CELEX: 51995PC0738
Language: en
Date: 1995-12-19
Title: Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of refractory chamottes originating in the People' s Republic of China

COMMISSION OF THE EUROPEAN COMMUNITIES
                                           Brussels, 19 12.1995
                                           COM<95) 738 final
                            Proposal for a
                  COUNCIL REGULATION (EC)
imposing a definitive anti-dumping duty on imports of refractory chamottes
               originating in the People's Republic of China
                   (presented by the Commission)
 ---pagebreak---  ---pagebreak---                            EXPLANATORY MEMORANDUM
1.     By Regulation (EC) No 1878/95 of 28 July 1995», the Commission imposed a
     • provisional anti-dumping duty on imports into the Community of refractory
       chamottes originating in the People's Republic of China, falling within CN codes
       ex 2507 and 2508.
2.     By Council Regulation (EC) No 2735Z952 , the Council extended the validity of
       this duty for a period of two months.
3.     Upon disclosure of the Commission's provisional findings the complainant and
       two companies of the Community user industry made their views known in
       writing. A company of the user industry requested and was granted a hearing by
       the Commission. The Commission continued to seek and verify all the
       information it deemed necessary for its definitive findings.
4. '   The parties were informed of the essential facts and considerations on the basis of
       which it was intended to recommend the imposition of a definitive anti-dumping
       duty and the collection of amounts secured by way of the provisional duty. The
       parties were also granted a reasonable period within which to make
       representations subsequent to the disclosures.
5.     The parties' comments were considered and, where appropriate, taken into
       account.
1
  OJ. No L 179,-29.7.1995, p. 56
2 OJ. No L 285,29.11.1995, p. 1
                                           A
 ---pagebreak--- 6. It is considered that definitive anti-dumping measures should be imposed against
   the imports into the Community of Chinese refractory chamottes, in the form of a
   variable anti-dumping duty, based on a minimum price of ECU 75, OF
   Community frontier, duty unpaid, per tonne. In view of the dumping margin
   established and the injury caused to the Community industry, it is considered
   necessary that the amounts secured by way of the provisional anti-dumping duty,
   should be definitively collected.
7. It is therefore proposed that the Council adopts the draft Regulation annexed
   imposing a definitive anti-dumping duty on imports of refractory chamottes
   originating in the People's Republic of China.
                                          Jb>
 ---pagebreak---                           COUNCIL REGULATION (EC) No...
     imposing a definitive anti-dumping duty on imports of refractory chamottes
                      originating in the People's Republic of China
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 3283/94 of 22 December 19941 on
protection
against dumped importsfromcountries not members of the European Community, as last
amended by Council Regulation (EC) No 1251/952, and in particular Article 23 thereof,
Having regard to Council Regulation (EC) No 2423/88 of 11 July 1988 on protection
against dumped or subsidised imports from countries not members of the European
Economic Community3, as last amended by Council Regulation (EC) No 522Z944, and in
particular Article 12 thereof,
Having regard to the proposal submitted by the Commission after consultating the
Advisory Committee,
Whereas:
 1
   OJ No L 349,31.12.1994, p. 1
2
   OJ No L 122,2.6.1995, p.l
 3 OJ No L 209,2.8.1988, p. 1
 4
   OJNoL66,10.3.1994, p. 10                        w
                                                AL
 ---pagebreak---                                   PROVISIONAL MEASURES
(1) By Regulation (EC) No 1878/95 (hereafter "the provisional duty Regulation")*, the
    Commission imposed a provisional anti-dumping duty on imports into the
    Community of refractory chamottes (hereafter "chamottes" or "product concerned")
    originating in the People's Republic of China, falling within CN codes ex 2507 and
    2508.
(2) By Regulation (EC) No 2735/956, the Council extended the validity of these duties
    for a period of two months.
                                SUBSEQUENT PROCEDURE
(3) Following the imposition of the provisional anti-dumping duty, Argiles & Minéraux
    A.G.S., the complainant Community producer, and two companies of the Community
    user industry made their views known in writing. A company of the user industry
    requested and was granted a hearing by me Commission.
(4) The Commission continued to seek and verify all information it deemed necessary for
    its definitive findings. The parties were informed of the essential facts and
    considerations on the basis of which it was intended to recommend the imposition of
    a definitive anti-dumping duty and the collection of amounts secured by way of the
    provisional duty. The parties were also granted a reasonable period within which to
    make representations subsequent to the disclosures.
(5) The parties' comments were considered and, where appropriate, taken into account
5
   OJ No L 179,29.7.95, p. 56
 6
   OJ No L 285,29.11.1995, p. 1
 ---pagebreak---            PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
(6) After publication of the provisional duty Regulation, a company of the Community
    refractory industry (user industry) raised the argument that Chinese chamottes, though
    comparable with the product concerned produced by the main Community producer
    or a large producer in the United States (which was chosen as the "analogue country"
    for the determination of normal value, see recitals 11 - 14 of the provisional duty
    Regulation) in terms of its chemical characteristics, could not be compared with these
    products as to the end-use because of the inferior calcination of Chinese chamottes.
    The company has supported its argument by pointing to the allegedly inferior quality
    of refractory products made from Chinese chamottes when burned at high
    temperatures, i.e. attemperaturesof 1450 °C and above. In order to substantiate this
    allegation, the company submitted two studies it had carried out in order to examine
    the usage at high temperatures of the product concemed of different origins. As a
    result, both studies concluded that Chinese chamottes could, like the other chamottes
    being subject to the test, be used at temperatures of up to 1400 °C. However, for use
    at temperatures of 1450 °C and above, only chamottes of Israelian origin or chamottes
    produced by one U.S. company or produced by the complainant could be used, as the
    study stated, without considerable disadvantages. One of the studies furthermore
    recommended that, for a particular kind of use within hightemperatureapplication,
    the use of chamottes produced by one U.S. producer should be preferred from all the
    others subject to the test.
 ---pagebreak--- (7) These arguments which had already been raised prior to the provisional determination
    (see recitals 9 and 10 of the provisional duty Regulation), have now been supported
    by evidence. It remains however, as the Commission has established during its
    investigation, that chamottes of different origins andfromdifferent producers cannot,
    from a technical point of view, be absolutely identical to each other, with regard to
    their chemical and physical specifications, due to natural chemical differences in. the
    raw material and different burningtechniques.This entails that chamottes of certain
    origin or produced by certain manufacturers may show advantages or disadvantages
    when used for particular applications. It should also be noted that contradictory
    opinions exist with regard to the quality of the Chinese chamottes (see recitals 9 and
    10 of the provisional duty Regulation). Despite such differences in quality, however,
    there is only one market on which these products compete and, as the Commission
    has established, the product concerned of Chinese origin is, in general, used in the
    same applications as chamottes of other origins and has, overall, the chemical and
    physical characteristics defined for the product under consideration.
(8) Therefore, the findings set out in recital 10 of the provisional duty Regulation, that
    the products imported from the People's Republic of China, those produced in the
    analogue country and those produced by the Community industry are considered to be
    like products, are hereby confirmed.
 ---pagebreak---                                         DUMPING
Normal value
(9) A company of the Community user industry argued that the information obtained
    from one company in the analogue country appeared not to be credible because the
    U.S. producer concerned was related to the complainant. The company did not further
 • substantiate its allegation, in particular it did not point out in which respect it
    presumed the information in question to be unreliable.
(10) It was established during the investigation that one of the two producers in the
    analogue country which cooperated in this proceeding, and on whose information the
    determination of normal value was based, belongs to the same group as the
    complainant. The Commission services obtained from this, producer, inter alia,
    specific information on sales prices of the product concerned charged to unrelated
    customers in the United States. This information was used for determining normal
    value together with the information received from another producer in thé United
    States which cooperated in this proceeding and which was found not to be related to
    the complainant. The sales data submitted by the company in question was verified by
    the Commission. It was found that this company sold substantial quantities of the
    product concerned on the domestic market and that the sales were made in the
    ordinary course of trade. It was carefully checked whether the relationship in question
    had any bearing on costs of production and, consequently, on profitability of the U.S.
    producer concerned. No indication was found that costs of production, profitability or
    sales to unrelated customers were influenced by the relationship between this
    company and the complainant.
 ---pagebreak--- (11) In the light of the foregoing, it is considered that the information in question can
     be used for determining normal value, an approach confirmed by the judgement of the
     Court of First Instance in case T-164/94, Ferchimex S.A. v. Council7.
(12) Therefore, and in the absence of any further new arguments regarding normal
     value, the findings laid down in recitals 11 to 14 of the provisional duty Regulation
     are hereby confirmed.
Export price
(13) In the absence of any new arguments, thefindingslaid down in recitals 15 and 16
     of the provisional duty Regulation concerning the determination of the export price
     are hereby confirmed.
Comparison
(14) As already pointed out in recital 3 above, one company of the Community user
     industry argued that the product concerned of Chinese origin was inferior to, inter
     alia, that of a producer in the analogue country which cooperated in this proceeding.
     The user company did not further substantiate to what extent this alleged inferiority of
     Chinese chamottes had an impact on the import prices.
 7
   Judgement of 28th September 1995. Not yet reported.
 ---pagebreak--- (15) The Commission had established in its provisional findings (see recital 17 of the
   provisional duty Regulation) that, for comparison purposes, an adjustment had to be
   made in order to take account of certain inferior physical characteristics of Chinese
   chamottes. The Commission found that the adjustment could be quantified, in
   absence of any other available information, by the level of the price difference found
   between chamottes of different alumina contents sold on the market of the analogue
   country in the investigation period. Since the argument raised by the user company
   did not give any indication that an adjustment different from that made for the
   purpose of the provisionalfindingsshould be applied, and in the absence of any other
    new argument, thisfindingis hereby confirmed.
(16) In the light of the foregoing, and in the absence of any further new arguments, the
    findings set out in recital 17 of the provisional duty Regulation concerning
    comparison are hereby confirmed.
Dumping margin ,
(17) Since, finally, the determination of the dumping margin remains unchanged, the
    findings set out in recital 18 of the provisional duty Regulation are hereby confirmed.
    The dumping margin is thus definitively determined at 28.4 % of the free-at-
    Community-frontier price, before duty.
 ---pagebreak---                                  COMMUNITY INDUSTRY
(18) In the absence of any new arguments, the findings set out in recital 19 of the
   provisional duty Regulation concerning the definition of the Community industry are
   hereby confirmed.
                                           INJURY
(19) No new arguments were made with regard to the injury findings set out in recital
    30 of the provisional duty Regulation. They are, therefore, hereby confirmed.
                                 CAUSATION OF INJURY
(20) In the absence of any new arguments, the findings with regard to the causal link
   between dumped imports and the material injury suffered by the Community industry,
    set out in recital 34 of the provisional duty Regulation, are hereby confirmed.
 ---pagebreak---                                COMMUNITY INTEREST
(21) Two companies of the Community user industry argued that the imposition of
   anti-dumping measures against imports of Chinese chamottes, which would lead to a
   price increase of this basic material, would subsequently result in a price increase for
   refractory products and thus to a deterioration of the industry's sales on the
   Community market, where it competes with suppliers from non-Community
   countries, and on export markets. Such decrease of sales revenue, and consequently of
   profit, would have to be compensated by a decrease in the workforce of the user
   industry which would be more significant than the number of employees still
   maintained in the chamottes industry. It was further argued that the imposition of
   measures would lead to a deterioration of the trade relationship between the
   Community industry and the People's Republic of China in general, and the potential
   damage for the Community economy as a whole would be more significant than the
   remedial effect for the chamottes industry. One company claimed also that the price
   increase for Chinese chamottes, due to anti-dumping measures, would result in a
   monopolistic position of the Community producers.
   The arguments concerning the effect of anti-dumping measures on sales were further
   substantiated by one user company which pointed out that the direct impact of the
   potential price increase for Chinese chamottes, as a result of the imposition of an anti-
   dumping duty based on a minimum-price of 75 ECU/tonne (OF Community
   frontier), on its sales prices would be an increase of around 1.4 %. This user company
   stated that a variable duty based on a minimum-price of 75 ECU would lead to a
   relatively modest price increase for Chinese chamottes which, though disturbing,
   would not have a seriously damaging effect on its business. The company thus
   confirmed, in effect, the provisional findings set out in recital 38 of the provisonal
   duty Regulation.
   In view of the foregoing, the Commission considered the following:
 ---pagebreak--- (22) The purpose of anti-dumping measures is to jremedy unfair trading practices
   which have an injurious effect on a Community industry. Such a remedy should result
   in the re-establishment of a fair competitive situation which, as such, is in the interest
   of the Community. In this proceeding, the investigation has shown that the
   Community industry was suffering material injury which, without a remedy, would
   threaten its viability. On the other hand, the imposition of anti-dumping measures
   would probably result in a price increase which would affect the user industry for
   which chamottes are a basic material. On balance, in view of the extent to which the
   Community industry was injured, and taking account of the very modest impact of a
   variable duty, based on a minimum-price of 75 ECU/tonne (CIF Community frontier),
   on the prices for Chinese chamottes, and with regard to the very limited effect of the
   measure on the sales prices of the user industry, the Commission considers that the
   disadvantage to the user industry is not sufficient to deny the Community industry
   protection against dumped imports of Chinese chamottes.
(23) The Community pursues a policy which aims at increasing its economic links
   with the People's Republic of China. However, it expects the Chinese producers and
   exporters to operate on the Community market in accordance with .the principles of
    fair trade. Therefore, there is no contradiction beween this policy and the defence of
    the Community industry against unfair trade practices. Moreover, it should be noted
   that the exports of chamottes to the Community represent only a very small fraction
    of the total Chinese exports to the Community and the fact that neither the Chinese
   producers and exporters nor the authorities of the People's Republic of China have
    cooperated in this proceeding can also be seen as an indication that the chamottes
    exports to the Community is not a priority issue for these parties. It is therefore
    considered to be unrealistic to assume that anti-dumping measures imposed to restore
    fair trade in this market sector will have a significant impact on the trade relationship
    between the Community industry and the People's Republic of China.
                                               10
 ---pagebreak--- (24) Lastly, the argument that the imposition of anti-dumping measures might lead to a
    monopolistic position of the Community industry is considered to be unfounded. The
    measures will have the effect of maintaining the number of competing suppliers of
    chamottes on the Community market because they will ensure the continued presence
    of the Community producers together with exporters from other countries, e.g. the
    United States and the Czech Republic, and the modest increase in import prices for
    Chinese chamottes resulting from the imposition of measures will also permit the
    continued presence of the Chinese exporters.
(25) Therefore, in the Ught of the above and in absence of any other new arguments, it
    is confirmed that the imposition of measures against imports of Chinese chamottes is
    in the Community interest
                                         DUTY
(26) In the absence of any new arguments, thefindingsset out in recital 36 to 38 of the
    provisional duty Regulation, with regard to the level and type of thé measures, are
    hereby confirmed. Therefore, definitive anti-dumping measures should be imposed
    against the imports into the Community of Chinese chamottes, in the form of a
    variable anti-dumping duty, based on a minimum price of ECU 75 CIF Community
    frontier, duty unpaid, per tonne.
                  COLLECTION OF THE PROVISIONAL DUTIES
(27) In view of the dumping margins estabUshed and the injury caused to the
    Community industry, it is considered necessary that the amounts secured by way of
    the provisional anti-dumping duty, should be definitively collected.
                                            11
 ---pagebreak--- HAS ADOPTED THIS REGULATION:
                                         Article 1
(1) A definitive anti-dumping duty is hereby imposed on imports of unprocessed (not
    ground or in powder form) refractory chamottes falling within CN code ex 2507 and
    ex 2508 (Taric codes: 2507 00 20*10, 2507 00 80*10, 2508 10 00*10, 2508 20
    00*10,
    2508 30 00*10, 2508 40 00*10, 2508 50 00*10, 2508 60 00*10, 2508 70 10*10 and
    2508 70 90* 10) and originating in the People's RepubUc of China.
(2) The amount of duty shaU be the difference between the price of ECU 75, per tonne,
    and the netfree-at-Communityfrontierprice, per tonne, if the latter price is lower.
(3) For the purpose of calculating the duty payable, the minimum-price shall be
    converted into the relevant national currency at the exchange rate estabUshed in the
    same way as that used for a calculation of customs value.
(4) Unless otherwise specified, the provisions in force concemig customs duties shall
    apply.
                                             12
 ---pagebreak---                                         Article 2
(1) The amounts secured by way of the provisional anti-dumping duty on imports of
    unprocessed refractory chamottes originating in the People's RepubUc of China
    pursuant to Commission Regulation (EC) No 1878/95 shall be definitively collected.
(2) The provisions of Article 1 (4) shaU also apply to the definitive coUection of the
    amounts secured by way of the provisional anti-dumping duty.
                                        Article 3
        This Regulation shaU enter into force on the day foUowing its publication in the
        Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly appUcable in all Member
States.
Done at Brussels,
                                                           For the Council
                                                           The President
                                             13
 ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(95) 738 final
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