industry  is 
testing the feasibility of manufacturing LMO using EMD, is able to obtain the know-
how and the equipment to do so in the future and is participating in a number of EU 
funded projects related to the research and development of lithium-ion batteries.  

(121)  Following disclosure, this issue was briefly mentioned by some interested parties, but 
again  no  conclusive  evidence  was  provided  on  the  possible  impact  of  any  future 
development  in  the  electric  car  sector  in  the  Union  and/or  in  other  markets  on  the 
product concerned. 

6. 

Conclusion on Union interest 

(122)  Given the evidence above, there are no compelling reasons against the maintenance of 

the current anti-dumping measures. 

EN 

21 

   EN 

(123)  Therefore  under  Article  11(2)  of  the  basic  Regulation,  the  anti-dumping  measures 
applicable  to  imports  of  certain  electrolytic  manganese  dioxides  originating  in  South 
Africa should be maintained for an additional period of five years, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

A  definitive  anti-dumping  duty  is  imposed  on  imports  of  electrolytic  manganese 
dioxides (i.e. manganese dioxides produced through an electrolytic process) not heat-
treated after the electrolytic process, currently falling within CN code ex 2820 10 00 
(TARIC code 2820 10 00 10) and originating in the Republic of South Africa. 

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

Company  

Anti-Dumping 
Duty 

TARIC Additional 
Code 

Delta E.M.D. (Pty) Ltd. 

All other companies 

17,1% 

17,1% 

A828 

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 

EN 

22 

   EN