CELEX: 51993PC0447
Language: en
Date: 1993-10-01
Title: Proposal for COUNCIL REGULATION (EEC) imposing amended anti- dumping measures on imports of ferro-silicon originating in Russia, Kazakhstan, Ukraine, Iceland, Norway, Sweden, Venezuela and Brazil

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                 ( O M ( ^ ) 447 final
                                                 Brussels,     1 October 1993
                                 Proposal for
                       COUNÇ;iL RJEGULATJONiJEliQ
     imposing amended anti-dumping measures on imports of ferro-silicon
             originating in Russia, Kazakhstan, Ukraine, Iceland,
                   Norway, Sweden, Venezuela and Brazil
                        (presented by the Commission)
 ---pagebreak---                          FXPLANATORY MEMORANDUM
1. In a notice published in Official Journal No C I 15 of 6 May l(>92, the Commission
   announced a review, in accordance with Articles 14 and 15 of Council Regulation
   (IIX ) No 2423/88, of the anti-dumping measures imposed on imports of ferro-silicon
   into the Community originating in Norway, Iceland, Sweden, Venezuela, Brazil, the
   Republics of the former USSR and the former Yugoslavia
2  The Commission carried out its investigation in the period between I January 1991 and
   M) April 1992.
V  Normal value has been constructed for Norway, Iceland and Venezuela, since there
   were not enough representative sales on their respective domestic market.
   For Brazil, because of the endemic inflation, normal value was determined on a
   monthly basis, either by reference to domestic sales or, where necessary, by reference
   to a constructed value when domestic puces did not permit recovery of all costs
   For Kazakhstan, Ukraine and Russia, which are considered as non-market economy
   countries, Norway was selected as analogous country No objection was raised by the
   exporters The normal value has been constructed on the basis of the Norwegian costs
   of production
   No dumping has been calculated for the Republics of the former Yugoslavia, since the
   contribution to injury was minimal.
4. The comparison between normal value and export price to the Community showed
   dumping margins for Brazil ranging from 9.2% to 25%, Venezuela 20.4%, Norway and
   Iceland 6.8%, Sweden 7.4%, Ukraine, Kazakhstan and Russia 74%.
                                  j
                                  I
                      )             \
 ---pagebreak--- 5. As far as injury is concerned, investigations sought to determine whether there had been
   any changes in the situation of the Community industry as a result of the behaviour of
   the exporters on the Community market since the imposition of the anti-dumping
   measures under review Furthermore, the Commission also examined whether the expiry
   of existing anti-dumpmg measures would be likely to lead to recurrence of injury
   The investigation showed that the present situation of the Community, falling sales, loss
   of market shares and financial losses meant that protection was still required against
   dumped imports originating in the abovementioned countries It was found that the
   measures under review had not prevented the undercutting of Community producer's
   price by the dumped imports. Under these circumstances, the lifting of the anti-dumpmg
   measures in force could not be justified.
6. With respect to Community interests, the removal of the unfair advantages gained by
   the dumping practices is designed to prevent the further decline of the Community
   industry and thus helps to maintain the availability to the consumer of widest possible
   choice of producers
    There is also evidence, given the negligible part of ferro-silicon in the steel production,
   that the consumer prices would not be significantly affected by the continuation of the
   measures.
7. Accordingly, the anti-dumping measures should be maintained and adjusted in the light
   of the results of the review.
 ---pagebreak--- 8. Since the injury thresholds were higher than the dumping margins, the duties sliould be
   based on the dumping margins found, which are:
             Norway                                           6.8%
             Iceland                                          6.8%
             Sweden                                           7.4%
             Venezuela                                       20.4%
             Brazil                                            9.2% to 25%
             Russia, Ukraine and Kazakhstan                  74%
 ---pagebreak---                                         Proposal for a
                              COUNÇIL REGUJLAT 1 ON {EEC)
           imposing amended anti-dumping measures on imports of ferro-silicon
                     originating in Russia, Kazakhstan, Ukraine, Iceland,
                           Norway, Sweden, Venezuela and Brazil
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
 Having regard to Council Regulation (EEC) No 2423/88 of I I July 1988 on protection against
dumped or subsidized imports from countries not members of the European Economic
Community"', and in particular Articles 14 and 15 thereof,
 Having regard to the proposal from the Commission, presented after consultations within the
Advisory Committee as provided for by the Regulation,
Whereas:
A     PROCEDURE
(1)   By Regulation (EEC) No 2409/87'"', the Commission imposed a provisional anti-
      dumping duty on imports of ferro-silicon         originating in Brazil and accepted
      undertakings offered by a Brazilian company and by Promsyrio-Import of the USSR
(2)   By Regulation (EEC) No .1650/87"', the Council imposed a definitive anti-dumping
      duty on imports of ferro-silicon originating in Brazil.
«it
      OJ No I. 209, 2 8 1988, p I
(.M
      OJ No L 219, 8 8 1987, p. 24
(u
      OJ No L 343, 5.12 1987, p I.
 ---pagebreak--- (3)   In February      1990, the Council, by Regulation         (EEC)    No 341/90",     accepted
      undertakings and imposed a definitive anti-dumping duty on imports of ferro-silicon
      originating in Iceland, Norway, Sweden, Venezuela and Yugoslavia, except ferro-silicon
      sold for export to the Community by companies whose undertakings had been accepted
(4)   By Regulation (EEC).No 1115/91°', the Council imposed a definitive anti-dumping
      duty following the review of anti-dumping measures concerning imports of ferro-silicon
      originating in Brazil.
       By Decision 91/240/EEC'"', the Commission accepted undertakings offered by certain
      exporters following the review of anti-dumping measures concerning imports of ferro-
       silicon originating in Brazil and terminated the investigation as far as those exporters
       were concerned.
 (5)   In February 1992, the Commission published a notice' 7 ' of the impending expiry of the
       undertaking accepted from the Soviet company, Promsyrio-Import, in accordance with
       Article 15 of Regulation (EEC) No 2423/88 (hereinafter referred to as "the Basic
       Regulation").
 (6)   In its request lodged in February 1992, the Liaison Committee of Ferro-Alloys
       Industries in the European Community (CLIFA), which acts on behalf of Community
       producers and represents, allegedly, 98% of the Community's ferro-silicon production,
       asked for a review of all the abovementioned measures (recitals I to 4).
 (7)   Having decided, after consultation, that there was sufficient evidence to justify a review,
       the Commission decided to institute a review of the Regulations and Decisions
       mentioned in recitals (1) to (4) in accordance with Articles 14 and 15 of the Basic
       Regulation, and opened an investigation by a notice published in May 1992(8).
 (•ii
       OJ   No L 38, 10 2 1900, p. I
       OJ   No I. ill, 3.5 1991, p. |.
       OJ   No L III, 3.5.1991, p. 47.
 (/)
       OJ   No C 37, 15.2.1992, p. 22.
 (K)
       OJ   No C 115, 6.5.1992, p. 2.
 ---pagebreak--- (K)  In August 1992, in accordance with the provisions of Article 15(4) of the Basic
     Regulation, the Commission published a notice' ' concerning the continuation, during
     the review proceeding, of the anti-dumping measures in force against the former
     Soviet Union.
(9)   Ihe Commission officially notified the exporters and the Community producers known
     to be concerned of the opening of the proceeding and gave them the opportunity to
     make known their views in writing and to request a hearing.
(10) Furthermore, the Commission, at the request of an importer and in accordance with the
     provisions of Article 7(6) of the Basic Regulation, gave the parties directly concerned
     an opportunity to meet
(11) The Commission sought and verified all information it considered necessary for a
     determination of dumping and injury and carried out investigations at the premises of
     the following
     (a) Community producers
               Sociedad Espanola de Carburos Metâlicos, Spain
               Péchiney Electrométallurgie, France
               SKW Trostberg AG, Germany
     (b) Exporting producers
               Fesil KS, Norway
               Elkcm A/S, Norway
               Icelandic Alloys, Iceland
               Vargon Alloys, Sweden
               CVG Fesilven, Venezuela
               Companhia Brasileua Carbureto de Câlcio (CIJCC), Brazil
               Companhia de Ferroligas da Bahia Ferbasa, Brazil
               Italmagnésio SA, Brazil
               Companhia Paulista de Ferroligas, Brazil
               Tovarna Dusika Ruse, Slovenia
     OJ No C 186, 23 7 1992, p 25.
 ---pagebreak---       (c) Unrelated importers
                Considar, Belgium
                S.A. des Minerais, Luxembourg
      (d) Related importers
                Elkem GmbH, Germany
                Elkem Alloys Ltd, UK
                Fesil Alloys Ltd, UK
                Fesil GmbH, Germany
(12) The Commission requested and received submissions from the complainants, from the
      exporters named and from a number of related and unrelated importers and verified the
      information provided to the extent considered necessary
(I J)  Ihe exporters, telated importers, one unrelated impoitei and the complainant industry
      requested and were informed of the essential facts and considerations on the basis of
      which it was planned to recommend the imposition of amended anti-dumping duties.
      Due account was taken of the representations of the parties concerned in the findings
      of the Commission.
(14)   Ihe investigation into dumping practices covered the period from I January 1991 to
      30 April 1992
B      PRODUCT
(15) Product description
      The product under investigation is ferro-silicon containing between 20% and 96% of
      silicon by weight and exported by the countries under review, falling within CN codes
      7202 21 90, 7202 21 10 and ex 7202 29 00.
 ---pagebreak--- (16) An exporter and an importer claimed that the physical characteristics of frequently
     traded grades of ferro-silicon, namely ferro-silicon containing 45% of silicon and ferro-
     silicon containing 75% of silicon, are substantially different as far as chemical
     composition, gravity, weight, bulk, density, colour, hardness and chill-factor are
     concerned and that their metallurgical properties are not the same. They also asserted
     that the production process for the two types of products requires different production
     facilities and therefore leads to differences in classification, handling, consumption,
     supply and pricing.
     Furthermore, (hose two parties pointed out that ferro-silicon containing 4 5 % of silicon
     is not interchangeable with ferro-silicon containing 75% of silicon. For all these
     reasons, ferro-silicon containing 45% of silicon should, they claimed, be excluded from
     the proceeding.
(17) in that respect, the Commission recalls that where the product concerned consists of
     several grades or qualities, the question as to whether those different types of product
     have to be regarded as forming one product has to be answered on the basis of the
     physical or chemical characteristics and uses of those grades or qualities.
(18) The investigation has shown that both ferro-silicon containing 45% and that containing
     75% of silicon have the same basic physical and chemical characteristics. In addition,
     they are interchangeable in their main applications as a deoxidiser m steel manufacture
     and/or as an alloying component for high-temperature steel alloys and sheet metal and
     have therefore to be regarded as forming one product for the purpose of this proceeding.
(19) Like product
     The Commission established that the ferro-silicon produced in the Community and the
     ferro-silicon sold or produced in Brazil, Venezuela, Iceland, Norway, Sweden and the
     Republics of the former Yugoslavia are alike in all respects to the product concerned
     as exported from the countries concerned by this proceeding.
(20) The Council confirms those findings.
 ---pagebreak--- C    NORMAL VALUE AND EXPORT PRICE
I.   Norway
(a)  Normal value
(21) The Norwegian producers formed part of two separate corporate groups and sold
     through related sales companies which exported most of their merchandise to related
     importers in the Community.
(22) In no case did the volume of sales on the Norwegian domestic market attain 5% of the
     volume of exports of the product to the Community, which has consistently been
     considered by the Commission to be a minimum representative volume for comparison.
(23) Normal value for the Norwegian producers has therefore been calculated in accordance
     with Article 2(3)(b)(ii) of the Basic Regulation It has been constructed on the basis of
     the fixed and variable raw material and manufacturing costs for the product exported
     to the Community, together with a reasonable amount for selling, administrative and
     other general costs, as well as a reasonable margin of profit As regards each of the two
     Norwegian groups, a weighted average of the manufacturing costs of their producing
     subsidiaries was calculated.
     Since there were, in both cases, no domestic sales in representative quantities of ferro-
     silicon or of products in the same business sector, the selling, general             and
     administrative costs and profit were established on the basis of data available to the
     Commission concerning this product sector in Norway. This basis was considered
     reasonable and thus in accordance with Article 2(3)(b)(ii) of the Basic Regulation.
     A profit margin of 6% was added to the full costs of the product. That profit was in
     line with the profit considered necessary for the Community industry to remain viable
(b)  Export price
(24) Where sales were made direct to independent importers in the Community, export
     prices were determined on the basis of the prices actually paid or payable for the
     product sold for export to the Community
 ---pagebreak--- (25) Where exports were made to related importers in the Community, export prices were
     constructed in accordance with Article 2(8)(b) of the Basic Regulation on the basis of
     resale prices to the first independent purchaser, adjusted to take account of all costs
      incurred between importation and resale, together with a 3% profit margin which was
     considered reasonable in view of the information available to the Commission on the
     product sector concerned
2     Iceland.
(a)  Normal., value
(26) Since there were no sales of ferro-silicon on the domestic Icelandic market, normal
     value was constructed in accordance with Article 2(3)(b)(ii) of the Basic Regulation.
     As far as selling, general, administrative expenses and profit were concerned, the
     situation was the same as for Norway and the determination was therefore made on the
     same basis (see recital 23)
(b)   Export price
(27) The sole producer in Iceland, Icelandic Alloys Ltd, channelled its sales to the
     Community through a Norwegian group which has a significant shareholding in this
     producer (see recital 21 ).
(28) Therefore, in order to achieve comparability between the normal value and export price,
     the latter had to be constructed on the basis of the price at which the product concerned
     was resold by the Norwegian company to independent Community customers, as
     provided for by Article 2(8)(b) of the Basic Regulation          In accordance with that
     provision, allowance was made for an estimated margin of 3 % arising from profits
     realized on sales on the sector concerned
-*   Sweden
(a)  Normal value
(29) Domestic sales of the Swedish producer exceeded 5% of exports to the Community and
     therefore represented a volume sufficient to constitute a representative market and an
     adequate basis for calculating the normal value.
 ---pagebreak--- (30) Normal value has therefore been calculated on the basis of the weighted average
     domestic prices for ferro-silicon sold on the domestic market at prices made in the
     ordinary course of trade, in accordance with Article 2(3)(a) of the Basic Regulation
(31) The prices were net of all discounts and rebates directly linked to the sales under
     consideration.
(b)  Export price
(32) Since all exports were made direct to independent importers in the Community, export
     prices were determined on the basis of the prices actually paid or payable for the
     product sold for export to the Community.
4.   Venezuela
(a)  Normal value
(33) Domestic sales of the Venezuelan producer exceeded 5% of exports to the Community
     and therefore represented a volume sufficient to constitute a representative market and
     an adequate basis for calculating the normal value.
(34) 70% of the sales on the domestic market were sold to related companies for processing
     and could not be considered reliable and made m the ordinary course of trade. The
     remaining sales were made at prices which did not permit the recovery in the normal
     course of trade of all costs reasonably allocated        Normal value was therefore
     constructed in accordance with Article 2(3)(b)(ii) of the Basic Regulation.
     Given the volume of domestic sales, the Commission was in a position to calculate the
     selling, general and administrative expenses by reference to the expenses incurred by
     the producer on its sales on the domestic market
     A profit margin of 6% on the total costs of production was considered reasonable
     (see recital 23)
                                            12
 ---pagebreak--- (b)  Export price
(35) Since sales were made direct to independent importers in the Community, export prices
     were determined on the basis of the prices actually paid or payable for the product sold
     for export to the Community.
5    Brazil
(a)  Normal value
(36) Domestic sales of all the Brazilian producers exceeded 5% of export sales to the
     Community and therefore represented a volume sufficient to constitute a representative
     market and an adequate basis for calculating the normal value
(37) In view of the significant price variations which are the result of the high inflation in
     Brazil, normal value was determined on a monthly basis, either by reference to
     domestic sales or, where necessary, by reference to the constructed value as defined
     hereafter.
(38) The Commission examined whether the domestic sales had been made in the ordinary
     course of trade, by comparing each domestic transaction with the production cost per
     tonne of each producer during the same monthly period.
     During the months when sales were considered profitable,           normal values were
     determined for that month, on the basis of the domestic prices in accordance with
     Article 2(3)(a) of the Basic Regulation
     In all other cases, normal value was constructed in accordance with Article 2(3)(b)(ii)
     of the Basic Regulation.
     Given the volume of domestic sales the Commission was in a position to calculate the
     selling, general and administrative expenses by reference to the expenses incurred by
     the producer on its sales on the dome tic market A profit margin of 6% was also added
     (see recital 23).
                                             13
 ---pagebreak--- (b)  Export price
(39) Since sales were made direct to independent importers in the Community, export prices
     were determined on the basis of the prices actually paid or payable for the product sold
     for export to the Community.
6.   Kazakhstan, Ukraine, Russia
(a)  Normal value
(40) On the basis of the information available to the Commission, of the countries of the
     former USSR, production facilities for ferro-silicon existed only in Kazakhstan, Ukraine
     and Russia It was, however, not possible to distinguish the products by origin since
     they were exported to the Community by a Russian trader which made no such
     distinction.
     Since all three countries are State-trading countries within the meaning of Article 2(5)
     of the Basic Regulation, normal value was based on information obtained from a market
     economy in which the product was manufactured.
     For this purpose, the Commission chose Norway. The choice was not questioned by the
     producers in the three countries concerned. The Norwegian ferro-silicon industry
     reported high production volumes and low production costs and appeared, by
     comparison with all other known producing countnes, to be an efficient producer given
     the ease of access to hydroelectrical power, the most costly input in the production of
     ferro-silicon.  Norway    was therefore    considered to be an appropriate and not
     unreasonable choice of analogous market.
(41) Normal value for Norway was established as explained in recital 23.
(b)  Export prices
(42) The producers from Ukraine and Russia did not cooperate, while the questionnaire
     completed by the producer from Kazakhstan was found to be inaccurate as far as export
     prices were concerned and the information contained therein could therefore not be
     used.
                                              14
 ---pagebreak---      The Commission verified more than 70% of the total imports made through the trading
     organization, Promsyrio-Import, which represented producers in Kazakhstan, Ukraine
     and Russia This quantity was considered representative of all transactions of the
     producers in Kazakhstan, Ukraine and Russia during this period.
     Accordingly, export prices were determined on the basis of the prices to the first
     independent buyer.
£>•   COMPARISON
(43) For each country concerned, in comparing the normal value with export prices,
     transaction by transaction, the Commission, in accordance with Article 2(9) and 2(10)
     of the Basic Regulation, took account, where warranted, of the differences directly
     affecting price comparability, such as certain selling expenses, namely credit terms,
      transport, insurance and handling costs, packing and ancillary costs.
     For Kazakhstan, Ukraine and Russia, an allowance was made for differences in physical
     characteristics, in particular screening, crushing and weighing. Normal value for all
     three countries was adjusted, since the alleged difference was substantiated, by an
     amount based on a reasonable estimate of the value
(44)  All comparisons were made at the same level of trade
K    DUMPING MARGINS
(45) The margins of dumping equalled the amount by which the normal value established
     exceeded the price for export to the Community.
 I    Norway
(46) The weighted average dumping margin for the companies Elkem and Fesil, expressed
     as a percentage of the CIF-Commumty-frontier prices, customs duty unpaid, was 6 8%
(17) Since it was established that those two companies were responsible for all exports of
     ferro-silicon of Norwegian origin to the Community, it was considered appropriate that
     the above margin should be applicable to Norway as a whole
                                              15
 ---pagebreak---      Iceland
(48) The weighted average dumping margin for the company concerned, expressed as a
     percentage of the CIF-Community-frontier prices, customs duty unpaid, is 6.8%.
(49) Since it was established that the company was responsible for all exports of ferro-
     silicon of Icelandic origin to the Community, it was considered appropriate that the
     above margin should be applicable to Iceland as a whole.
3.   Sweden
(50) The weighted average dumping margin for the company concerned, expressed as a
     percentage of the CIF-Community-frontier prices, customs duty unpaid, is 7,4%.
(51) Since it was established that the company was responsible for all exports of ferro-
     silicon of Swedish origin to the Community, it was considered appropriate that the
     above margin should be applicable to Sweden as a whole.
4.   Venezuela
(52) The weighted average dumping margin for the company CVG Fesilven, expressed as
     a percentage of the CIF-Community-frontier prices, customs duty unpaid, was 20.4%.
(53) In the case of firms which had failed to cooperate in the investigation or had not replied
     satisfactorily to the Commission's questionnaire, the Commission considered that the
     dumping should be determined on the basis of the facts available, in accordance with
     Article 7(7)(b) of the Basic Regulation. In this respect, it was considered that the
     margin found for the company Fesilven would be the most appropriate.
     Brazil
(54) The weighted average dumping margins for the companies concerned, expressed as a
     percentage of the CIF-Community-frontier prices, customs duty unpaid, were as follows:
     Companhia Brasileua Carbureto de Càlcio          9.2%
     Ferbasa                                         22.8%
     Italmagnésio                                    25%
                                              16
 ---pagebreak--- (55)  In the case of Brazilian companies which cooperated in the investigation and were
     found      not    to   have   exported    during     the    investigation period    (Rima
      Electrometalurgia S.A., Companhia Paulista de Ferroligas, Companhia Ferroligas Minas
     Gérais Minasligas) the Commission considers that the best evidence available is the
     weighted average dumping margin found for the companies which did export. This was
     found to be 20.5.3%.
(56) In the case of firms which had failed to cooperate in the investigation or had not replied
      satisfactorily to the Commission's questionnaire, the Commission considered that the
      dumping should be determined on the basis of the facts available in accordance with
      Article 7(7)(b) of the Basic Regulation. In this respect, the Commission considered that
     the most reasonable facts were those established in the investigation and that, in order
     to prevent duty-circumvention and to avoid offering a bonus for non-cooperation, the
     highest margin found for Brazil would be the most appropriate
6.    Kazakhstan^ Ukraine arid Russia
(57) The weighted average dumping margins for the countries concerned, expressed as a
     percentage of the CIF-Community-frontier prices, customs duty unpaid, were as follows:
      Kazakhstan                                74%
      Ukraine                                   74%
      Russia                                    74%
7.   The. remaining Republics of the formerJUSSR
(58) Since no ferro-silicon originating in the remaining Republics of the former USSR was
     imported into the Community during the investigation period, any review of the
     measures, as they concerned those Republics, was inappropriate. Accordingly, the anti-
     dumping measures in respect of those Republics should not be maintained.
8    Former Yugoslav Republic of Maceiioniaaiid the Republics of Bpsni.a-Herzegovjnaand
     Slovenia
(59) For the producers in the abovementioned countnes, given that their contribution to
     injury was de minimis no dumping calculations were made (see recital 62).
                                              17
 ---pagebreak--- 9.   Conclusion
(60) The Council confirms the above conclusions
F    INJURY
1     Cumulation
(61)  The effects of the imports from the countries under review have, in general, to be
     analysed cumulatively, since the exports originating in each of those countries
     comprised significant quantities of the product under consideration and competed with
     the Community production and with each other, and because the exporters' market
     behaviour was similar
(62) However, imports from the Republics of Bosnia-Herzegovina and Slovenia and the
     former Yugoslav Republic of Macedonia were minimal While the mere fact that
     imports from those countries, after the imposition of duties, were negligible is not a
     circumstance justifying ipso, tac to in a review proceeding the lifting of duties against
     those countries or precluding the cumulation with other imports, it was found that the
     plant located in the Republic of Bosnia-Herzegovina has been seriously damaged and
     will be out of operation for a significant period of time.
      The current capacity in the former Yugoslav Republic of Macedonia and Slovenia is
     such that it is unlikely that their exports to the Community will go beyond a negligible
     volume in the near future. It can therefore be expected that the volumes imported from
     those three countries, after lifting of measures, will remain at an insignificant level. Any
     contribution to further injury or any threat of injury cannot therefore be attributed to
     these imports
(63) The Council confirms these findings
 ---pagebreak--- 2.   Volume, market share and prices of the dumped...imports
     Volume of imports
(64) The volume of ferro-silicon imported from the countries under review, as a percentage
     of consumption, increased from 56% in 1988 to 60% in 1991 and 69% at the beginning
     of 1992:
         the imports originating in Kazakhstan, Russia and Ukraine rose considerably from
         30 000 tonnes in 1988 (6% market share), 72 000 tonnes in 1991 (14% market
         share) to 90 000 tonnes in 1992 (16% market share);
         the volume of the imports from Norway (approximately 200 000 tonnes per year),
         from Iceland (approximately 20 000 tonnes per year), from Sweden (approximately
          12 000 tonnes per year) remained relatively stable between 1988 and 1992 with
         market shares of some 40% for Norway, 4% for Iceland and over 2% for Sweden
         in 1992;
         the imports originating in Brazil increased from 9 000 tonnes in 1988 (nearly 2%
         market share), to 16 600 tonnes in 1991 (3.2% market share) to approximately
         28 000 tonnes in 1992 (5.5% market share calculated on an annual basis); during
         the same period Venezuelan imports went up from I 000 tonnes in 1988, to
         8 600 tonnes in 1991 to approximately 9 000 tonnes (nearly 2% market share);
         the imports from the Republics of Bosnia-Herzegovina and Slovenia and the former
         Yugoslav Republic of Macedonia, the sole countries of the former Yugoslavia
         producing ferro-silicon, decreased drastically from 18 000 tonnes in 1988 (nearly
         4% market share) to 3 000 tonnes for Slovenia, 2 000 tonnes for the former
         Yugoslav Republic of Macedonia and less than            I 000 tonnes for Bosnia-
         Herzegovina    in    1992  (less  than   1.2%    market   share for  those   three
         countries together).
 ---pagebreak---       Piice of the dumped imports
(05)  The prices CIF, at Community frontier, duty paid, to the first independent buyer in th
      Community for the product imported from the c o u n t n e s under review were lower than
      the Community producers' average ex works prices, which were already depressed
      The comparison, earned out at the same level of trade, showed the following average
      price undercutting margins
            9.9% for Norway,
            9.9% for Iceland,
            7.8% for Sweden,
      -    2 0 . 1 % for Brazil,
           2 0 % for Venezuela,
           58.2% foi Ukraine, Russia and Kazakhstan
(66)  The Council confirms these findings
3     Situation of ihe Community industry
      PïwiiictïoBi., c h a r i l y sine! uiiliz-i^ion rate
(67;  ComNiumiy p r o d u u i o n of feno-silicon fell from nearly 190 000 tonnes in 1989 to
       (32 000 tonnes ir« I 9<) J and !02 000 tonnes m J992. Though production capacity feil
      fiom nearly 25T, 0';U tonnes in I9K0 to appioximately 200 000 tonnes in 1.992, the
      uîdization ïaie n c w i J i e l e s s decreased from 7 5 % in 1989 to 4 8 % in 1992.
      Sales id'i'éïist :s>ctî :<•< "*j*t ih.-.iv
((K )  J'he '.jbantiiy of ïc*vo-sdicon sold in the C o m m u m i y by the Community producers fell
      fioiu 163 000 tonnes in i989 to 135 000 tonnes in 1990, to 122 000 tonnes in 1991 and
      lo approximately 100 000 tonnes in 1992.
      Between 1989 and 1902 She Community industry's market share declined as follows:
      3 0 % m 1989, 2 5 % in i990, 2 3 % in 1991 and 13% in 1992 (four months), while the
      Community's         annual       consumption       increased between  1988    and    1989 from
      490 000 tonnes to 53 5 000 tonnes and has since remained at that level.
                                                        20
 ---pagebreak---       Price evolution
(69) The low level of import prices over the investigation period meant that Community
      producers had to sell the product in the Community at prices which, in most cases, did
      not cover their production costs. The low level of prices not only prevented Community
      producers from raising their prices in order to reflect the rise in production costs, but
      even forced them to lower their prices, although this did not stop them from losing
      market shares.
       Profits
(70)   Due to the price depression and the declining capacity utilization which negatively
      affected the coverage of fixed costs in relation to this highly capital-intensive industry,
      the Community industry overall has recorded poor financial results since 1987 (with the
      exception of 1989, when a small profit was realized) The situation had further
      deteriorated since 1990 and particularly during the investigation period, with all
      Community producers suffering heavy losses. A weighted average of the Community
      industry's results shows a loss of some 34% on turnover during that period.
      Employment and investment
(71 ) It should be noted that the ferro-silicon industry is not labour intensive. However, there
      has been a small, but steady curtailment in employment levels.
      Investments have been cut, and in Italy three companies stopped their ferro-silicon
      production
      Conclusion
(72) Given the financial losses and the reduction of its market shares, the Community
      industry's position has declined considerably. Ihe Commission concludes accordingly
      that the industry has suffered material injury within the meaning of Article 4(1) of the
      Basic Regulation
                                               21
 ---pagebreak--- (73) The Council confirms these findings and conclusions
4    Causal link between dumped imports and injury
(74) The Commission examined whether the material injury suffered by the Community
     industry was caused by the effects of the dumping, and found that the increased influx
     of imports of the countries under review coincided with a significant loss of market
     share and a reduced profitability on the part of the Community industry. The
     Community ferro-silicon market is a transparent and price-sensitive market in which the
     price-undercutting practised by the producers of the countries under review had an
     immediate depressive effect on the prices of the Community industry The Community
     producers had to adjust their prices to meet this downward trend in prices.
(75) The Council confirms these findings.
5    Other factors
(76) The Commission also considered whether other factors than the dumped imports of
     ferro-silicon could have caused injury to the Community industry.
(77) It has already been found that many of the difficulties encountered by the Community
     ferro-silicon industry have been caused by the dumped imports of other third countries
     (like South Africa and China) However, this does not detract from the conclusion that
     considerable quantities and the low prices of the dumped imports from the countries
     under review also had a substantial influence on the unfavourable situation of the
     Community industry.
(78) The Commission did not find any other factors which could explain the precarious
     economic situation of the Community industry. Indeed, there were neither substantial
     imports, other than those mentioned, nor was there any contraction in demand between
      1990 and 1992.
                                             22
 ---pagebreak--- > I
    6     Conclusion
    (79)  In those circumstances, and even allowing for the fact that imports from South Africa,
          China, Poland and Egypt have also contributed to the poor situation of the Community
          industry, the Commission has come to the conclusion that the effects of the dumped
          imports of ferro-silicon originating in Brazil, Venezuela, Norway, Iceland, Sweden,
          Ukraine, Kazakhstan and Russia, taken in isolation, have to be considered as still
          causing material injury to the Community industry Any lifting of the measures against
          these producers would therefore increase the existing injury That being so, the present
          circumstances do not justify the repeal of the measures On the contrary, the situation
          as found requires the adjustment of the existing measures to the new situation.
          Indeed, should the measures in force remain unchanged, lapse or be repealed, the result
          would certainly be further price decreases in the imports, causing further price
          depression on the whole Community market, and further loss of market shares and
          profitability for the Community industry.
    (80) The Council confirms these findings and conclusions.
    G     COMMUNITY INTEREST
    (81) In assessing the Community interest, the Commission took account of certain basic
          elements     The prevention of the distortion of competition arising from            unfair
          commercial practices, and hence the re-establishment of open and fair competition on
          the Community market, is the very purpose of anti-dumping measures and is
          fundamentally in the general Community interest Furthermore, failure to maintain
          measures in force would aggravate the already precarious situation of the Community
          industry, especially noticeable from the lack of profitability and the shrinking of market
          shares, making its viability questionable Should the industry be forced to cease
          production, the Community would be rendered entirely dependent for its supply on third
         countries.
          Without anti-dumpmg measures, the disappearance of certain Community producers is
         quite probable in the near future, given the level of losses incurred by certain of them
         over an extended period It should be noted in this respect that some Italian producers
         ceased operating at the beginning of 1991 Any further deterioration would endanger
         jobs and investment in the sector concerned
                                                  23
 ---pagebreak--- (82) The Commission recognizes that the imposition of anti -dumping duties could affect
     price levels of the exporters concerned in the Community and subsequently may have
     some influence on the relative competitiveness of their products. However, the
     competitive advantage that is being lost is due to unfair trade practices which anti-
     dumping measures are designed to remove.
(83) It has also been argued that anti-dumping measures would reduce the number of
     competitors on the market. However, the Commission considers that the number of
     competitors on the Community market will not be reduced by the adoption of
     anti dumping measures. On the contrary, the removal of the unfair advantages gained
     by the dumping practices is designed to arrest the decline of the Community industry
     and thus to help to maintain the availability of a wide choice of ferro-silicon producers.
(84) As to the interests of the processing industry, namely producers of speciality steel
     which are end-users of the product concerned in the Community, its short-term price
     advantages have to be viewed against the background of the longer-term effect of not
     retaining fair competition Indeed, to refrain from maintaining measures in force would
     seriously threaten the viability of the Community industry, the disappearance of which
     would in fact reduce supply and competition to the detriment of consumers Moreover,
     it has to be borne in mind that the price of ferro-silicon represents, on average, only
     0.2% of the cost of a tonne of steel. Any cost increase of ferro-silicon due to anti-
     dumping measures would therefore have an insignificant impact on the final consumers.
(85)  Ihe Commission considers that it is therefore in the Community's interest to call for
     the continued imposition of anti-dumping measures in order to prevent further injury
     being caused by the dumped imports.
(86) The Council confirms these conclusions
H    UNDERTAKI NOS
(87) Two companies proposed revised price undertakings.
(88) The prices cited in previous undertakings have all systematically been undercut and the
     Commission considers that the undertakings can no longer be considered an appropriate
     remedy
(89) The Council confirms this approach
                                              24
 ---pagebreak--- 1     LEVEL OF THE DUTY
(90) In order to adapt the measures to the changed circumstances and prevent the recurrence
     of further injury, it is considered that anti-dumping measures should be established in
     such a way as to allow the Community industry to make a reasonable profit in the
     future and to stem the fall in its sales
(91) The Commission has calculated the weighted average production cost of the
     Community producers, a profit of 6%, based on past performance and considered
     reasonable fv.r guaranteeing the industry's productive investment on a long-term basis.
     Since the    difference    between   those   costs   and the average import prices on
     a CIF-Community-frontier basis, duty unpaid, is higher than the dumping margins for
     all companies or countries concerned, the duties should be based on the dumping
     margins recorded
(92) Accordingly, the following anti-dumping duties should be imposed:
     Norway:                                            6.8%
     Iceland:                                           6 8%
     Sweden:                                            7.4%
     Venezuela:                                        20.4%
     Brazil:                                           25%
         Companhia Brasileira
           Carbureto de Câlcio                          9 2%
         Fer basa                                     22.8%
         Rima Electrometalurgia                       20 5%
         Companhia Paulista de Ferroligas             20 5%
         Companhia Ferroligas Minas Cïerais
           Minasligas                                 20 5%
     Russia:                                          74%
     Ukraine:                                         74%
     Kazakhstan:                                      74%
                                              25
 ---pagebreak--- (93) In the case of firms which failed to cooperate in the investigation, the Commission
     considered that the duties should be established on the basis of the facts available in
     accordance with Article 7(7)(b) of the Basic Regulation In order not to reward non-
     cooperation, it was considered that the most reasonable facts were those established
     during the investigation and that there was no reason to believe that any duties lower
     than the highest duties considered necessary would be sufficient to remove the injury
     caused by the imports. Accordingly, it is considered appropriate to impose the highest
     duty calculated for ferro-silicon originating in each country under investigation.
(94) The Commission is, as always, prepared to carry out a newcomer review in the case of
     those companies which did not export during the investigation period, and are not
     related to companies which did export during that period and intend to commence the
     exports to the Community
(95) The Council confirms the above.
J    REPE: AL OF REGI.!LATJ ONS_ AND_PILCJ SIQN S
(96) Regulations (EEC) Nos 2409/87, 341/90, 1115/91 and Decision 91/240/EEC should
     accordingly be repealed,
                                             26
 ---pagebreak--- HAS ADOPTED THIS REGULATION:
                                            Article I
1   A definitive anti-dumpmg duty is hereby imposed on imports of ferro-silicon containing
    between 20% and 96% of silicon by weight falling within CN codes 7202 21 10,
    7202 21 90 and ex 7202 29 00 (Taric code 7202 29 00 II) and originating in Norway,
    Sweden, Iceland, Brazil, Venezuela, Kazakhstan, Russia and Ukraine.
2    fhe rate of duty, calculated on the basis of the free-at-Commumty-frontier price of the
    product, not cleared through customs, shall be
         6.8%        for ferro-silicon originating in Norway
         6 8%         for ferro-silicon originating in Iceland
         7.4%        for ferro-silicon originating in Sweden
        20.4%        for ferro-silicon originating in Venezuela
        25%          for ferro-silicon originating in Brazil (additional Taric code 8731),
                     with the exception of that produced by the companies below, to which
                     the following rates shall apply
                       9.2%         Cia Brasileira Carbureto de Calcio, Rio de Janeiro
                                    (additional lane code 8729)
                     22.8%          Cia de Ferro Ligas da Bahia (Ferbasa), Pojuca, Bahia
                                    (additional Taric code 8730)
                     20.5%          Cia    Rima    Electrometalurgia S.A.,   Belo   Honzonte
                                    (additional lane code 8734)
                     20.5%          Cia Pauhsta de Ferroligas, Sào Paulo (additional Taric
                                    code 8734)
                     20 5%          Cia Ferroligas Minas Gérais, Mmasligas, Contagem, MG
                                    (additional Taric code 8734)
        74%          for ferro-silicon originating in Russia, Kazakhstan and Ukraine
                                               27
 ---pagebreak--- 3      The provisions in force concerning customs duties shall apply
4.     Regulations (EEC) Nos 2409/87, 341/90, 1115/91 and Decision 91/240/EEC are hereby
       repealed.
                                           Article 2
This Regulation shall enter into force on the day following that of its publication in the
Official Journal of the European Communities
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,                                                  for the Council
                                                                    The President
                                              28
 ---pagebreak---                                                                      KSN 0254-1475
                                                               COM (93) 447 fina!
                                                      DOCUMENT
EN                                                                             08
                                 Catalogue number : CB-CO-93-490-EN-C
                                                             ISBN 92-77-59454-3
Office for Official Publications of the European Communities
L-2985 Luxembourg
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