Council Regulation (EC) No 428/2005 of 10 March 2005 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the People's Republic of China and Saudi Arabia, amending Regulation (EC) No 2852/2000 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the Republic of Korea and terminating the anti-dumping proceeding in respect of such imports originating in Taiwan

• (135) The exporting producer for which the weighted average normal value was compared to prices of all individual export transactions challenged this methodology. Indeed, the company claimed that there is an economic justification for these limited number of transactions made at non-dumped prices in the last month of the IP, and therefore it is not justified to consider that a pattern of export prices by time period existed. However, it is to be noted that the economic justification of these invoices — irrespective of whether or not such a justification is relevant in this context — could not be verified with the final customer which did not cooperate during the investigation. In addition, the claim by the exporting producer that there is an economic justification for this limited number of transactions is in contradiction with information provided by the company itself, which claimed during the investigation that price compensation had taken place after the IP. Moreover, the dumping margin for the company on a weighted average to weighted average basis for the eleven months of the IP (excluding December), and for the first semester of the IP, resulted in similar levels to the one found when using the weighted average to transaction methodology for the whole IP. Given the above, the methodology of comparing the weighted average normal value to the prices of all individual export transactions is appropriate in this case.

• (136) For cooperating companies not included in the sample, the dumping margin was established on the basis of a weighted average dumping margin calculated for the companies selected in the sample. For this purpose, Sung Lim Co., Ltd., whose dumping margin is de minimis, was not considered, in accordance with Article 9(6) of the Basic Regulation.

• (137) The dumping margins established, expressed as a percentage of the CIF import price at the Community frontier, duty unpaid, are the following:

• —Huvis Corporation, Seoul 5,7 %,

• —Saehan Industries Inc., Seoul 10,6 %,

• —Sung Lim Co., Ltd., Kumi-si 0,9 % (de minimis),

• —Cooperating companies not included in the sample 6,0 %,

• —All other companies 10,6 %.

TAIWAN

• (138) Questionnaire replies were received from the two exporting producers selected in the sample.

• (139) Both exporting producers initially submitted data for all products containing polyester. However, since the present review concerns only synthetic staple fibres of polyester, not carded, combed or otherwise processed for spinning which are currently classifiable within CN code 5503 20 00 (i.e. with 50 % or more of polyester), all products that were declared by the exporting producers as containing less than 50 % of polyester were disregarded.

Normal value

• (140) For both exporting producers, sales of the like product were representative. To a large extent, normal value was based on prices paid or payable, in the ordinary course of trade, by independent customers in Taiwan, in accordance with Article 2(1) of the Basic Regulation. However, for those product types where the domestic sales were insufficient or not made in the ordinary course of trade, normal value was constructed in accordance with Article 2(3) of the Basic Regulation, as explained in recital (34). SG&A and profit were based on actual data pertaining to production and sales, in the ordinary course of trade, of the like product, by the exporting producer under investigation, in accordance with the chapeau of Article 2(6) of the Basic Regulation.

Export price

• (141) For both exporting producers export prices were established on the basis of the prices actually paid by unrelated customers in the Community in accordance with Article 2(8) of the Basic Regulation.

Comparison

• (142) To ensure a fair comparison, allowances were made for differences in transport, insurance, handling, loading and ancillary costs, packing costs, bank charges, rebates, discounts, credit costs and commissions where applicable and justified.

Dumping margin

• (143) The weighted average normal value per type of PSF was compared to the weighted average export price of the corresponding type, in accordance with Article 2(11) of the Basic Regulation, on an ex-work basis and at the same level of trade.

• (144) The comparison showed the existence of dumping for the two Taiwanese exporting producers investigated, the dumping margin being equal to the amount by which normal value, so established, exceeded the price for export to the Community.

• (145) The dumping margins established, expressed as a percentage of the CIF import price at the Community frontier duty unpaid are the following:

• —Nan Ya Plastics Corporation, Taipei 1,7 %,

• —Far Eastern Textile Ltd., Taipei 1,8 %.

• (146) Since both dumping margins are de minimis, i.e. less than 2 %, and in accordance with the Commission's consistent practice, the proceeding against Taiwan should be terminated without the imposition of measures, should the circumstances that led to these results be considered as lasting.

LASTING NATURE OF THE CHANGED CIRCUMSTANCES AND LIKELIHOOD OF CONTINUATION/RECURRENCE OF INJURIOUS DUMPINGGENERAL

• (147) In the framework of the interim review concerning Taiwan and the Republic of Korea, it was also examined whether the changed circumstances with respect to the original investigation regarding dumping and injury could reasonably be considered to be of a lasting nature in accordance with Article 11(3) of the Basic Regulation.

• (148) Moreover, with regard to Taiwan and in accordance with Article 11(7) of the Basic Regulation, it was also examined whether it was likely that dumping would continue or recur should measures be repealed.

THE REPUBLIC OF KOREA

• (149) As mentioned above, the current investigation showed the existence of dumping for two of the three exporting producers selected in the sample, albeit at a lower level than in the original investigation. With regard to the third exporting producer, as in the original investigation, dumping was found at a de minimis level.

• (150) The analysis concerning the lasting nature of the changed circumstances with regard to dumping took into account the production capacity, the evolution of the volume of sales on the domestic market, on the Community market and on the export to other third countries market, as well as the prices of the product concerned sold on each of the mentioned markets of the three exporting producers in the Republic of Korea selected in the sample, which represented more than 80 % of the exports of the product concerned to the Community during the IP.

Production capacity

• (151) The production volume of the product concerned has increased slightly by 3,5 % since 2001 (measures were imposed in December 2000), while production capacity decreased by around 4 %. Therefore, the capacity utilisation reached high levels (89 % in 2001 and 95 % during the IP) and spare capacities are low. Exporting producers did not forecast any increase in production for the next years and one of the largest exporters of the product concerned to the Community during the IP even stopped producing the product concerned after the IP.

Sales volume

• (152) The domestic market remained relatively stable during the last years. Although domestic consumption may decrease due to a possible shift of certain PSF users' production facilities outside Korea, no significant and immediate change of the domestic market is foreseeable. Even if PSF consumption in the domestic market would decrease, production may either be shifted to other polyester yarns, which is technically quite easily feasible, or the product concerned can be exported to other third countries without or with lower anti-dumping duties in place than the Community market, or both. Furthermore, Korean producers are rather export oriented companies selling over 70 % of their PSF production to third country markets. Given the relatively small dependency on the domestic market, a decrease of domestic consumption would not significantly affect the companies' profitability. Therefore, there would not necessarily be an urgent need to expand sales to other customers outside Korea by offering PSF at lower prices. On the basis of the information available, it can therefore not be concluded that a change in the size of the domestic market would automatically lead to an increase in exports of PSF to the Community at increasingly dumped prices.

• (153) As far as export sales to other third countries are concerned, these have been stable over the last three financial years, representing around 68 % of the total sales of the product concerned. There is no reason to believe that third country markets cannot absorb further exports in future, in particular when PSF demand is increasing world-wide due to a wider application of the product concerned, not limited anymore to spinning or woven, but also increasingly to non-woven applications.

• (154) Given the high capacity utilisation rate of the Korean producers, the low spare capacities as well as the rather stable situation on the domestic and other export markets, it is also unlikely that a decrease of the level of anti-dumping measures would lead to a significant increase of imports of the product concerned in the Community.

Sales prices

• (155) It was examined whether a decreased dumping margin would likely lead to a decrease of export prices which may result in higher dumping. In this regard, since measures were in force and exports to the Community were done at a stable and substantial level despite these measures, there is no indication that lower dumping margins would entail lower export prices. On the contrary, it could be argued that lower dumping duties to be paid by the importers would create a possibility for the companies in Korea to increase their prices without changing the final price paid by the unrelated customer.

Likely development of the normal value

• (156) No indications could be found that the normal value established during the present review could not be considered to be of a lasting nature.

• (157) It could be argued that the evolution of the prices of the raw materials, highly correlated to the oil prices, could have a significant influence on the normal value. It was however considered that since the raw materials are commodities for which the price is internationally determined, the effect of the increase in prices of raw materials would have the same effect on the export price as on the normal value, since all actors on the market would be affected in the same way.

Conclusions for the Republic of Korea

• (158) Given the above and in accordance with Article 11(3) of the basic Regulation, it was concluded that the changed circumstances that have led to the decrease of the dumping margin could be reasonably said to be of a lasting nature.

• (159) As far as the company is concerned for which a de minimis dumping margin was found, it should be noted that this company was already subject to a 0 % anti-dumping duty since imposition of the definitive measures in 2000. Nevertheless, despite the low priced imports from in particular the PRC and Saudi Arabia, which were in competition with the Korean imports, no dumping could be found for this company in the present interim review. There is therefore no reason to believe that this company will change its export behaviour significantly in the future.

• (160) In view of the finding of lower dumping margins for all companies concerned in Korea and that this situation is not considered to be of a short term nature, measures imposed by Regulation (EC) No 2852/2000 should be amended accordingly.

• (161) For the same reasons, the de minimis dumping margin for Sung Lim Co., Ltd. should be confirmed.

TAIWAN

• (162) The analysis took into account the production capacity, the evolution of the volume of sales on the domestic market, on the Community market and on the export to third countries (excluding the Community) market, as well as the prices of the product concerned sold on each of the mentioned markets of the two exporting producers in Taiwan selected in the sample, which represented more than 90 % of the exports of the product concerned to the Community during the IP.

Production capacity

• (163) During the last four financial years the production capacity of the two exporting producers in Taiwan has decreased by around 6,5 %. Although the capacity utilisation is overall of only 73 %, this capacity utilisation has remained stable over time. On the basis of the information available, it appears that production is shifting to other countries (Vietnam, China) where productivity is better. Therefore, even if spare capacity is available, an increase of exports to the Community should measures be repealed is not very likely, because spare capacities will be rather transferred to other third countries.

Sales volume

• (164) Over the three last financial years, the main market for the product concerned for the exporting producers has not been the Community, but other third countries. The sales volumes to the Community market were still substantial as they accounted for 24 % of the total sales quantity of the product concerned during the IP. Note, however, that this ratio has decreased over time (29 % in 2001). Despite the measures in force by other third countries (China and Japan), exports to third countries have increased by 14 % over three years, representing in the IP 62 % of the total sales quantity of the product concerned.

• (165) Sales on the domestic market during the last three financial years remained stable, representing 13,4 % of total sales of the product concerned during the IP.

• (166) Considering that the exporting producers, although being subject to anti-dumping measures in several third countries have continued to increase their exports to third countries other than the Community, and that they continued to maintain a substantial presence on the Community market, there is no clear indication that any spare capacity would be redirected towards the Community market should the proceeding against Taiwan be terminated. In this context, it is also concluded that the transfer of production capacity to third countries is unrelated to the existence of trade defence measures against imports originating in Taiwan.

Sales prices on export markets

• (167) A price comparison was made between the prices of the product concerned sold for export to the Community and for export to third countries during the investigation period.

• (168) It was found that for the global figures (including all types of the product concerned), the selling prices of the product concerned were significantly higher (more than 10 % for the last three financial years) in the Community than in third countries. However, this price difference noted between the Community market and other export markets might be explained to a large extent by the existence of high price dispersions between the product types exported by the exporting producers. Moreover, since the quantities exported to the Community despite the existence of anti-dumping measures are significant, the termination of the measures could even give the exporters a margin to increase their export price.

• (169) On this basis, there is no indication that the possibility for the companies to decrease prices to the Community is shown by the price level practised on other export markets.

Likely development of normal value

• (170) No indication had been found that could point to a change of normal value. The domestic market has remained stable and the cost situation relating to the domestic market has remained stable.

• (171) As far as the influence of raw material prices on the normal value is concerned, the conclusions of recital (157) apply also in the case of Taiwan.

Conclusions for Taiwan

• (172) The above analysis shows no indication that dumping would recur should measures be repealed.

CONCLUSION ON THE LIKELIHOOD OF CONTINUATION/RECURRENCE OF (INJURIOUS) DUMPING

• (173) The current measures in place regarding imports of PSF originating in the Republic of Korea are above what is necessary in order to remove the injurious effect of the dumped imports. Considering the likelihood that dumping would continue or recur if the measures were terminated and referring to the findings of dumping notwithstanding the measures currently in force against the Republic of Korea, it is concluded that the measures should be amended and set at the levels found in the current review.

• (174) The current measures in place regarding imports of PSF originating in Taiwan are no longer warranted. Considering that no element was found that there was a likelihood that dumping would continue or recur if the measures were repealed and referring to the findings on dumping (de minimis) resulting from the current review, it is concluded that the proceeding against Taiwan should be terminated without the imposition of measures.

• (175) The complainant Community industry objected to the proposed termination of the anti-dumping proceeding against imports from Taiwan. It was claimed that the Taiwanese market as a whole should be analysed instead of merely the situation of the sampled exporting producers because the non-sampled companies are more likely to resume exports at dumped prices should measures be repealed. It was argued that the non-sampled companies, due to their bad financial situation, would very likely seek to maximise their cash-flow by increasing their export volume (at dumped prices) which would also be confirmed by their price practices concerning exports to the USA. It was additionally claimed that, since the production capacity of these companies would represent about 66 % of the Community consumption, the impact of these exports would be significant.

• (176) It is noted that the selected sample represented not only 95 % of Taiwanese exports to the EU, but also 43 % of the Taiwanese exports to other countries, 71 % of domestic sales and 57 % of the domestic production of PSF and was therefore largely representative in accordance with Article 17 of the basic Regulation. It is also noted that the complainant Community industry did not raise any objections to the sample at a prior stage of the proceeding.

• (177) As far as the likelihood of recurrence of injurious dumping is concerned, the complainant Community industry based its arguments on mere allegations which were not supported by sufficient supporting evidence. Thus, in regard to the claim that non-sampled companies, due to their bad financial situation, would very likely seek to maximise their cash-flow by increasing their export volume to the EU at dumped prices, it is noted that cash may be generated through several different means, other than increased sales volumes, such as additional borrowings, selling unprofitable business sectors and increasing the capital by issuing shares. Likewise, no convincing evidence has been submitted concerning the allegedly dumped prices of exports to the USA. Finally, the analysis of the complainant Community industry with regard to the production capacity in Taiwan does not take into account any possible reduction of capacity in Taiwan due to dislocation of Taiwanese production facilities outside Taiwan and the bankruptcy of one of the Taiwanese producers.

• (178) Given the above, the conclusion as far as the likelihood of recurrence of dumping for Taiwan is concerned is maintained.

INJURYDEFINITION OF THE COMMUNITY INDUSTRY

• (179) The following European Community producers have supported the complaint:

• —Catalana de Polimers, S.A., Spain

• —Dupont Sabanci Polyester GmbH, Germany

• —Industrias Químicas Textiles, S.A., Spain

• —Tergal Fibres, S.A., France

• —Trevira GmbH, Germany

• —Wellman International Limited, Ireland

• (180) As these six complainant cooperating Community producers represent 49 % of the Community production of the product concerned, and since no non-complainant Community producer has expressly manifested its opposition against the initiation of the present proceeding, it is considered that the complainant producers constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the Basic Regulation. Two non-complainant producers provided general information to the Commission, but did not support the complaint.

COMMUNITY CONSUMPTION

• (181) Community consumption was established on the basis of the volume of imports of the product concerned from the countries concerned and from all other third countries known to produce and export the product concerned to the Community, plus the volume of sales in the Community market of both the Community industry and other Community producers. As only two out of 10 non-complainant Community producers submitted information on their sales, the sales of the remaining eight non-complainant producers were calculated further to data reported in the complaint lodged by the Community industry. These data were corroborated by publications of an independent consultancy firm specialised in the fibres sector.

• (182) For the sake of consistency, Eurostat was used in order to determine the volume of imports on the relevant CN codes in the present proceeding. Note that the volume of imports reported by producers in the exporting countries concerned was in line with the corresponding Eurostat figures.

• (183) On this basis, Community consumption has stagnated, passing from 712 773 tonnes in 2000 to 709 828 tonnes in the IP.

Table 1

	2000	2001	2002	IP
Community consumption (tonnes)	712 773	661 227	729 916	709 828
Index	100	94	102	99

IMPORTS OF PSF FROM THE COUNTRIES CONCERNEDCumulation

• (184) As regards Taiwan, the dumping margin found amounted to less than 2 % (see recitals (138) to (146)). Therefore, the conditions set out in Article 3(4) of the Basic Regulation to assess cumulatively imports of the product concerned from this country with imports of the product concerned from the remaining countries under consideration were not fulfilled.

• (185) The Commission considered further whether the effects of imports of PSF originating in the PRC, Saudi Arabia and South Korea (hereinafter: the ‘countries concerned’) should be assessed cumulatively in accordance with Article 3(4) of the Basic Regulation.

• (186) This Article provides that the effects of imports from two or more countries simultaneously subject to the same investigation shall be cumulatively assessed when (i) the margin of dumping established in relation to the imports from each country is more than de minimis as defined in Article 9(3) of the Basic Regulation, (ii) the volume of imports of each country is not negligible and (iii) the conditions of competition between the imported products and the conditions of competition between the imported products and the like Community product make such an assessment appropriate.

Margin of dumping and volume of imports

• (187) As indicated above, the present investigation has shown that the dumping margins established for the PRC, Saudi Arabia and South Korea are well above the de minimis level, and the volume of imports from said countries is not negligible in the sense of Article 5(7) of the Basic Regulation (their market shares attaining respectively 4,7 %, 3,1 % and 10 % in the IP).

Conditions of competition

• (188) In order to determine the appropriateness of a cumulative assessment in view of the conditions of competition between imported products and the like Community product, the Commission has initially analysed the exporters' market behaviour in terms of export prices and volumes.

• (189) Similar market behaviour of PRC, Saudi Arabian and South Korean producers in terms of export prices was found. In fact, said countries have decreased their respective average unit selling prices of PSF by 27 %, 23 % and 15 %, throughout the period under consideration. In addition, a very similar level of undercutting has been determined for imports of all the three countries (see recital (200)).

• (190) Likewise, all three countries hold significant market shares in the Community market although South Korea is by far the most important exporting country of the three countries concerned (in the IP, 4,7 % in the case of the PRC, 3,1 % in the case of Saudi Arabia and 10 % in the case of South Korea).

• (191) The investigation also determined that imports from the PRC, Saudi Arabia and South Korea into the Community used the same sales channels, as in the vast majority, said imports are traded through distributors, rather than sold to final customers.

• (192) Furthermore, as explained above (see recitals (22) and following) it has been found that the product concerned imported from the PRC, Saudi Arabia and South Korea and produced by the Community industry share the same basic technical, physical and chemical characteristics, and are to be considered alike in terms of interchangeability and substitutability, thus competing with each other on a type by type basis.

• (193) One exporting producer from Saudi Arabia claimed that PSF imported from said country is not in competition with PSF as manufactured by other countries concerned, in particular the PRC, and by the Community industry. Pursuant to this producer's submissions, Saudi Arabian production of PSF is exclusively concentrated in the basic or regular PSF, namely those types of products which are not suitable for specific applications, but rather for general use while producers in the PRC and Community producers have the capacity or actually produce so called ‘speciality’ products. These speciality products of PSF are normally branded and tailored for particular applications or final uses, such as fire retardant, anti-bacterial or non-pilling fibres and require normally advanced R&D. Some users further alleged that the so-called ‘hollow conjugate’ type, which the mentioned users have considered as a ‘speciality product’, is only supplied in the Community by South Korean producers.

• (194) These arguments were not borne out by the investigation. First of all, it was found that exports from the PRC consist of exclusively basic or regular PSF. Secondly, exports of PSF from South Korea are not concentrated in the ‘hollow conjugate’ type, as this latter represents only a 24 % of total exports to the European Community for the IP. In addition, according to the definition of ‘speciality’ types laid down above, ‘hollow conjugate’ PSF cannot be considered as a speciality type. Indeed, technical evidence has been obtained showing that all PSF producers are normally able to produce hollow conjugate PSF but most of them refrain from doing so because the production is no longer sustainable in view of the prevailing price levels. Finally, although the Community industry produced and sold ‘speciality’ products, its PSF business is mainly concentrated in the basic or regular PSF segment.

• (195) Thus, it was established that exports of the product concerned from the countries concerned compete with each other and with PSF manufactured or susceptible of being produced by the Community industry.

• (196) On the basis of the above, it was concluded that all conditions justifying the cumulation of imports of PSF originating in the PRC, Saudi Arabia and South Korea were met.

Cumulated volume and market share

• (197) Cumulated dumped imports from the PRC, Saudi Arabia and South Korea have increased from 111 905 tonnes in 2000 to 125 633 tonnes in the IP, i.e. by 12 %.

• (198) Cumulated market shares have increased from 15,6 % in 2000 to 17,6 % during the IP.

Table 2

PRC, Saudi Arabia & South Korea	2000	2001	2002	IP
Imports (tonnes)	111 905	89 457	120 847	125 633
Index	100	79	107	112
Market Share	15,6 %	13,5 %	16,5 %	17,6 %

Prices and Undercutting

• (199) The weighted average price of the dumped imports originating in the PRC, Saudi Arabia and South Korea has declined by 18 % between 2000 and the IP.

Table 3

PRC, Saudi Arabia & South Korea	2000	2001	2002	IP
Weighted average price (EUR/kg)	1,08	1,07	0,9689	0,89
Index	100	99	88	82

• (200) For the determination of price undercutting, the Commission analysed data referring to the IP. The relevant sales prices of the Community industry were those to independent customers, adjusted where necessary to an ex-works level, i.e. excluding freight costs in the Community and after deduction of discounts and rebates. Prices for the different product types of PSF defined in the questionnaires were compared with the sales prices charged by the exporters, net of discounts, by applying the necessary and warranted adjustments to bring the prices to CIF Community frontier level.

• (201) During the IP, the weighted average undercutting margin was 16 % for the PRC, 16,8 % for Saudi Arabia and 24 % for South Korea.

SITUATION OF THE COMMUNITY INDUSTRYProduction

• (202) Production in volume by the Community industry has decreased by 5 % during the period under consideration.

Table 4

	2000	2001	2002	IP
Production (tonnes)	236 902	229 598	225 290	224 649
Index	100	97	95	95

Capacity of production and capacity utilisation rates

• (203) Capacity of production of PSF has been kept stable during the period under consideration. Indeed, capacity of production has only increased from 271 466 tonnes in 2000 to 277 561 tonnes in the period under consideration. During the IP, capacity of production of the Community industry amounts to 36 % of total Community consumption.

• (204) Capacity utilisation rates have diminished by 6 percentage points from 87 % to 81 %. As capacity of production has not decreased itself, this decline in the capacity utilisation is merely due to the decrease in production volumes of the Community industry.

Table 5

	2000	2001	2002	IP
Capacity of production (tonnes)	271 466	272 561	277 561	277 561
Index	100	100	102	102
Capacity utilisation	87 %	84 %	81 %	81 %

Stocks

• (205) Stocks have increased during the period under consideration by 13 %. However, this is not considered as an indication for injury as the stock levels reflect the Community industry's policy to keep stocks at a level basically equalling one month's production.

Table 6

	2000	2001	2002	IP
Stocks (tonnes)	20 560	22 301	21 592	23 317
Index	100	108	105	113

Investments

• (206) Investments determination was based on information provided by 5 of the companies. The sixth company did not provide reliable information. During the period under consideration, the five companies providing reliable investment data have carried out investments for a value of EUR 34,5 million. As can be seen in table 7 below, investments have had an increasing trend except in 2002, when they declined with respect to the previous year. However, it was found that these investments almost exclusively consisted of replacements. Major part of the investments was directly related to the manufacture of the product concerned. Only one of the Community industry producers has carried out significant investments in a recycling plant which provides raw material (polyethylene terephthalate — PET — flakes) to the PSF production process.

• (207) It is considered that the level and nature of the investments (mainly replacements) is low for a capital intensive industry.

Table 7

	2000	2001	2002	IP
Investments (EUR) (5 out of 6 companies)	4 325 661	12 850 473	5 833 264	11 522 994
Index	100	297	132	238

Sales and market share

• (208) PSF sales by the Community industry in the European Community have declined by 6 % from 2000 to the IP. As Community consumption increased by 11 % during the period under consideration, such decrease of sales has been translated in a loss of market shares. In particular, market share of the Community industry has passed from 31 % to 29 % in the IP.

Table 8

	2000	2001	2002	IP
Sales in the EC (tonnes)	220 695	213 322	211 609	206 926
Index	100	97	96	94
Market share	31 %	32 %	29 %	29 %

Prices

• (209) The Community industry's unit selling price has decreased by 8 % during the period under consideration. As shown in table 9 below, such decrease took place after 2001, coinciding with the surge of imports from the countries concerned and the considerable decrease of prices of such imports.

Table 9

	2000	2001	2002	IP
Weighted average price (EUR/kg)	1,48	1,49	1,38	1,36
Index	100	101	93	92

Profitability

• (210) The weighted average profitability on net turnover of the Community industry decreased from 4,4 % in 2000 to – 3,2 % in the IP.

Table 10

	2000	2001	2002	IP
Weighted average profitability on net turnover	4,4 %	1,2 %	– 2,9 %	– 3,2 %

Cash flow and return on net assets

• (211) Cash flow has diminished during the period under consideration from EUR 25 687 824 in 2000 to EUR 12 178 328 in the IP.

• (212) Return on net assets was based on information provided by 5 of the companies. The sixth company did not provide reliable information. However its global return on net assets data followed the same trend as the one found for the product concerned in the other five companies. The information provided showed a dramatic decrease in return on net assets during the period under consideration. Indeed, it passed from 51,1 % in 2000 to – 8,5 % in the IP.

Table 11

	2000	2001	2002	IP
Cash flow (EUR)	25 687 824	17 843 711	14 511 142	12 178 328
Index	100	70	56	47
Weighted return on net assets (5 out of 6 companies)	51,1 %	19,9 %	47,4 %	– 8,5 %

Ability to raise capital

• (213) Some companies finance their activities from within the financial group to which they belong either through cash pooling schemes or through intra-group loans granted by the mother companies. In other cases, cash flow generated by the company is used as a source of financing. Some others increased their equity by entering into capital venture structures with financial entities, which in certain instances further financed their participating companies by means of shareholder loans.

• (214) On this basis, most Community industry companies have not shown any major difficulties to raise capital. However, one of the verified companies has found severe problems to finance its activities, both in debt and equity.

Employment and wages

• (215) Employment in the Community industry decreased by 7 % during the period under consideration. Indeed, Community industry reduced staff by 84 workers. Concerning wages, for year 2000, one of the companies did not provide reliable information. For the rest of the years comprised in the period under consideration, total wages increased 5 % far below the average increase during the period under consideration of the harmonised index of consumer prices for the four countries where Community industry is located (i.e. 9,1 %).

Table 12

	2000	2001	2002	IP
Employees	1 270	1 223	1 227	1 186
Index	100	96	97	93
Weighted average salary (EUR/year) (5 out of 6 companies in 2000)	31 993	40 340	41 054	42 430
Index		100	102	105

Productivity

• (216) Productivity for the total market was stable during the period under consideration, as it has only decreased by 2 % from 2000 until the IP. This stagnation in productivity mirrors the low level of investments carried out by the Community industry (in quality and in quantity, see recitals (206) and following).

Table 13

	2000	2001	2002	IP
Productivity (tonnes/employee)	195	195	190	192
Index	100	100	97	98

Growth

• (217) Overall, it has to be noted that the Community industry's market shares fell by 2 percentage points, which shows that its growth lagged behind the decreasing level of consumption of the overall market (which decreased by 1 %).

Magnitude of the dumping margin and recovery from past dumping

• (218) As concerns the impact on the Community industry of the magnitude of the actual margin of dumping, given the volume and the prices of the imports from the PRC, Saudi Arabia and South Korea, this impact cannot be considered negligible.

• (219) On the other hand, it is considered that the significant increase of dumped imports from the PRC and Saudi Arabia to the Community together with the unsatisfactory evolution in terms of prices of imports from South Korea have prevented the Community industry's expected recovery from the effects of past dumping.

CONCLUSION ON INJURY

• (220) Imports volumes from the PRC, Saudi Arabia and South Korea have increased considerably, both in absolute terms and in terms of market share. Indeed, during the period under consideration, they gained 2 percentage points in market share. Moreover, the weighted average price of imports from these countries has decreased by 18 % over the period under consideration. This decrease is mirrored in the significant price undercutting found.

• (221) Most of the Community industry injury indicators have shown a negative evolution during the period under consideration, which points to a situation of material injury: whereas total Community consumption of PSF has stagnated, the Community industry's total sales in volume have decreased by 6 %, with a corresponding loss in market shares of 2 percentage points; production in volume has decreased; capacity of production has stagnated and capacity utilisation has diminished by 6 %; average unit selling price has decreased by 8 %; profitability on net turnover has yielded negative results, being reduced by 7,6 percentage points during the period under consideration; other profitability related indicators as cash flow and return on net assets have also deteriorated during the period under consideration; employment and productivity decreased by 7 % and 2 % respectively. The positive developments in investments and wages do not put into question the overall injurious picture of the Community industry as the investment levels were low for such a capital-intensive industry and as the increase in wages essentially compensated for the inflation during the period under consideration.

• (222) Based on the foregoing, it follows that the Community industry is in a difficult economic and financial situation and has suffered material injury within the meaning of Article 3 of the Basic Regulation.

CAUSATIONINTRODUCTION

• (223) In accordance with Article 3(6) and (7) of the Basic Regulation, it was examined whether the material injury suffered by the Community industry had been caused by the dumped imports from the countries concerned. Furthermore, in accordance with Article 3(7) of the basic Regulation known factors other than the dumped imports, which might have injured the Community industry, were examined to ensure that any injury caused by those factors was not wrongly attributed to the dumped imports.

EFFECT OF THE DUMPED IMPORTS

• (224) Imports from the countries concerned have increased during the period under consideration, by 12 % in terms of volume, and by 2 percentage points in terms of market share. Prices of imports originating in the PRC, Saudi Arabia and South Korea decreased by 18 % and considerably undercut Community industry prices by 16 %, 16,8 % and 24 % respectively.

• (225) The increase in the volume of imports originating in the PRC, Saudi Arabia and South Korea and their gain in market share, at prices which remained well below those of the Community industry, coincided in time with the deterioration of the situation of the Community industry.

• (226) The Community industry's sales in volume and market shares have fallen. Sales in volume have decreased by 6 % and market shares diminished by 2 percentage points. The Community industry's loss of market share was fully taken over by the dumped imports from the PRC, Saudi Arabia and South Korea.

• (227) The decrease of Community industry prices occurred in parallel to the constantly decreasing trend of prices for the product concerned imported from the PRC, Saudi Arabia and South Korea. In particular, Community industry prices started to decline after 2001, at the same time when the average import prices from the PRC, Saudi Arabia and South Korea declined (see recitals (199) and (209), and tables 3 and 9 respectively). The price suppressing effect of the dumped imports could therefore be clearly established.

• (228) Profitability of the Community industry has dramatically deteriorated as from the beginning of the period under consideration and was negative in 2002 and during the IP. The losses of the Community industry from 2002 onwards coincided with the increase of the PSF imports from the countries concerned at particularly low prices. It should also be noted that one of the Community industry producers showed that its profitability on net turnover for so called basic or regular products, i.e. where the Community industry is exposed the most to competition from the countries concerned, deteriorated to a higher degree than the profitability including all types of PSF products manufactured by this producer.

• (229) The progressive increase of import volumes from the countries concerned at dumped prices also coincided with the negative evolution of other indicators showing the injurious situation of the Community industry, such as the unfavourable development of employment, capacity of production and capacity utilisation.

• (230) Based on the above considerations, it is concluded that that the dumped imports form the countries concerned had a determining role in the deterioration of the situation of the Community industry.

EFFECT OF OTHER FACTORSDevelopment of consumption

• (231) As mentioned in recital (183), from 2000 to the IP, consumption in the Community market remained stable. Thus, this cannot be a source of injury.

Lack of investments by the Community industry

• (232) The downstream industry argued repeatedly that the Community industry failed to invest in a modernised production process and would therefore be (at least partly) responsible for its injurious situation. Indeed, as indicated in recital (207), it is considered that the level and nature of the investments (mainly replacements and maintenance) is low for a capital intensive industry.

• (233) However, given the circumstances described, in recitals (202) and following, the Community industry was not in a position to make substantial new investments. As can be seen from the analysis made in this section, no circumstances other than the dumped imports were found which had a significant negative impact on the Community industry. In these circumstances, insufficient levels of investment should not be seen as the cause of the injury but rather as a further effect of the dumped imports.

Imports from other third countries

• (234) During the IP, PSF was also imported from the USA, Turkey, Japan, the Czech Republic, Poland, Nigeria and South Africa. In the analysis of whether imports from other countries might have injured the Community industry, the imports from Taiwan were also included. As mentioned in recital (145), imports from Taiwan were made at de minimis dumping levels during the IP.

• (235) Import volumes from other third countries slightly increased from 133 798 tonnes in 2000 to 137 123 tonnes in the IP. This small increase, together with the stable consumption of PSF has been translated into stagnating market shares for imports of third countries other than the ones concerned (19 % in 2000 and in the IP).

• (236) Furthermore, according to Eurostat data and to data verified on spot, for the IP, weighted average prices of the product concerned originating in the rest of the main exporting countries (1,25 EUR/kg) were at a very similar level to the weighted average prices of the Community industry. Therefore, it is concluded that these imports cannot have caused any injury to the Community industry.

• (237) Some exporting producers have alleged that Turkish exports into the Community are made at dumped prices which would have contributed to the injurious situation of the Community industry.

• (238) The vast majority of Turkish imports of PSF into the Community are distributed by one of the complainant companies, which is related to the Turkish exporting producer. However, evidence has been obtained that purchases of PSF by the complainant company from its Turkish related company were made at arm's length and aimed at supplementing the product range of the Community producer in question in periods of intensive market demand. Furthermore, these imports were not caused by any abandoned or delayed investment projects susceptible of having provoked a reduction in the production capacity of the Community related company. It was further verified that the resale of PSF of Turkish origin by the related Community importer was made at the same price level as products manufactured and sold by such related company and did not undercut average prices of the other Community industry companies.

Non complainant Community producers

• (239) Non-complainant Community producers of the product concerned held a market share of 31,5 % during the IP. During the period under consideration, their sales volume decreased by 7 % and their market share declined by 2 percentage points.

• (240) In addition, pursuant to information available, there are indications that average prices of non complainant producers are at the same level as the complainant producers' average prices. This suggests that they are in a similar situation to the Community industry, i.e. that they have suffered injury from the dumped imports. Therefore, it cannot be concluded that other Community producers caused material injury to the Community industry.

Fluctuation of raw material prices

• (241) The cost of raw materials is a substantial part of the total cost of production of PSF (about 60 % of total cost of production). As a result, PSF prices are highly dependant on the influence of raw material costs.

• (242) The production of so called virgin PSF is made out of derivatives of petroleum (mainly mono ethylene glycol — MEG — and purified terephthalic acid — PTA —). To a lesser, but increasing extent, the Community industry manufactures so called regenerated PSF out of recycled materials (polyethylene terephthalate — PET — bottles and other waste). Finally, PSF can be made out of a combination of both kinds of raw materials, derivatives of petroleum and recycled PET waste.

• (243) Prices of MEG and PTA, as derivatives of petroleum, depend on the price fluctuations of this latter. As found in the verification visits, the evolution of the price of recycled materials is usually linked to the fluctuation of MEG and PTA prices.

• (244) Based on the above, some exporting producers have claimed that injury allegedly suffered by the Community industry has been caused by the fluctuations of raw material costs, in particular by the world-wide price increase of petroleum.

• (245) In this respect, pursuant to information supplied by raw material producers, it was found that prices of MEG and PTA increased from 2002 until the end of the IP by 14 % and 13 % respectively. However, this increase in raw materials prices was not reflected in an increase of the average price of PSF sold by the Community industry (see above recital (209)), despite the fact that fibres are price sensitive products. On the contrary, EU producers' prices fell slightly over the same period. While third country producers of the product concerned can also be expected to have seen similar prices increases for the main petroleum-based inputs such as MEG and PTA, it was found that import prices of PSF from the countries concerned decreased significantly during the same period. It was found, that the Community producers were not able to pass on any increased raw material costs to their customers due to the competition from dumped imports.

• (246) In addition, any possible impact of the fluctuations of raw material prices on PSF prices is susceptible to affect both the Community industry and the exporters located in the countries concerned, as petroleum is a commodity with homogeneous pricing all around the world. Accordingly, the above claim was rejected.

Currency fluctuations

• (247) Attention was paid to currency fluctuations between the EURO and the USD. The vast majority of import transactions from the countries concerned into the European Community are negotiated in USD. The EURO has been appreciated in respect of the USD as from mid 2002, and significantly during the IP, thus favouring exports into the EURO area for that period. In view of this, some interested parties have claimed that in a ‘dollar driven’ business, the depreciation of this currency in respect of the EURO must have ‘inevitably’ favoured imports of PSF into the European Community.

• (248) In the particular case of PSF, imports from countries other than those found to be dumping have also benefited from the appreciation of the Euro. However, their volumes stagnated during the period under consideration (even slightly decreasing from year 2002 to the IP), while imports from the dumping countries have increased throughout the same period by 12 %. Although prima facie it cannot be excluded that the appreciation of the EURO vis-à-vis the USD might have favoured the imports of PSF from the countries concerned, the fact that currency fluctuations did not have an effect on imports from other countries, indicates that it can not be considered as a causal factor for the surge of dumped imports from the countries concerned.

• (249) In addition, any allegation of EURO appreciation in respect of USD as a cause of injury of the Community industry should be valid only for the period where said appreciation took place, i.e. from mid 2002 until the end of the IP, and in particular during this latter, when differences among both currencies have been more accentuated.

• (250) Therefore, it was concluded that, although the appreciation of the EURO in respect of the USD might have favoured exports of PSF into the European Community, it does not explain the significant increase of import volumes from the countries concerned as compared to the rest of world importers.

CONCLUSION ON CAUSATION

• (251) The coincidence in time between, on the one hand, the increase of dumped imports from the countries concerned, the increase in market shares and the undercutting found and, on the other hand, the deterioration of the situation of the Community industry, lead to the conclusion that the dumped imports are a cause of the material injury suffered by the Community industry. In particular, a chronological parallel evolution of decreasing average prices of imports and Community industry suppressed average prices has been found. This has led to a diminishing profitability for the year 2002 and the IP, i.e. when imports from the countries concerned grew the most and prices decreased most dramatically, yielded negative results.

• (252) After analysing some factors, such as development of consumption, imports from countries other than the concerned, the market behaviour of non-complainant producers and the low level of investments carried out by the Community industry, it is concluded that they cannot have caused material injury to the Community industry. On the other hand, although it cannot be excluded that other factors, such as the fluctuation of raw material prices and the currency fluctuations could have contributed to the injurious situation of the Community industry, the effect of said factors is not such as to alter the finding that there is genuine and substantial causal link between the dumped imports from the countries concerned and the material injury suffered by the Community industry.

COMMUNITY INTERESTPRELIMINARY REMARK

• (253) In accordance with Article 21 of the Basic Regulation, it was considered whether the imposition of anti-dumping measures would be contrary to the interests of the Community as a whole. The determination of the Community interest was based on an examination of all the various interests involved, i.e. those of the Community industry, the importers, traders and the users of the product concerned.

• (254) In order to assess the likely impact of the imposition or non-imposition of measures it was requested information from all interested parties which were either known to be concerned or which made themselves known. On this basis, the Commission sent questionnaires to the Community industry, 10 other Community producers, 23 users and 3 suppliers of raw materials. The 6 complainant Community industry producers, 2 non-complainant producers, 5 related importers, 15 users and 2 providers of raw materials replied to the questionnaire ([^E0008]).

• (255) 31 unrelated importers were known at the initiation of the proceedings. In view of that large number of unrelated importers and in conformity with Article 17 of the Basic Regulation, the Commission decided to carry out its investigation on the basis of a sample of said unrelated importers. The sample was selected on the basis of the largest representative volume of imports concerned which could reasonably be investigated within the time available.

• (256) To that purpose, five companies were initially selected for the sample, based on their volume of imports from the countries concerned. One of the five selected companies was subsequently considered as non cooperating given that it refrained to fill in the full questionnaire sent to it and then disregarded as part of the sample. The remaining four sampled companies covered 14,6 % of total imports concerned. The final sample consisted of the following companies:

• —S.I.M.P., SpA., Italy

• —Highams Group Ltd., United Kingdom

• —Tob Herman Industries, N.V., Belgium

• —Marubeni Europe plc, Hamburg Branch, Germany

• (257) On this basis, it was examined whether, despite the conclusions on dumping, on the situation of the Community industry and on causation, compelling reasons existed which would lead to the conclusion that it was not in the Community interest to impose measures in this particular case.

COMMUNITY INDUSTRY

• (258) The Community industry has suffered material injury, as set out in recitals (202) and following.

• (259) The imposition of anti-dumping measures would allow the Community industry to reach the levels of profitability which it would have been able to achieve in the absence of dumped imports, and to take advantage of developments in the Community market. This would guarantee the viability of the Community industry PSF business.

• (260) In fact, although the Community industry has managed to develop important niche markets in the segment of higher added value or speciality PSF, it must be underlined that the core business for the Community industry remains in regular fibres for both woven and non-woven applications, segments where imports from the countries concerned are increasingly present and Community industry production is exposed the most to unfair competition.

• (261) Speciality fibres generate high margins but are only sold in limited quantities. In order to maximise the capacity utilisation and to cover the fixed costs of production, the Community industry needs sales of regular or basic fibres in big volumes. For this reason, the imposition of duties shall guarantee the viability of regular or basic PSF production, as well as the continuation of the production of higher added value PSF, which strongly depends on the viability of basic PSF. It is to be noted that the main supplier of specialities at a world level is the Community industry itself, and such high added value material cannot be sourced from the countries concerned in the present proceeding. It is considered, therefore, that the imposition of measures would be in the interest of the Community industry.

IMPACT ON USERS AND IMPORTERS

• (262) As indicated in recitals (254) and (256), the Commission received 15 questionnaire replies from users, 4 full questionnaires from unrelated importers selected for the sample and 5 from related importers. In addition, three users associations have submitted information and allegations to the Commission requesting the termination of the present proceeding without the imposition of measures.

• (263) Users of the product concerned belong to the textile sector. The PSF market is divided into the spinning consumption (i.e. the manufacturing of filaments for the production of textiles, after mixing or not with other fibres such as cotton or wool), the non-woven consumption (i.e. the manufacturing of sheets and webs that have not been converted into yarns and that are bonded to each other by friction, and/or cohesion, and/or adhesion, excluding paper), and the filling consumption (i.e. the stuffing or padding of certain textile goods, as for example cushions or car seats). Most of the cooperating users in this proceeding are producers of non-woven products. Said users are members of one of the three users associations cooperating in this proceeding, which represents the non-woven industry at a European level ([^E0009]). Further to information on purchases reported in their responses to the questionnaires, cooperating users during the IP represent about 5 % of total Community consumption of PSF and about 13 % of total imports from the countries concerned. Users and importers have indicated a number of arguments against the imposition of duties.

• (264) First, the downstream industry has alleged that the Community PSF market substantially depends on external suppliers of the product concerned (the European producers can at maximum satisfy about 60 % of the PSF market demand). In this context, in terms of capacity and market shares held in the Community, two of the countries under investigation, i.e. Taiwan and South Korea, are the most important suppliers of PSF worldwide. Therefore, the level of the anti-dumping duties necessarily affects essential Community interest aspects.

• (265) PSF users have also claimed that they operate in a highly price sensitive market and that even a small increase in cost cannot be passed on to the final customer due to the already fierce competition in the end-product market (e.g. pillows, textiles, etc.), in particular from South East Asian countries and China. These countries already sell at very low prices and many European textile producers were forced to at least partly dislocate their production sites to third countries.

• (266) In addition, a number of PSF users have claimed that certain types of the product concerned (the so-called hollow conjugate products) are not produced in the Community and will not be produced by the Community producers in the near future because of the lack of the necessary technical equipment. These types of PSF have therefore to be imported (the so-called hollow conjugated products, mainly manufactured in South Korea).

• (267) Finally, the downstream industry is, as opposed to the PSF industry, labour intensive. As put forward by some interested parties, the number of employees in the downstream industry is much higher than in the capital intensive PSF industry. As an example, the European non-woven industry has a direct labour force of 16 000 persons, compared with 1 180 persons employed by the PSF industry. As reported by the non-woven producers, PSF represents on average 40 % of the total cost of production of the product manufactured by them. It has been alleged that the imposition of duties could lead to a loss of jobs or to moving manufacturing facilities overseas.

• (268) Regarding the Community market's alleged dependence on external suppliers, it is considered that, whereas duties against imports from the PRC and Saudi Arabia would be at an average level of 27 %, these countries only held 7 % of the market share during the IP. On the other hand, it is proposed to repeal the existing measures on imports from Taiwan and to reduce the duties currently applicable on imports from South Korea. It is underlined that during the IP, with the current level of measures (see recital (3)), Taiwan and South Korea held 19 % of the market share. On the other hand, as reported by one prestigious fibre market consultancy firm, major producers of PSF located in countries not subject to anti-dumping duties (mainly the USA, Mexico, Turkey and South Africa) held during the IP an excess capacity amounting to approximately 50 % of the total Community consumption. In addition, imports from these countries already hold an important share of the Community market, reaching 5,3 % in the IP.

• (269) Therefore, in spite of the proposed introduction of duties against the PRC and Saudi Arabia, and taking into account the termination of the measures against Taiwan and the reduction of those applicable on South Korea, the Community users would still be able to rely on (or to switch to) important suppliers of the product concerned, such as South Korea or on other major providers located in countries not subject to anti-dumping duties, including Taiwan.

• (270) Regarding PSF users alleged inability to pass on any increased costs arising from the imposition of anti-dumping duties, for the particular case of the cooperating users (who are almost exclusively producers of non-woven products) sourcing the product concerned from the PRC, Saudi Arabia, South Korea, and Taiwan, bearing in mind (i) that the average anti-dumping duty rate for the PRC and Saudi Arabia amounts to 34,6 %, whereas said countries held during the IP a 7,8 % of the market; (ii) that the average duty rate to be imposed on imports from South Korea decreases the average duty rate introduced against such country through Regulation (EC) No 2852/2000 by 2 percentage points and that the measures against Taiwan are to be terminated; (iii) that South Korea and Taiwan held together 19,3 % of the Community market share in the IP and (iv) that the importance of PSF in the cost of production of the finished products of the cooperating users (of non-woven products) has been established as, on average, 40 % of the costs, the increase on the cost of production on the cooperating downstream industry as a consequence of the measures to be introduced would be in the region of 0,40 %.

• (271) If, as alleged by the users, they would not be able to pass on such an increase in their cost of production to their customers, the impact on their financial situation would not be significant. It is also deemed that this low impact on the financial situation of the downwards industry shall avoid any negative effect in the job force of such an industry.

• (272) It has also been found that, despite the existence of anti-dumping and/or countervailing measures on about 50 % of imports of the product concerned from all third countries, market consumption in the non-woven segment of the market has increased during the period considered. Pursuant to information supplied by the association representing the European non-woven producers, this sector has increased its production by about 17 % for the period from 2000 to 2002.

• (273) It has also been found that the hollow conjugate PSF can in fact also be produced by the Community industry which has the necessary technical know-how and machinery. As already mentioned, this product is currently not supplied by the Community industry due to the strong price pressures of the dumped imports. Anyhow, the current measures against the Republic of Korea, namely the main supplier of hollow conjugate material, are, on average, reduced.

• (274) On the basis of the above, and taking into account the level of measures adopted and the termination of the proceeding against Taiwan, it is concluded that this would not imply a deterioration, if at all, of the situation of the users and importers of the product concerned.

IMPACT ON SUPPLIERS OF RAW MATERIALS

• (275) Two providers of raw materials have cooperated in the present proceeding by submitting a response to the questionnaire. They are petrochemical industries which supply the PSF industry with PTA and MEG. Both companies have expressly supported the imposition of duties. However, from a Community interest point of view, the position of these companies in this proceeding must be put into perspective with the fact that their sales of raw materials to the PSF industry represent a minimal part of their turnover and hence, the imposition or not of measures would not substantially alter their financial or commercial situation.

ENVIRONMENTAL CONSIDERATIONS

• (276) As indicated above, PSF can be of virgin type, made out of derivatives of petrol (MEG and PTA), of a regenerated type, made out of PET bottles and other waste, or of a combination of both types, either derivatives of petrol or recycled ones. The Commission has found that during the IP, the Community industry employed about 60 % of virgin raw materials and 40 % of recycled raw materials for the production of PSF. The Community industry envisages to progressively increase the amount of recycled raw materials used for the production of PSF. In fact, two of the Community industry companies have incorporated recycling lines in their production premises. Another one envisages to incorporate such a recycling line during 2004 and 2005.

• (277) Article 6 of the Treaty establishing the European Community (‘the Treaty’) considers environmental protection as a common policy or activity to achieve the objectives set forth in Article 2 of the Treaty, among them the sustainable development of economic activities. In this framework, the Community has considered waste prevention and waste management as one of its top priorities.

• (278) In particular, the Community has enacted legislation concerning packaging and packaging waste ([^E0010]). One of the principles underlying this legislation is the principle of recycling and reuse: if packaging waste cannot be prevented, as many of the materials as possible should be recovered, preferably by recycling methods. In this context, the European Community has recently established that not later than 31 December 2008, a minimum recycling target of 22,5 % of plastic material contained in packaging waste shall be attained ([^E0011]).

• (279) It has been found that Community PSF industry consumed 70 % of the recycling of PET bottles during the IP, being by a long way, the main end-user of such packaging waste ([^E0012]). From this data, it appears that the recycling of PET packaging waste in Europe significantly depends on the PSF industry, as it is its most important customer.

• (280) The Commission considers that the imposition of duties shall contribute to guarantee the viability of an industrial sector which, as its main customer, holds a central position in the recycling of PET packaging waste.

• (281) The above conclusion is not modified by the fact that the Community recycling industry also exports PET waste to the PRC, as put forward by some interested parties. Indeed, it has been found that the vast majority of PET packaging waste is consumed by Community PSF producers.

CONCLUSION ON COMMUNITY INTEREST

• (282) Taking into account all of the above factors, it is provisionally concluded that there are no compelling reasons not to impose anti-dumping measures.

TERMINATION OF THE PROCEEDING IN RESPECT OF TAIWAN

• (283) In view of the findings set out in recitals (143) and following, the anti-dumping measures currently in force against Taiwan are not longer warranted. In accordance with Article 11 in conjunction with Article 9 of the Basic Regulation, where, after consultation, protective measures are unnecessary and there is no objection raised within the advisory Committee, the investigation or proceeding shall be terminated.

• (284) In the light of the above, the Commission has concluded that the continuation of protective measures currently in force against Taiwan is unnecessary and that the proceeding should be terminated.

ANTI-DUMPING MEASURESINJURY ELIMINATION LEVEL

• (285) The level of the anti-dumping measures should be sufficient to eliminate the injury caused to the Community industry by the dumped imports without exceeding the dumping margin found. When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Community industry to cover its costs and obtain an overall profit before tax that could be reasonably achieved under normal conditions of competition, i.e. in the absence of dumped imports. It is considered that in the absence of dumped imports the Community industry should yield a profitability before taxes of 5 %, a level deemed appropriate in the complaint lodged by the Community industry. In the absence of any information to the contrary, this level of profit was again considered to be appropriate.

• (286) The necessary price increase was then determined on the basis of a comparison, at the same level of trade, of the weighted average import price, as established for the price undercutting calculations, with the non-injurious price for the like product sold by the Community industry in the Community market.