Council Regulation (EC) No 893/2008 of 10 September 2008 maintaining the anti-dumping duties on imports of polyester staple fibres originating in Belarus, the People’s Republic of China, Saudi Arabia and Korea following a partial interim review pursuant to Article 11(3) of Regulation (EC) No 384/96

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (1) (the basic Regulation), and in particular Article 11(3),

Having regard to the proposal submitted by the Commission after consulting the Advisory Committee,

Whereas:

(1) The Council, by Regulation (EC) No 428/2005 (2) imposed a definitive anti-dumping duty on imports of polyester staple fibres (PSF as defined in more detail in recital (15)) originating in the People’s Republic of China (PRC) and Saudi Arabia and amended Regulation (EC) No 2852/2000 (3) imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the Republic of Korea (Korea). On 8 July 2008, the Court of First instance annulled Article 2 of Regulation (EC) No 428/2005, to a limited extent, in relation to the anti-dumping duty imposed on exports into the European Community of goods produced and exported by the Korean company Huvis Corp (4).

(2) The Council, by Regulation (EC) No 1799/2002 (5) imposed a definitive anti-dumping duty of imports of PSF originating in Belarus. The measures imposed by that Regulation expired on 11 October 2007.

(3) Following a withdrawal of the complaint, the Commission, by Decision 2007/430/EC (6) (the termination Decision) terminated an anti-dumping proceeding concerning imports of PSF originating in Malaysia and Taiwan (the previous investigation). In accordance with Article 9(1) of the basic Regulation it was considered that the termination of anti-dumping duties on imports from Malaysia and Taiwan was not against the Community interest.

(4) Having determined that there was sufficient prima facie evidence that the measures in force at the time could be no longer appropriate because their maintenance could be against the Community interest, the Commission initiated, on its own initiative, on 30 August 2007, by a notice published in the Official Journal of the European Union (7), a partial interim review of the measures, in force on that date, applicable to imports of PSF originating in Belarus, Korea, Saudi Arabia and the PRC (the countries concerned). The review is limited to the examination of whether or not the continued imposition of measures is not against the Community interest, with the decision thereon possibly having retroactive effect as of 22 June 2007, i.e. the entry into force of the termination Decision.

(5) As mentioned above, the anti-dumping measures imposed on imports originating in Belarus lapsed on 11 October 2007. As a consequence, the review concerning Belarus has been discontinued. However, it was formally conducted until that date and the Commission considered in particular the question of retroactive repeal of measures in force between 22 June 2007 and 11 October 2007, should the conclusions warrant this.

(6) The Commission officially advised the Community producers, the suppliers, the importers and users as well as associations of users and producers, exporters, and representatives of the countries concerned of the initiation of the proceeding. All interested parties were given the opportunity to make their views known in writing and to request a hearing.

(7) All interested parties who so requested and showed that there were particular reasons why they should be heard, were granted a hearing. Complete questionnaire replies were received from 12 producers, 10 users, three importers, one European association of producers, one Austrian-German association of producers, one German federation of users, two associations belonging to this federation and one European association of users.

(8) Further, the Commission received submissions from other producers, users and importers which did not provide a complete answer to the questionnaire.

(9) Among the producers and users that participated in the investigation there are two vertically integrated groups that produce PSF (in part or in whole) for captive consumption.

(10) Finally, one association of Chinese exporters and two Korean exporters, assisted by their Authorities, have made their views known.

(11) Exporters from Belarus and Saudi Arabia did not make their views known. In addition, no parties made comments regarding the measures in relation to these two countries.

(13) The review investigation period (RIP) covered the period from 1 July 2006 to 30 June 2007. The examination of trends relevant for the assessment covered the period from 1 January 2004 to the end of the RIP (the period considered).

(14) It is recalled that in the previous investigation, the investigation period covered the period from 1 January to 31 December 2005 and the examination of trends relevant for the assessment covered the period from 1 January 2002 to 31 December 2005.

Product concerned

(15) The product concerned is the same as in the investigations mentioned in recitals (1) to (3): synthetic staple fibres of polyesters, not carded, combed or otherwise processed for spinning. It is currently classifiable within CN code 5503 20 00 . It is commonly referred to as polyester staple fibres (PSF).

(16) The product is a basic material used at various stages of the manufacturing process of textile products. The Community consumption of PSF is either used for spinning, i.e. manufacturing filaments for the production of textiles, mixed with other fibres such as cotton and wool or for non-woven applications such as filling, i.e. stuffing or padding of certain textile goods such as cushions, car seats and jackets.

(18) As shown in the table above, consumption of PSF has slightly decreased during the period considered. This trend is in clear contrast with the situation examined in the previous investigation where consumption in the Community, as indicated in the Regulation imposing provisional duties (8), increased by 3 % during the period considered in that investigation (2002 to 2005).

(20) The sharp increase of imports from Korea during the RIP was mainly due to the imposition of provisional anti-dumping duties on Taiwanese imports during the first semester of 2007 (9). Both Korea and Taiwan are the main suppliers of Low Melt Polyester (LMP) and Hollow Conjugated Siliconised polyester (HCS). Since the level of provisional duties imposed on Taiwanese imports reached 29,5 % for certain companies, Community importers decided to source LMP and HCS from Korea where the level of anti-dumping duties was significantly lower.

(21) During the period considered imports from other third countries have increased by 49 %. The reason for such increase is linked to the imposition in March 2005 of anti-dumping duties on imports from Saudi Arabia and the PRC and the repeal of anti-dumping measures on imports from Indonesia, Thailand and India in October 2006.

(22) Globally, imports have therefore increased from approximately 370 KT to approximately 400 KT over the period. If one uses the investigation period of the previous investigation as a starting point, the increase has been from approximately 380 KT to approximately 400 KT.

(23) During the RIP, PSF was manufactured by 19 producers in the Community. Cooperation from Community producers was very high in this investigation. Amongst the 19 community producers, 12 producers accounting for 70 % of production have fully cooperated. Other Community producers have made submissions in relation to the investigation but have not provided full cooperation. Moreover, two associations of producers (CIRFS and IVC) (10) have also submitted their comments. In addition, all Community producers have provided information on their production. If all submissions received (individual producers and associations) are taken into account, it can be concluded that Community producers accounting for 88 % of Community production have made their views known and are against the termination of the measures. This level of cooperation is significantly higher than in the previous investigation where only three companies accounting for slightly more than 25 % of Community production and one association of producers (CIRFS) cooperated with the Commission and subsequently withdrew the complaint.

(24) The Commission examined all relevant economic factors and indices having a bearing on the situation of the Community producers.

(25) As indicated above, during the RIP, PSF was manufactured by 19 producers in the Community. These 19 producers thus constitute the total Community production within the meaning of Article 4(1) of the basic Regulation.

(26) Twelve Community producers (Advansa GmbH, Fibracat Europa S.L., Fidion S.r.l., Frana Polifibre SpA, Greenfiber International S.A., IMP Comfort Sp.z o.o., Märkische Faser, Nurel S.A., ORV Manufacturing SpA, Silon s.r.o., Trevira GmbH and Wellman International Ltd) fully cooperated in the investigation. During the RIP they produced 347 640 tonnes and they account for 70 % of Community production. Accordingly they represented a major proportion of the total Community production of the product concerned during the RIP.

(27) It was therefore considered that the 12 Community producers that have fully cooperated with the investigation represented the Community industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation. They are herein referred to as the ‘Community industry’.

Production

(29) After a decrease in 2005, Community production has increased by 10 % compared to the situation in 2004. This increase is linked, inter alia, to the setting up of new PSF plants in Poland and Romania in 2006. It is expected that production will continue to grow in the future with the consolidation of the activities of the new abovementioned plants and the starting up of another plant in Bulgaria with an annual capacity of between 12 000 and 14 500 tonnes. As for market share, it also decreased in 2005 and rose in 2006 and 2007. If we compare this table with production of the Community industry of the previous investigation (as defined in recital (70) of the Regulation imposing provisional duties) (11) during the period considered in that investigation (2002 to 2005), the trend has changed. Indeed, between 2002 and 2005, the production of that Community industry decreased by 9 % whereas during the period considered in this investigation production of Community industry has increased by 10 %. As regards market share the situation is different as well. Indeed, market share of the Community industry in the previous investigation decreased by 2,3 percentage points whereas in the present investigation the market share of the Community industry has increased by almost 5 percentage points.

(31) During the period considered the turnover of the Community industry in the Community and the quantity of PSF sold have increased by 13 % and 7 % respectively. These increases are linked to the starting up of two new plants in 2006 in Poland and Romania. If we compare these data with those of the previous investigation where there was a decrease of 1 % in sales volume during the period considered, the situation has radically changed and evidence shows that Community industry has made a significant effort to meet the demand.

(35) Between 2004 and the RIP, the level of investments of the Community industry increased by 109 %. This increase is explained to a large extent by the installation of new plants in Poland and Romania that started to operate in 2006.

(36) The investigation has concluded that, contrary to the case mentioned under recital (3), the Community industry is expanding its interest in and production of this product, and that its viability has been reinforced.

(37) The Community industry has been able to increase its market share by almost 5 percentage points during the period considered. However, this increase took place in a period where consumption decreased by more than 1 %.

(38) Over the period considered the sales price of the Community industry increased by 6 % but there has been a slight decrease since 2005. In this context account should be taken of the fact that, as explained in recital (32) this price increase occurred at a time when costs rose by 10 %.

(39) Furthermore, there has been a substantial increase in terms of employment due to the opening up of two new plants (13). As far as profitability is concerned, the situation has deteriorated during the last years, although there has been an improvement between 2006 and RIP. In order be able to maintain its position in the market, the Community industry is obliged to sell at a loss.

(40) Having regard to the above, it can be concluded that, although the Community industry has benefited to some extent from the anti-dumping measures imposed on imports from the countries concerned, it has not recovered from past dumping and is still in a fragile and vulnerable situation. Should measures disappear, imports at the same and/or increased levels from the countries concerned would in all likelihood aggravate this situation.

(41) Spare capacity in the PRC accounts for around 3 million tonnes which corresponds to 3,5 times total Community consumption. This spare capacity has increased by 37 % since 2005 (the year when the anti-dumping measures were imposed on imports from the PRC). As for Korea, spare capacity during the next year will be of 114 000 tonnes which corresponds to 14 % of total Community consumption. Even if part of this spare capacity corresponds to the company for which a 0 % anti-dumping duty is applicable, most of it corresponds to companies subject to anti-dumping duties. There is no data available for Saudi Arabia. As for Belarus, there is no need to make a prospective analysis on spare capacity because the measures expired in October 2007. The spare capacity of these countries could be directed to the Community should measures be repealed.

(42) Some of the largest export markets in the world are protected by anti-dumping duties for imports of PSF originating in the PRC and Korea. Indeed, duties for imports from the PRC are in place in Turkey and the USA and they reach as much as 44,3 % in the USA. Moreover, Korean exports are subject to anti-dumping duties ranging between 0 % and 24,6 % in Japan, Turkey, Pakistan and the USA. If the measures in question, as outlined in recital (4), are repealed, the European Union will be the one of most important markets of some size for which exports from the PRC and Korea would not be subject to anti-dumping measures.

(44) This is a clear sign that exports of PSF from the PRC are growing and are expected to grow in the future in spite of the claim that the PRC discourages exports of PSF. The argument is therefore rejected.

(45) An association of users has indicated that producers of yarns and non-wovens made from PSF often have a clear interest to buy fibres originating in the EU in order to produce originating yarns and non-wovens and export them to countries with preferential agreements. However, the data provided by users in the present investigation show that 85-100 % of the turnover of companies in the non-woven sector for products incorporating PSF is made through sales in the Community. Accordingly, the rules of origin for exports to countries with preferential agreements should not play a significant role for users of PSF when making decisions on the origin of the products in the moment of their acquisition. In the absence of evidence to support the association’s argument, the argument is therefore dismissed.

(46) It is therefore concluded that, given the incentives observed above, there is a likelihood that significant quantities will be exported to the Community, should anti-dumping measures in force be lifted.

(47) The Community industry has made a substantial effort in terms of investments which has been translated into a significant expansion. The Community industry situation has changed substantially over the last years, as evidenced in particular by the appearance of new industry in Poland and Romania and the foreseen expansion in Bulgaria.

(48) Despite these renewed efforts in terms of expansion and investments it should however, as stated before, be noted that the situation of the Community industry in terms of profitability is still precarious. There will be, in all likelihood, a significant quantity of dumped imports if anti-dumping measures were to be removed.

(49) Large import volumes at dumped prices would lead to additional price pressure on Community industry, reduced profit margins and profitability and increased losses. This could have as a consequence the likely cancellation of further investment, a decline in innovation, the erosion of the competitive position of integrated industry, cutbacks and closures.

(50) Having regard to the above, if the Community industry were exposed to significant volumes of imports from the PRC, Korea and Saudi Arabia at dumped prices and without measures, this would cause a further deterioration of their financial situation. On this basis, it is therefore concluded that the repeal of the measures would be against the interest of Community industry.

(51) The market for products incorporating PSF is divided into (a) the spinning applications (i.e. the manufacturing of filaments for the production of textiles, after mixing or not with other fibres such as cotton or wool), (b) the non-woven applications: the manufacturing of sheets and webs, not converted into yarns, excluding paper and (c) the filling applications (i.e. the stuffing or padding of certain textile goods, as for example the cushions or car seats).

(52) Sixteen industrial users have sent submissions in relation to the present investigation. They represent 17 % of total Community consumption of PSF and around 13 % of imports from the countries concerned. However, full cooperation was obtained only from 10 users (14) representing around 12 % of total Community consumption of PSF (all these users that have fully cooperated belong to the non-woven and filling sectors). As regards the other users having partially cooperated, only one operates in the spinning sector.

(53) Furthermore, Gesamtverband Textil + Mode (the German federation of textile industries representing both the spinning and the non-woven sectors), two associations belonging to the said federation: Industrieverband Garne-Gewebe-Technische Textilien e.V. (IVGT) and Verband der Deutschen Heimtextilien-Industrie e.V. and one European association representing companies of the non-woven sector (EDANA) have made submissions asking the Commission to terminate the existing measures. All the users mentioned above are members of one or more of these associations. The representativity of these associations corresponds to around 30 % of total Community consumption of PSF.

(54) The level of cooperation of individual users in this proceeding is higher than in the previous investigation. It should also be noted that in the previous investigation only the users in favour of non-imposition of duties (around 10 % of total consumption) made their views known whereas in this proceeding users which are in favour of maintaining the measures have also participated.