Commission Implementing Regulation (EU) 2021/1811 of 14 October 2021 imposing a provisional anti-dumping duty on imports of calcium silicon originating in the People’s Republic of China

• (252) However, as the volume of such imports was always at least 5 times lower than those from China, it is clear that Chinese imports were a more important causation factor.

• (253) Imports from other third countries were mainly from Argentina, including purchases made by one of the Union producers from a related company, but these imports were not made at volumes and prices which caused injury throughout the period considered and, as explained in recital (247), they allowed the Union industry to meet demand at concrete times of technical issues.

• (254) Therefore, while imports took place in significant quantities and at low prices from Brazil, these were not significant enough to attenuate the causal link between the substantial quantities of imports of calcium silicon from China at low prices and the injury caused to the Union industry.

5.2.6.   Export performance of the Union industry

• (255) The volume of exports of the Union producers developed over the period considered as follows:

Table 13

Export performance of the Union producers

	2017	2018	2019	Investigation period
Export volume (tonnes)	[2 931 – 3 548 ]	[2 696 – 3 264 ]	[2 119 – 2 565 ]	[1 581 – 1 914 ]
Index	100	92	72	54
Average price (EUR/tonne)	[1 196 – 1 448 ]	[1 490 – 1 804 ]	[1 492 – 1 806 ]	[1 369 – 1 657 ]
Index	100	125	125	114
Source: Union producer’s questionnaires.	Source: Union producer’s questionnaires.	Source: Union producer’s questionnaires.	Source: Union producer’s questionnaires.	Source: Union producer’s questionnaires.

• (256) Exports of the Union industry decreased by 46 % over the period considered, which was considerably less than the 75 % decrease in sales volume by Union producers on the Union market over the same period.

• (257) The average price of these exports first increased by 25 % in 2018. That level was then maintained in 2019 before decreasing to a level that was still significantly above the 2017 level in the investigation period (+ 14 %). The average price of these exports was slightly lower than that the Union industry could have achieved on the Union market in 2017, but then export and domestic sale price levels remained at similar levels for the rest of the period considered.

• (258) In view of the volumes and price levels of the Union industry exports to third countries, and given that the export sales did not deteriorate as much as the sales on the Union market (shown in Table 6), the Commission provisionally concluded that the export performance contributed, but only to a minimal extent, to the material injury suffered by the Union industry.

5.2.7.   Captive use

• (259) The Union industry used the product concerned captively to produce other downstream ferroalloys. As shown in Table 2, captive use increased in 2018 and 2019 but over the period considered it only increased by 3 %. In addition, the captive market represented less than 10 % of the total market throughout the period considered.

• (260) Therefore, it was provisionally concluded that developments in the captive market did not have a material impact on the Union industry.

5.3.   Conclusion on causation

• (261) The dumped imports from China caused material injury to the Union industry in 2019 and 2020 because of the massive market penetration achieved at the expense of the Union industry. In terms of prices, the increasing market share of imports continuously undercut those of the Union industry and created substantial price pressure and prevented the market price increases which were necessary for the Union industry to achieve reasonable profit levels.

• (262) Other factors also had an impact on the Union industry. The most important of these factors was the fall in consumption because of weaker demand from the steel industry. However, bearing in mind that the Union industry suffered falls in production, sales volume, market share and profitability much greater than the fall in consumption (50 %), and that against such a backdrop of decreasing consumption, the market share of the PRC increased by 57 %, i.e. from 38,7 % to 60,8 %, it is concluded that the fall in consumption was simply a contributing factor. The main cause of injury was the Chinese imports which had significantly penetrated the Union market at low prices throughout the period considered.

• (263) In addition, imports from Brazil, and the export performance of the Union industry impacted the situation of the Union industry. However, these factors had a very limited impact on the industry, because imports from Brazil were at similar prices to the Chinese imports but at much lower volumes. The massive Chinese imports at prices much lower than those of the Union industry are the main reason why the Union industry lost sales and could not raise its prices in line with its cost of production, which led to severe losses.

• (264) The Commission thus distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports.

• (265) On the basis of the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury. The injury is clear in the evolution of production, capacity utilisation, sales volume in the Union market, market share, employment, productivity, cost of production, profitability and return on investments.

6. LEVEL OF MEASURES

• (266) In the present case, the complainants claimed that there were raw material distortions within the meaning of Article 7(2a) of the basic Regulation. Thus, in order to assess the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation. Then it examined whether the dumping margin of the cooperating exporting producers would be higher than their underselling margin (see recitals (275) to (281) below).

6.1.   Underselling margin

• (267) The injury would be removed if the Union industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic regulation.

• (268) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country under investigation, the level of profitability needed to cover full costs and investments, research and development (R & D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

• (269) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. In 2017 and 2018, before the Union industry suffered material injury, the Union industry weighted average profitability rate was between 9,7 % and 12,5 % on turnover as shown in Table 11. Such profit margin was deemed to be the basic profit covering full costs under normal conditions of competition in this investigation.

• (270) As one of the Union producers did not produce significant quantities of calcium silicon during the investigation period, its costs were not considered reliable and appropriate for the purposes of establishing the target price. As the sales of this producer were largely made from stocks produced in 2019, the production cost of that year was considered appropriate for this investigation.

• (271) On this basis, the non-injurious price is between 1 650 and 1 750 EUR/tonne, resulting from applying the above-mentioned profit margin of between 9,7 % and 12,5 % to the weighted average cost of production of the Union producers.

• (272) In accordance with article 7(2d) of the basic Regulation, as a final step, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure pursuant to Article 11(2). Based on the evidence available at the provisional stage, the Commission established that no additional costs to the Union industry applied in this respect.

• (273) The Commission then determined the underselling margin level on the basis of a comparison of the weighted average import price of the cooperating exporting producers in the country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

• (274) The injury elimination level for ‘other cooperating companies’ and for ‘all other companies’ is defined in the same manner as the dumping margin for these companies (see recital (168)).

Company	Dumping margin (%)	Underselling margin (%)
Ningxia Ketong New Material Technology Co. Ltd	73,4	31,5
Ningxia Shun Tai Smelting Co., Ltd	132,8	43,3
Shaanxi Shenghua Metallurgy-Chemical Co. Ltd	85,9	32,8
All other companies	142,3	50,6

• (275) Since the underselling margin so calculated was lower than the margin of dumping, the Commission undertook the examination required under Article 7(2a) of the basic Regulation.

6.2.   Examination of the margin adequate to remove the injury to the Union industry

6.2.1.   Raw material distortions

• (276) The complainant provided sufficient evidence in the complaint that there are raw material distortions within the meaning of Article 7(2a) of the basic Regulation in the PRC with regard to the product concerned. According to the evidence in the complaint, electricity, accounting for 20 % of the cost of production of the product concerned, is subject to a dual pricing scheme in the PRC. Therefore, as announced in the Notice of initiation, in accordance with Article 7(2a) of the basic Regulation, the Commission investigation covered the examination of the alleged distortions and any other distortions covered by Article 7(2a) of the basic Regulation in the PRC.

• (277) The Commission first identified the main raw materials, including energy, used in the production of the product concerned by each of the cooperating exporting producers. As main raw materials were considered those raw materials which are likely to represent at least 17 % of the cost of production of the product concerned. The Commission established that electricity is the only raw material that represents more than 17 % of the cost of production of the product concerned.

• (278) The Commission then examined whether electricity is distorted by a dual pricing scheme or any other of the measures listed in Article 7(2a) of the basic Regulation. For this purpose the Commission used the information in the complaint as well as the information provided by the cooperating exporting producers. As explained in recital (21), the Commission sent a questionnaire in this regard to the GOC. The GOC did not reply to this questionnaire. Subsequently, the Commission informed the GOC by letter of 31 March 2021 that it may have to apply facts available in this regard in accordance with Article 18 of the basic Regulation. The GOC did not reply to this letter either.

• (279) In the complaint, the complainant alleged that the price of electricity in Northern provinces of the PRC is distorted by a dual pricing scheme. To support the allegation, the complaint contained a comparison of prices of electricity in Northern provinces of the PRC, in which the main exporters of the CaSi are located, and the export price of electricity exported from the same provinces, showing that consistently the latter is significantly higher.

• (280) The investigation did not find any evidence of a dual pricing scheme or any other of the measures mentioned in Article 7(2a) of the basic Regulation in the PRC. Moreover, none of the cooperating exporting producers is located in the Northern regions identified in the complaint. Two of the cooperating exporting producers stated that they purchased electricity at the market rate in their province; one of them provided evidence that the electricity rates are much higher in its region than in those identified in the complaint.

• (281) The Commission therefore provisionally concluded that, based on the evidence on file at this stage of the investigation and the specific circumstances of this case, electricity was not subject to a distortion within the meaning of Article 7(2a) of the basic Regulation.

6.3.   Conclusion on the level of measures

• (282) Following the above assessment, provisional anti-dumping duties should be set as below in accordance with Article 7(2) of the basic Regulation:

Company	Provisional anti-dumping duty
Ningxia Ketong New Material Technology Co. Ltd	31,5  %
Ningxia Shun Tai Smelting Co., Ltd	43,3  %
Shaanxi Shenghua Metallurgy-Chemical Co. Ltd	32,8  %
All other companies	50,6  %

7. UNION INTEREST

• (283) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users, such as the cored wire manufacturers and the steel industry.

7.1.   Interest of the Union industry

• (284) The Union industry represents 100 % of Union production in this investigation. A combination of factors, including increasing penetration of Chinese imports at low prices, created difficult market conditions in 2019 and this situation was made worse in 2020 by further import penetration and falls in consumption caused partly by the Covid-19 pandemic. The Union industry suffered substantial falls in production, sales volume, employment and profitability.

• (285) Ferropem, the largest Union producer, was forced to begin to implement a restructuring plan, which involved a possible closure of the main calcium silicon site at Chateau Feuillet. The imposition of measures on Chinese imports would enable Ferropem to restart calcium silicon production at another site in the Union. Employment at Chateau Feuillet site was around 250 FTEs, a significant proportion of which related to calcium silicon throughout the period considered.

• (286) Measures would improve market conditions for both Union producers, as they would help them recover lost market share and price pressure would be lifted if Chinese import prices were higher due to the anti-dumping duties. The measures would also facilitate Ferropem’s implementation of its restructuring plan.

• (287) The non-imposition of measures would put the Union industry in jeopardy because any continuation of the unsustainable situation on the market in 2019 and 2020 would threaten future production of calcium silicon in the Union.

• (288) Furthermore, the profitability, and even the existence, of the production of other ferroalloys would be threatened if such products use the same facilities as calcium silicon. This is because ferroalloy sites depend on sharing fixed costs to lower unit costs of production in order to make sites profitable.

• (289) Clearly the imposition of measures would be in the interest of both the calcium silicon industry and the wider ferroalloy sector.

7.2.   Interest of unrelated importers and cored wire manufacturers

• (290) The investigation showed that the vast majority of imports from all countries were in powder or lumps and were normally transformed into cored wire products in the Union before being sold to the largest end user industry, the steel industry. Therefore, the interest of cored wire manufacturers is considered here together with the importers.

• (291) As mentioned above, two importers submitted questionnaire replies following the decision not to apply sampling. These were Affival SAS in France and Coftech G.m.b.H. in Germany. Another cored wire manufacturer, Filo D.o.o. in Slovenia, cooperated by submitting a user questionnaire as they did not import directly themselves.

• (292) The investigation showed that the cored wire producers also manufacture other products in cored wire. For the co-operators mentioned above, the turnover of products containing calcium silicon compared to total turnover varied from below 10 % to almost 50 %.

• (293) The cored wire producers source calcium silicon from the country concerned, other third countries and the Union industry. Their main concern was that measures on Chinese imports would disrupt the calcium silicon market in the Union and may limit imports from one of their main sources of supply.

• (294) However, it is recalled that other sources of supply exist around the world, the main ones being Brazil and Argentina in the period considered and the measures are intended to restore fair competition on the Union market for the benefit of all players on that market. If measures are not imposed this could threaten the supply of calcium silicon from the two Union producers which would be to the detriment of all participants in the supply chain of calcium silicon.

7.3.   Interest of end users

• (295) Information in the complaint shows that the main user industry is the steel sector. However, calcium silicon is also used in foundries and the chemical sector.

• (296) Only one steel producer, AFV Acciaierie Beltrame S.p.A., completed a questionnaire. In addition, Eurofer and the German Steel Federation (Wirtschaftsvereinigung Stahl) made submissions relevant to the investigation.

• (297) Eurofer and the German Steel Federation submitted that the imposition of anti-dumping duties was not in the Union interest and that there was no economic justification for the imposition of anti-dumping measures. The main concern related to the availability of supply to the steel sector. It was claimed that the Union industry had never supplied more than 42 % of the Union apparent consumption.

• (298) In addition, it was claimed that capacity figures published by one of the Union producers indicated only a limited amount of free capacity. Therefore, it would be highly questionable whether the Union industry would be able to supply the users if anti-dumping duties were applied on Chinese imports.

• (299) Furthermore, they argued that there was no alternative source that could replace Chinese volumes and that duties were already levied in the Union as customs duties on imports from China.

• (300) In this respect, the Union industry submitted that it did not question that there should be space for different sources of supply, as long as such imports were made at fair prices. However, for now imports from the PRC take place at injurious levels which put Union production in jeopardy.

• (301) In terms of sources of supply, the Commission concluded that several sources of supply currently exist including the Union producers, which have ample spare capacity, and imports from China, Brazil, and Argentina. However, it was not in the Union interest to continue to allow dumped Chinese imports to threaten the existence of the Union calcium silicon industry which has traditionally supplied a large portion of the Union market. In the absence of measures, supply problems would clearly be created for the steel industry as production in the Union may no longer be possible.

• (302) The Commission also examined the likely financial impact of measures on the steel industry if measures are imposed. According to the complainant, restoring fair market conditions would not come at a disproportionate cost for the downstream industry. The information in the response of AFV Acciaierie Beltrame S.p.A. showed that calcium silicon purchases represents a very low percentage of its costs (less than 0,5 %). The imposition of measures on the steel industry will, therefore, have a marginal financial impact on the industry.

7.4.   Conclusion on Union interest

• (303) On the basis of the above, the Commission concluded that there were no compelling reasons to consider that it was not in the Union interest to impose measures on imports of calcium silicon originating in the country concerned at this stage of the investigation.

8. PROVISIONAL ANTI-DUMPING MEASURES

• (304) On the basis of the preliminary conclusions reached by the Commission on dumping, injury, causation and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

• (305) Provisional anti-dumping measures should be imposed on imports of calcium silicon originating in the country concerned, in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission compared the underselling margins and the dumping margins as stated in recital (275) above. The amount of the duties was set at the level of the lower of the dumping and the underselling margins.

• (306) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Country	Company	Provisional anti-dumping duty
PRC	Ningxia Ketong New Material Technology Co. Ltd	31,5  %
PRC	Ningxia Shun Tai Smelting Co., Ltd	43,3  %
PRC	Shaanxi Shenghua Metallurgy-Chemical Co. Ltd	32,8  %
PRC	All other companies	50,6  %

• (307) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual anti-dumping duty rates.

• (308) To ensure a proper enforcement of the anti-dumping duties, the anti-dumping duty for all other companies should apply not only to the non-cooperating exporting producers in this investigation, but also to the producers which did not have exports to the Union during the investigation period.

• (309) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

• (310) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (311) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

9. INFORMATION AT PROVISIONAL STAGE

• (312) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. Interested parties were given 3 working days to provide comments on the accuracy of the calculations specifically disclosed to them.

• (313) No comments on the accuracy of the calculations were received.

10. FINAL PROVISIONS

• (314) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

• (315) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

Country	Company	Provisional anti-dumping duty	TARIC additional code
PRC	Ningxia Ketong New Material Technology Co. Ltd, Hongguozi Industrial Zone, Huinong District, Shizuishan City, Ningxia Province	31,5  %	C721
PRC	Ningxia Shun Tai Smelting Co., Ltd, Zhongwei Industrial Park, Zhongwei City, Ningxia Province	43,3  %	C722
PRC	Shaanxi Shenghua Metallurgy-Chemical Co. Ltd, Yangxian Eco-Industrial Park, Hanzhong City, Shaanxi Province	32,8  %	C723
PRC	All other companies	50,6  %	C999

Article 2

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of 6 months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 14 October 2021.

For the Commission

The President

Ursula VON DER LEYEN