CELEX: 52001PC0039
Language: en
Date: 2001-02-05
Title: Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of potassium permanganate originating in the People's Republic of China

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                Brussels, 5.2.2001
                                                COM(2001) 39 final
                                   Proposal for a
                           COUNCIL REGULATION
imposing a definitive anti-dumping duty on imports of potassium permanganate
                 originating in the People’s Republic of China
                          (presented by the Commission)
 ---pagebreak---                        EXPLANATORY MEMORANDUM
1. In 1994, following a review, the Council imposed a definitive anti-dumping duty on
   imports originating in China of ECU 1.26 per Kg (Council Regulation (EC)
   No 2819/94).
2. This expiry review was initiated on 11 November 1999, following a request lodged
   by CEFIC on behalf of the only remaining Community producer, to continue the
   current anti-dumping measures concerning imports of Potassium Permanganate
   originating in the People’s Republic of China.
3. The attached proposal for a Council Regulation is based on the determination that re-
   imposition of measures are necessary to avoid recurrence of dumping and injury to
   the Community industry and that continuation of the measures are in the Community
   interest.
4. At the ADC meeting of 26 July 2000, 10 Member States voted in favour of extending
   the measures, 4 Member States opposed the extension, and 1 Member State was not
   represented.
5. It is, therefore, proposed that the Council adopt the attached proposal for a
   Regulation, which should be published in the Official Journal of the European
   Communities.
                                         2
 ---pagebreak---                                                Proposal for a
                                       COUNCIL REGULATION
     imposing a definitive anti-dumping duty on imports of potassium permanganate
                          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) N° 384/96 of 22 December 1995 on protection
against dumped imports from countries not Members of the European Community1, and in
particular, Article 11(2) and (6) thereof.
Having regard to the proposal submitted by the Commission, after consulting the Advisory
Committee,
Whereas:
1.      PREVIOUS INVESTIGATIONS
1.1     INVESTIGATIONS CONCERNING THE PEOPLE'S REPUBLIC OF CHINA
(1)     By Regulation (EEC) No 1531/882 the Council imposed a definitive anti-dumping
        duty on imports of potassium permanganate originating in the People’s Republic of
        China (‘China’). The amount of the duty imposed was equal to either the amount by
        which the free-at-Community-frontier price per kilogram net, before duty, was less
        than ECU 2.25, or 20% of that price, whichever was higher.
(2)     In 1994, following a review under Articles 14 (1) and 15 (3) of Regulation (EEC) No
        2423/883, the Council, by Regulation (EC) No 2819/944, imposed a definitive anti-
        dumping duty on imports of potassium permanganate originating in China of ECU
        1.26 per Kg.
1.2     INVESTIGATIONS CONCERNING OTHER COUNTRIES
(3)     An anti-dumping investigation on potassium permanganate imports originating in
        India and the Ukraine was initiated in April 1997. Definitive anti-dumping duties of
        5.6% and 36.2% respectively were imposed on imports from these countries by
        Regulation (EC) No 1507/985.
1
        OJ L 56, 6.3.1996, p.1, as last amended by Regulation No 2238/2000, (OJ L 257, 11.10.2000, p. 2).
2
        OJ L 138, 3.6.1988, p. 1.
3
        OJ L 209, 2.8.1988, p. 1.
4
        OJ L 298, 19.11.1994, p. 32, as last amended by Regulation No 1170/95, OJ L 118, 25.5.1995, p. 6.
5
        OJ L 200, 16.7.98, p. 4.
                                                      3
 ---pagebreak--- 2.   PRESENT INVESTIGATION
2.1  REQUEST FOR REVIEW
(4)  In April 1999, the Commission published a notice of impending expiry6 of the anti-
     dumping measures in force on imports of potassium permanganate originating in
     China. On 12 July 1999, the Conseil Européen des Fédérations de l'Industrie Chimique
     (CEFIC) submitted a request to review these measures pursuant to Article 11(2) of
     Council Regulation (EC) No 384/96, (‘the basic Regulation’).
(5)  The request was lodged on behalf of the sole Community producer, thus representing
     the totality of Community production of potassium permanganate. The request was
     based on the grounds that the expiry of the measures would be likely to result in the
     continuation or recurrence of dumping and injury to the Community industry.
2.2  NOTICE OF INITIATION
(6)  Having determined, after consultation of the Advisory Committee, that sufficient
     evidence existed for the initiation of a review, the Commission initiated an
     investigation pursuant to Article 11 (2) of the basic Regulation7.
2.3  PERIOD OF INVESTIGATION
(7)  The investigation of a likelihood of a continuation and recurrence of dumping covered
     the period from 1 October 1998 to 30 September 1999 (“IP”). The examination of
     trends relevant in the context of the aforementioned recurrence of injury covered the
     period from 1995 up to the end of the IP (the period considered).
2.4  PARTIES CONCERNED BY THE INVESTIGATION
(8)  The applicant Community producer, the exporters and exporting producers in China,
     the importers known to be concerned, and the representatives of the exporting country
     were officially advised of the initiation of the review. Questionnaires were sent to all
     these parties and to those who made themselves known within the time limit set in the
     notice of initiation. In addition, the co-operating producer in the United States, which
     was chosen as an analogue country, was advised and sent a questionnaire. Interested
     parties were given the opportunity to make their views known in writing.
(9)  The applicant Community producer replied to the questionnaire, as well as one
     importer. In addition, two independent resellers made their views known in writing.
(10) The producer in the analogue country also replied to the questionnaire.
(11) With respect to the exporting country, no exporters or exporting producers co-operated
     in the investigation.
6
     OJ C 117, 29.4.1999, p. 3.
7
     OJ C 323, 11.11.1999, p. 5.
                                              4
 ---pagebreak--- 2.5  VERIFICATION OF INFORMATION RECEIVED
(12) All information deemed necessary was sought and verified for the purpose of deciding
     the likelihood of a continuation or recurrence of dumping and injury as well as a
     determination of the Community interest. A verification visit was carried out at the
     premises of the sole Community producer, Industrial Química del Nalón SA-IQN,
     Oviedo, Spain.
(13) Interested parties were given the opportunity to request a hearing, but no such request
     was made.
3.   PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
3.1  DESCRIPTION OF THE PRODUCT UNDER CONSIDERATION
(14) The product under consideration is the same as in the previous investigations, i.e.
     potassium permanganate, which has the chemical formula KMnO4. Potassium
     permanganate falls within CN code 2841 61 00, and is a compound of manganese,
     potassium and oxygen whose manufacture requires two basic raw materials: caustic
     potash (KOH) and manganese dioxide or pyrolusite ore (MnO2). The product is
     manufactured in three grades: technical (97 to 98 % purity of KMnO4, in the form of
     crystalline powder), free flowing (containing an anti-caking agent) and pharmaceutical
     (minimum 99 % purity of KMnO4 in the form of crystals). All grades show the same
     basic physical (crystalline) and chemical properties. It was therefore concluded that all
     grades should be considered as one product for the purpose of the investigation.
(15) Potassium permanganate is a strong oxidising agent used for potable water treatment,
     for waste water treatment, in the manufacture of chemicals and pharmaceuticals, in
     aqua culture, in metal refining, for metal surface cleaning, as a disinfectant in
     agriculture and veterinary practices, for gas purification, process gas deodorization, for
     bleaching and special treatments in the textile industry, in radioactive
     decontamination, in gas turbine cleaning and for submarine air purification.
3.2  LIKE PRODUCT
(16) Potassium permanganate produced and sold on the domestic market in the U.S. and
     that exported to the Community from China as well as that produced and sold by the
     Community industry in the Community market had effectively identical physical
     characteristics and uses and were thus like products within the meaning of Article 1(4)
     of the basic Regulation.
4.   CONTINUATION OR RECURRENCE OF DUMPING
4.1  GENERAL ISSUES
(17) Eurostat statistics show a very low level of imports of potassium permanganate from
     China, of 30 tonnes in 1998 and 23 tonnes during the IP. However, Chinese export
     statistics (recital 44) show a much higher volume of 450 tonnes in 1998 and in the
     previous year. With regard to this disparity, and in view of the total lack of co-
     operation by Chinese exporters or exporting producers, there is a strong possibility of
                                              5
 ---pagebreak---       circumvention of the existing duties, by declaring the Chinese product as originating
      in a number of other countries8.
(18)  In the context of the continuation of dumping, it was investigated whether dumping of
      exports from the country concerned to the Community was currently taking place.
      This was on the grounds that if dumping was taking place now, then it was reasonable
      to consider that it would continue in the future.
(19)  As to the examination of the likely recurrence of dumping should the current measures
      be repealed, it was investigated both whether future dumping was likely and also
      whether any such dumping would take place in significant quantities. The likelihood
      of future dumping was assessed in relation to exports from the country concerned to
      third countries and the question of volume was addressed by examining all relevant
      market developments, both domestic and export.
(20)  As the purpose of this type of review is to assess the likelihood of dumping should
      measures be removed, it was not considered necessary or appropriate to calculate
      dumping margins or allowances with the precision that would be necessary in an anti-
      dumping investigation carried out under Article 5 of the basic Regulation.
      Nevertheless, the investigation was carried out to a level of detail which would permit
      a finding as to whether significant dumping had occurred during the investigation
      period, irrespective of the precise price level of each export transaction, costs and
      allowances claimed or otherwise applied.
(21)  It was noted that the US administration recently decided to maintain their existing
      anti-dumping measures against imports of potassium permanganate originating in
      China. However, it was not considered necessary or appropriate to draw conclusions
      from this fact, other than that it renders far less attractive one important market to
      which some Chinese production capacity could be redirected (see recital (40) below).
4.2   LIKELIHOOD OF A CONTINUATION OF DUMPING
4.2.1 ANALOGUE COUNTRY
(22)  In the absence of any co-operation on the part of Chinese exporters, normal value for
      the exports from China had to be established in accordance with Article 2 (7) (a) of the
      basic Regulation, i.e. based on information obtained in a market economy third
      country where the product was produced and sold.
(23)  In accordance with the Notice of Initiation, the applicant's suggestion to use the United
      States as an appropriate analogue country, as in the previous investigations, was
      accepted for a number of reasons:
        The US is the largest world market for potassium permanganate and the second
        largest producer after China.
        The US market is open to imports, which represent around a 10% share of US
        consumption.
        Potassium permanganate, from all sources, is a relatively homogeneous product.
8
      Regulation (EC) No 2819/94, supra.
                                              6
 ---pagebreak---         In its major applications, potassium permanganate is subject to competition from
        other substitute chemicals.
(24)  Other countries (e. g. India, Czech Republic) were considered less appropriate as
      reference countries in view of the scale of production and conditions of competition
      prevailing in these markets. Also, Indian producers, who were approached as a
      potential reference country, indicated that they would not be able to co-operate.
(25)  Given the co-operation of the US producer, and the absence of comments from any
      other interested parties, the US remained the only appropriate and reasonable choice,
      as had already been the case in the 1988 and 1994 investigations.
4.2.2 NORMAL VALUE
(26)  Firstly, it was examined whether the domestic sales made by the co-operating US
      producer were representative when compared to the imports into the Community
      concerned by the investigation. This was considered to be the case as they were made
      in significant quantities, measured against the average volume of exports recorded as
      sold into the Community by the exporting producers in China during the IP.
(27)  It was also established that the relevant sales could be considered as having been made
      in the ordinary course of trade, having compared the sales prices and costs of
      production for each grade of potassium permanganate sold by the US producer.
(28)  Normal value was thus established as the weighted average of the prices of all grades
      of potassium permanganate sold on the US domestic market in the first quarter of 1999
      by the co-operating US producer. Although the data supplied by the US producer does
      not cover the full IP, these prices were in line with the weighted average sales prices
      for the years 1997 and 1998 which were also provided and can therefore be considered
      representative for the IP.
(29)  The figures submitted by the co-operating US producer were also verified where
      possible with other sources. Given the level of dumping found, and the fact that an
      exact calculation of these levels is not required as explained in recital 20, it was
      considered that the figures need not be further corroborated by an on-site verification.
4.2.3 EXPORT PRICE
(30)  As no exporting producers co-operated, the export price was determined on the basis
      of the facts available. In this case this was by reference to Eurostat, and to information
      provided by an importer not related to the Chinese exporters.
(31)  According to Eurostat, the weighted average value of imports from China on a CIF
      European Community frontier basis, for all grades of potassium permanganate during
      the IP was € 1,125 per tonne. This is equivalent to approximately € 960 per tonne on a
      FOB Chinese border basis.
(32)  Based on evidence provided by the applicant, the average import price from China on
      a CIF European Community frontier basis was around € 970 per tonne which is
      equivalent to approximately € 810 per tonne on an FOB Chinese border basis.
(33)  The only European importer which co-operated in the investigation provided price
      data which falls within the range of the above figures.
                                                7
 ---pagebreak--- (34) Chinese export statistics (recital 44) show a unit value of € 886 per tonne for the year
     of 1998, which is also in line with the said price levels.
(35) In summary, information on export prices taken from several independent sources
     indicates that the export price ranges from approximately € 800 to 1,000 per tonne on
     a FOB Chinese border basis.
4.3  COMPARISON
(36) Comparisons were made between export prices on a FOB Chinese border basis and the
     United States normal value, which was adjusted accordingly by adding the average US
     inland freight from factory to port (FOB US border).
4.4  DUMPING MARGIN
(37) The analysis performed shows that exports to the Community have been dumped at a
     substantial margin during the IP. The dumping margins according to the different
     sources mentioned in recitals 30 to 35 range from 108% to 174%. These would
     correspond to specific duty rates of € 1.308 and € 1.543 per kg respectively, a rate
     higher than the duty of € 1.260 per kg currently in force.
5.   LIKELIHOOD OF THE RECURRENCE OF DUMPING
5.1  LIKELIHOOD OF RECURRENCE OF SIGNIFICANT VOLUMES
(38) China is the world's largest producer and exporter of potassium permanganate and
     currently has a high level of unused production capacity which has been brought on
     stream in the last few years. This excess capacity is equivalent to 5 or 6 times the
     volume of the Community market.
(39) China has the potential to increase its exports to the Community market in very
     significant volumes, particularly as sales in the Chinese domestic market are not
     expected to increase in the foreseeable future.
(40) Furthermore, in the USA, the world's largest market in terms of consumption of
     potassium permanganate, Chinese exports, which have been subject to anti-dumping
     duties since 1983, have virtually ceased. Following a review in 1999, the level of anti-
     dumping duty in the USA has recently been maintained at 128.94%.
(41) India, another important market, has also imposed a substantial anti-dumping duty
     (equivalent to € 149 per tonne) on Chinese origin imports, since 1995.
(42) These factors, together with relatively stable world consumption, can only increase the
     attractiveness of the Community market, the largest in the world after the US and
     China itself.
5.2  LIKELIHOOD OF RECURRENCE OF DUMPING
(43) Taking into account all the sources of information available during the proceeding, it
     can be seen that Chinese producers have continued to dump the product concerned
     onto the Community market in the period after the present measures were imposed.
                                              8
 ---pagebreak--- (44)  Moreover, Chinese exports to third markets have also consistently been at very low
      and dumped prices, as confirmed by comparing the Chinese export statistics and the
      normal value determinations in this case:
     Chinese exports of                 1996        1997               1998
     potassium permanganate
     World
     Quantity (t)                       7,924      10,176             10,396
     Unit value (€ / t)                 1,011       984                892
     EC
     Quantity (t)                        222        450                450
     Unit value (€ / t)                  843        877                886
      Source: Chinese export statistics
(45)  In these circumstances there is every reason to believe that any increased volumes
      exported from China to the Community would be at dumped prices.
5.3   CONCLUSION
(46)  The relatively stable consumption on the world market, the increase over the past five
      years of the level of unused capacities and the limited access to other key export
      markets indicate that there is a likelihood that the repeal of the current anti-dumping
      measures against imports of the product concerned from China would lead to a
      recurrence of significant volumes of dumped exports on to the Community market.
(47)  In particular, the examination of dumping with regard to sales to the European
      Community during the IP and of sales to third country markets outside the European
      Community, showed a pattern of continued dumping by the Chinese exporters as well
      as evidence that any increased volume of exports from China would be at dumped
      prices.
6.    DEFINITION OF THE COMMUNITY INDUSTRY
(48)  The applicant (CEFIC) acts on behalf of the only Community producer of the product
      concerned. This producer (Industrial Química del Nalón SA-IQN) represents 100% of
      potassium permanganate produced in the Community during the IP and constitutes,
      therefore, the “Community industry” pursuant to Article 4(1) of the basic Regulation.
7.    ANALYSIS OF THE SITUATION OF THE COMMUNITY INDUSTRY
7.1   CONSUMPTION
(49)  Consumption in the Community was calculated using verified data of sales provided
      by the Community industry and import volumes obtained via Eurostat. Consumption
      decreased by 18% during the period 1995 to the end of the IP, although consumption
      in 1995 was unusually high due to a severe drought in Spain. Consumption during the
      IP was close to that of 1996, following dips during 1997 and 1998.
                                               9
 ---pagebreak--- 7.2   VOLUME AND PRICES OF IMPORTS FROM THE COUNTRY CONCERNED
(50)  Data from Eurostat suggests that imports from China remained low throughout the
      period considered, due to the existence of anti-dumping measures. However, as
      outlined in recital 44, export statistics provided by the Chinese Government suggests
      much higher exports to the EU of 222 tonnes in 1996 and 450 tonnes in both 1997 and
      1998. This represents a market share during the IP of 10%9 which is well above de
      minimis levels. Even if the Eurostat figures were correct, and the volume of imports
      was very low during the IP, this is not relevant in the context of an expiry review as
      the low volume of imports is, at least in part, attributable to the measures already in
      force.
(51)  Due to the low level of confirmed Chinese origin potassium permanganate sold on the
      Community market and the total non-cooperation from the producers/exporters in the
      country concerned, it is difficult to make any accurate price comparisons. However,
      the data available leads to the conclusion that Chinese prices remain at a level
      significantly below those of the Community producer. Eurostat figures show that
      during the IP, Chinese (duty-free) prices undercut Community producer prices by an
      average of 38%. Similar data for Taiwan shows only slightly lower undercutting by an
      average of 33%.
(52)  The price of Chinese origin potassium permanganate is well below both the average
      market price and the price of the Community industry. Only in 1997 were prices close
      to those of the Community producer, but since then there has been a growing disparity.
      Having come onto the Community market in 1997, Taiwanese prices have consistently
      undercut the Community producer by around 25%. As there is apparently no
      production in Taiwan, there is reasonable cause to suspect that this product is of
      Chinese origin.
7.3   IMPORTS FROM OTHER THIRD COUNTRIES
7.3.1 Volumes and market share
(53)  Total imports from other third countries increased by 54% between 1995 and the IP,
      although imports from the Ukraine and India have decreased considerably due to the
      imposition of anti-dumping duties against these countries by Regulation (EC) No
      1507/9810. Conversely, imports from the USA, the Czech Republic, and Taiwan have
      increased markedly. In the case of the Czech Republic, exports to the Community
      account for 69% of its total capacity, estimated at around 1,000 tonnes per annum.
      Taiwan, who had no exports to the Community until 1997 has seen a doubling of
      volume year on year since then.
7.3.2 Sales prices
(54)  The USA and the Czech Republic are the main importers into the Community against
      whom no anti-dumping measures are currently in place. The U.S. prices are at a level
      close to, but slightly higher, than those of the Community producer. The Czech
      Republic prices are the lowest of all the main exporters to the Community. However,
      as explained in recital 53, the scope for further penetration of the market by Czech
9
      The figure includes a margin of +/-5% to protect the confidentiality of the Community producer.
10
      OJ L 200, 16.07.1998, p. 4.
                                                   10
 ---pagebreak---       exporters is limited and at maximum would only represent a further 5% increase in
      market share. There is no evidence that these imports are either causing injury to the
      Community industry, or that they are being made at dumped prices
7.4   SITUATION OF THE COMMUNITY INDUSTRY
7.4.1 Market share and sales volume
(55)  The Community industry represents 100% of Community production in the IP, as
      there is only one Community producer of potassium permanganate. Until 1998, when
      it went out of business, there was another Community producer, Chemie AG based in
      Germany. However, this company has not been considered in analysing the situation
      of the Community industry, except for the indicator on employment.
(56)  The volume of sales of the Community industry decreased by 21%, during the period
      considered, whilst its market share fell by 2%. However, consumption dropped by
      18% over the same period, so that the Community industry was able to maintain the
      majority of its market share in a declining market.
(57)  As already indicated in recital 49, 1995 was exceptional due to a severe drought in the
      south of Spain and the exhaustion of water supplies. This led directly to an increase in
      the consumption of potassium permanganate for the treatment of heavily polluted river
      water. As the Community industry was best placed to meet this exceptional demand,
      its sales volumes and market share were correspondingly improved. A more
      meaningful and representative analysis would be to take the period from 1996 to the
      IP. Over this period, whilst both the volume of sales and the Community industry’s
      market share have increased, there has been a reduction in both indicators during the
      IP from highs in 1997 and 1998.
7.4.2 Production, capacity and capacity utilisation
(58)  Capacity utilisation of the Community industry increased by 15% over the period
      considered. Capacity utilisation was low during 1997 due to the high stock levels at
      the end of 1996 (recital 65). Following the introduction of anti-dumping measures
      against India and Ukraine in 1998, the capacity utilisation during the IP returned to its
      1996 level.
7.4.3 Cost of production
(59)  Unit costs per tonne of potassium permanganate increased by 5% over the period
      considered. There was a peak in 1997 explained by the low production levels that year
      and the ensuing effect of fixed costs on the unit price.
7.4.4 Employment
(60)  Whilst the remaining Community producer maintained a stable employment situation
      throughout the period considered, it should be kept in mind that another Community
      producer completely shut down operations during the period considered, resulting in a
      loss of employment.
                                              11
 ---pagebreak--- 7.4.5 Production and productivity
(61)   Production and productivity increased by 16% and 21% respectively over the period
       considered.
7.4.6 Price development
(62)   An analysis of sales prices of the Community industry showed that sales prices
       increased by 12% over the period considered. The largest increase occurred in 1998
       when anti-dumping measures were imposed on imports of potassium permanganate
       from India and Ukraine. The unit price has been stable for the last two years.
7.4.7 Profits
(63)   During the period considered the Community industry showed a profit during 1995
       followed by losses in 1996, 1997 and 1998. The Community industry returned to
       modest profitability during the IP. This is explained by the imposition of anti-dumping
       measures against India and the Ukraine in 1998, following which there was a marked
       recovery.
7.4.8 Export sales of Community Industry
(64)   Export sales are mainly directed to USA, Norway and Switzerland. Except for a loss in
       1995, the Community industry showed a profit on its export sales between 1996 and
       the IP.
7.4.9Development of stocks
(65)   Stock levels were high at the end of 1996 due to increased production but since there
       was no repetition of the 1995 drought, they have been progressively reduced.
7.4.10 Conclusions on the situation of the Community industry
(66)   Most of the indicators suggest that the situation of the Community industry is
       improving. This is particularly noticeable from 1998 onwards, when anti-dumping
       measures were imposed against India and Ukraine. Over the period considered output
       and productivity have increased, prices have risen and the IP saw a return to modest
       profitability. The decrease in consumption and sales volumes during the period
       considered should be seen in the light of the fact that the 1995 base level was inflated
       due to a drought in Spain. However, both indicators have shown improvement during
       1997 and 1998, with some fall-off during the IP. At the same time, the Community
       industry has maintained its market share.
(67)   During the period considered, the capacity of the Community industry did not change,
       whilst the utilisation of that capacity increased. However, the cost of production of
       potassium permanganate increased.
(68)   Taken together, the indicators point to a situation where anti-dumping measures
       against China, India, and Ukraine have allowed the Community industry to compete
       on a fair footing. Prices of U.S. exports to the Community market, where there is no
       suggestion of injurious dumping, are at a level close to those of the Community
       producer, suggesting these prices can be considered as those achievable in a fair and
       open market. With the imposition of measures against China, India and Ukraine, price
                                              12
 ---pagebreak---      increases have been possible. This has resulted in profitable trading during the IP, the
     first profitable trading since 1995.
8.   LIKELIHOOD OF RECURRENCE OF INJURY
8.1  COMMUNITY INDUSTRY
(69) The situation of the Community industry is outlined in recitals 55 to 68.
8.2  LIKELY EXPORTS FROM CHINA
(70) Although limited, there is evidence to show that prices charged by Chinese exporters,
     particularly to Chile and Australia, are at levels that would significantly undercut the
     Community industry. The information available from Eurostat and the Chinese
     authorities shows potassium permanganate coming from China to the Community
     significantly undercutting Community industry prices during the IP.
(71) There have been large capacity increases by Chinese manufacturers. This is against a
     background of no discernible future increases in domestic demand. Whilst China had
     only a small share of the Community market during the IP, its excess capacity alone
     could satisfy total Community consumption several times over.
8.3  CONCLUSION
(72) It was concluded in recitals 46 and 47 that there was a likelihood of a return to the
     dumping in significant quantities of Chinese potassium permanganate onto the
     Community market were anti-dumping measure allowed to lapse. The likely volume
     and prices of these imports would almost certainly have a profound negative effect on
     the Community market.
(73) With no ancillary increase in Community demand, the result would be to reduce
     significantly either the market share or the prices of the Community industry. In all
     probability, both would be affected resulting in a drop in profitability and ultimately in
     a threat to the future viability of the Community industry. It was therefore concluded
     that the removal of anti-dumping measure against potassium permanganate from
     China would be very likely to cause material injury to the Community industry.
9.   COMMUNITY INTEREST
9.1  INTRODUCTION
(74) Pursuant to Article 21 of the basic Regulation, it was examined whether a prolongation
     of the existing anti-dumping measures would be against the interest of the Community
     as a whole. The determination of the Community interest was based on an appreciation
     of all the various interests involved.
(75) In order to assess the likely impact of continuation or non-continuation of the
     measures, information was requested from all interested parties mentioned above.
     Questionnaires were sent to the Community producer and all known unrelated
     importers of potassium permanganate. The Community producer as well as one
     importer replied to the questionnaire. Two independent resellers of potassium
     permanganate also made submissions.
                                              13
 ---pagebreak--- (76) It should be recalled that, in the previous investigation, the adoption of measures was
     considered not to be against the interest of the Community. Furthermore, it should be
     noted that the present investigation is a review, thus analysing a situation in which
     anti-dumping measures are already in place. Consequently, this allows the assessment
     of any undue negative impact the current anti-dumping measures may have had in the
     past on the parties concerned to be taken into account.
(77) On this basis it was examined, whether, despite the conclusions on dumping, on the
     situation of the Community industry and the likely continuation and/or recurrence of
     injurious dumping, compelling reasons exist which would lead to the conclusion that it
     is not in the Community interest to maintain measures in this particular case.
9.2  INTERESTS OF COMMUNITY INDUSTRY
(78) It is considered that without maintaining the anti-dumping measures established in the
     previous investigation, injurious dumping is likely to continue/recur and that the
     situation of the Community industry, which is still fragile, will deteriorate. The
     Community industry has shown that it is able to compete on the Community market
     against competitors which do not sell at dumped prices. The Community industry has
     also shown that it has been able to benefit from the anti-dumping measures in place.
(79) During the period considered the Community industry showed that it is able to
     compete in the Community market, in the US market and in other third country
     markets where fair conditions prevail. In addition, the Community industry has shown
     that it is viable and indeed capable of benefiting from the anti-dumping measures in
     place. Improvements in productivity (recital 61) and capacity utilisation (recital 58),
     together with a return to profitability during the IP have shown that, in a market where
     measures exist to counteract injurious dumping, it is able to compete fully and
     effectively on the Community market.
(80) However, if measures against injurious dumping expire, the Community market would
     be open to large volumes of dumped imports from China. The situation of the
     Community industry would deteriorate to the extent that its viability would be put at
     risk, with detrimental effects on employment, consumer choice etc.
9.3  INTERESTS OF USERS AND IMPORTERS
(81) Only one questionnaire response was received from an importer, two submissions
     from independent resellers, and no submissions were made by end users. The importer
     made no comments either supporting or opposing the continuation of measures, whilst
     the independent resellers were in favour of maintaining the existing measures.
(82) Given this situation, the implications of an anti-dumping duty on the overall costs of
     the users and importers appear to be limited. Other imports which are in competition
     with the Community industry will ensure the maintenance of a high level of
     competition. Since the new applications for the product include drinking water and
     waste purification, and the customers in this case are not big industries but
     municipalities or public utilities, stability of supply is an important objective.
     Therefore it is in the interest of the users and, more particularly, the general public that
     the Community industry remains as a reliable supplier of this product and is not forced
     out of the market. The lack of response from importers and users suggests that the
     measures currently in force have not had a significant impact on their business.
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 ---pagebreak--- 9.4     CONCLUSION ON COMMUNITY INTEREST
(83)    The expiry of measures would have a serious impact on the economic prospects of the
        Community industry, whereas importers would only be affected, if measures were
        extended, by continuing marginal increases in costs. After balancing the various
        interests involved, it is considered that maintaining the anti-dumping measures will
        allow the present situation of fair competition to continue, by eliminating the injurious
        effects of dumping practices. Therefore, there are no compelling reasons against the
        continuation of measures.
10.     FINAL CONCLUSION
(84)    It follows that, as provided for by Article 11(2) of the basic Regulation, the anti-
        dumping measures currently in force with regard to imports of potassium
        permanganate originating in China should be maintained.
HAS ADOPTED THIS REGULATION:
                                             Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of potassium permanganate,
falling within CN code 2841 61 00, originating in the People’s Republic of China.
2. The amount of the duty applicable to the net, free-at-Community-frontier price, before
customs clearance, shall be € 1.26 per Kilogram.
3. Unless otherwise specified, the provisions in force concerning customs duties shall apply.
                                             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
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