Commission Implementing Regulation (EU) 2023/2120 of 12 October 2023 imposing a provisional anti-dumping duty on imports of electrolytic manganese dioxides originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 16 February 2023, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of electrolytic manganese dioxides (‘EMD’) originating in the People’s Republic of China (‘China’, ‘the PRC’, or ‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 3 January 2023 by Autlan EMD SL (‘the complainant’) or (‘Autlan’). The complaint was supported by Tosoh Hellas Single Member S.A. The complaint was made by the Union industry of EMD in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(4) Given that the evidence on the file showed that the requirement under point (d) of Article 10(4) was not met, the Commission did not make imports of the product concerned subject to registration under Article 14(5a) of the basic Regulation.

(5) On 7 September 2023, the complainant made a request in accordance with Article 7(2a) of the basic Regulation to include the examination of alleged raw material distortions in the country concerned regarding the product under investigation to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury. The complainant provided sufficient evidence that there are no value added tax (‘VAT’) refunds on exports of manganese ore in the country concerned. VAT refund reduction or withdrawal are listed in Article 7(2a), second subparagraph of the basic Regulation, as one of the relevant raw material distortions. Evidence on file also shows that manganese ore accounts for well over the threshold of 17 % of the cost of production of the product under investigation in the country concerned as required by Article 7(2a), fifth subparagraph of the basic Regulation. The comparison of the price of manganese ore in the PRC with the undistorted price of manganese ore sold in representative international markets, published by Fast Markets (3) shows that Chinese prices are below those of representative international markets (4) within the meaning of Article 7(2a), second subparagraph of the basic Regulation. To examine the raw material distortions and to assess whether a duty lower than the margin of dumping would be sufficient to remove injury at the definitive stage, the Commission amended the Notice of Initiation of 16 February 2023 on the basis of Article 7(2a) and Article 7(2b) of the basic Regulation. The amended Notice of initiation was published on 13 September 2023 (5) (‘amended Notice of Initiation’). Further to this amendment, the Commission invited the interested parties to provide information about spare capacities in the country concerned, competition for raw materials and the effect on supply chains for companies in the Union in a free format or by completing relevant parts of the questionnaires on raw material distortions. The Commission also sent to the GOC a questionnaire concerning raw material distortions within the meaning of Articles 7(2a) and 7(2b) of the basic Regulation. The determination on the raw materials distortions will be made at definitive stage. Therefore, the provisional findings contained in this Regulation are without prejudice to the conclusions of the investigation on the raw material distortions, which will be reflected in the definitive stage of the proceeding.

(6) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the authorities of the People’s Republic of China, known importers, traders and users, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(7) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. Hearings with two users and one Union producer were held.

(8) In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

Sampling of Union producers

(9) Given the limited number of Union producers of electrolytic manganese dioxides, the Commission announced in the Notice of Initiation that it would make questionnaires available to the only two known Union producers. These two Union producers provided a questionnaire reply and no other Union producers made themselves known following the publication of the Notice of Initiation. Thus, the Commission did not have to resort to sampling.

Sampling of importers

(10) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(11) No unrelated importers provided the requested information.

Sampling of exporting producers

(12) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all known exporting producers in China to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(13) Seven exporting producers in the country concerned that exported EMD to the Union during the investigation period, provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the country concerned were consulted on the selection of the sample.

(14) Following the complainant’s comments arguing that the sample was not sufficiently representative for Germany, Belgium and Poland, where the product under investigation was predominantly sold, the Commission amended the proposed sample by including a third exporting producer. No further comments were received as regards the amended sample.

(16) One exporting producer in China requested individual examination under Article 17(3) of the basic Regulation. At this stage of the investigation, the Commission has not taken any decision about the request for individual examination. The Commission will decide whether to grant individual examination at the definitive stage of the investigation.

(17) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC, within the meaning of Article 2(6a)(b) of the basic Regulation, to the Government of the People’s Republic of China (‘GOC’).

(18) As announced in the amended Notice of Initiation, the investigation covered also raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation with regard to China. For that reason, the Commission invited the interested parties to provide information about spare capacities in the country concerned, competition for raw materials and the effect on supply chains for companies in the Union in a free format or by completing relevant parts of the questionnaires on raw material distortions. The Commission also sent to the GOC a questionnaire concerning raw material distortions within the meaning of Articles 7(2a) and 7(2b) of the basic Regulation.

(19) The Commission sent questionnaires to the Union producers, sampled exporting producers in China, traders and users. The same questionnaires were made available online (6) on the day of initiation.

(20) The Commission received replies from the sampled exporting producers and one unrelated trader in China, and only a partial reply from two other unrelated traders in China. Replies were also received from two Union producers and two users.

(22) The investigation of dumping and injury covered the period from 1 January 2022 to 31 December 2022 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2019 to the end of the investigation period (‘the period considered’).

(23) The product subject to this investigation is electrolytic manganese dioxides manufactured through an electrolytic process, which have not been heat-treated after the electrolytic process (‘the product under investigation’, ‘EMD’).

(24) The product under investigation comprises two main types: carbon-zinc grade EMD and alkaline grade EMD. Both types are produced through an electrolytic process, with an adaptation of certain parameters in the process to obtain either carbon-zinc grade EMD or alkaline grade EMD. They both normally have a high purity of manganese and are generally used as intermediate products in the production of dry cell consumer batteries. The product under investigation may also be used in limited quantities in the other industries such as chemical, pharmaceutical and ceramics (7).

(25) The investigation has shown that, despite some differences in terms of certain specific physical and chemical characteristics such as density, mean particle size, Brunauer-Emmet-Teller (BET) surface area and alkaline potential, both types of the product under investigation share the same basic physical, chemical and technical characteristics and are used for the same purposes. They are therefore considered to constitute a single product for the purpose of this proceeding.

(26) The product concerned is product under investigation originating in China, currently falling under CN code ex 2820 10 00 (TARIC code 2820100010) (‘the product concerned’).

(28) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(29) An exporter, Guizhou Manganese Mineral Group (‘GMMG’), claimed that the types of EMD products covered by this investigation have a wide range of uses, involving multiple industries and not only the production of dry cell consumer batteries. The imposition of antidumping measures on not heat-treated electrolytic manganese dioxide is likely to have a wide-reaching impact on multiple industries, as it would block the diverse and high-quality demand for EMD from the Union’s disposable battery and new energy power battery industries as well as other industries such as chemical, pharmaceutical and ceramics. GMMG claimed that the Union producers may not be able to meet the requirements of other industries (like chemical, pharmaceutical and ceramics) in terms of quantity and quality.

(30) These other types of EMD users (8) did not come forward and did not express such concerns in the framework of this investigation. Besides, the investigation found that the Union producers supply these other types of users too. GMMG’s argument was therefore rejected.

(31) GMMG also claimed that the Union producers are not able to supply EMD for a number of specific battery technologies (e.g. batteries for electric vehicles), where EMD is used (9). However, these technologies are currently not utilised in a large-scale production and are not used in the Union’s electric vehicle battery industry. Therefore, there is no indication that the Union producers would not supply to these industries using those technologies, should there be a demand. The argument of the party was therefore rejected.

(32) GMMG further claimed that the special electrolytic manganese dioxide required by the button battery producers, needs to be processed by special processes involving physical and chemical treatment, while the Union producer in Spain allegedly cannot produce such product according to the current production technology.

(33) The investigation found that Autlan (the Union producer in Spain) has not yet received any request to supply EMD for the production of button batteries. Hence, without any specific technical specifications there are no indications whether it can supply EMD for the such end-product. On the other hand, the Union producer in Greece supplied button battery producers during the period considered. The argument of the party was therefore rejected.

(34) Five months after the initiation of the investigation, Autlan, requested to apply the anti-dumping measures imposed on EMD originating in China, if any, to EMD of Chinese origin contained in manganese dioxide alkaline and non-alkaline dry cell batteries imported into the Union from China. Those dry cell batteries fall under CN codes 8506 10 11, 8506 10 18, 8506 10 91 and 8506 10 98. Autlan provided an estimated development of imports of EMD contained in manganese dioxide alkaline dry cell batteries (10), demonstrating that imports of such batteries, as well as their EMD content, have increased sharply since 2019. The party claimed that EMD contained in manganese dioxide alkaline and non-alkaline dry cell batteries formed part of the product under investigation in the complaint referred in recital (2).

(35) The Commission rejected the request. In the complaint, the product allegedly being dumped was defined as ‘electrolytic manganese dioxides (i.e. manganese dioxides produced through an electrolytic process) not heat-treated after the electrolytic process originating in the People’s Republic of China, usually declared for importation into the European Union within Combined Nomenclature (CN) code ex 2820 10 00’. Manganese dioxide alkaline and non-alkaline dry cell batteries are the downstream products of the product under investigation. Though imports of dry cell batteries were mentioned in the complaint, the product definition did not mention them, nor did it request to cover EMD included in batteries. Indeed, all the evidence in the complaint refers only to EMD, and never to EMD contained in batteries (11). Further, the complaint clearly identifies dry cell battery producers, as the user industry. There was therefore no evidence provided in the complaint that the EMD contained in manganese dioxide alkaline and non-alkaline dry cell batteries, falling under CN codes 8506 10 11, 8506 10 18, 8506 10 91 and 8506 10 98 were dumped or that they caused injury to the Union industry.

(36) Consequently, the Notice of Initiation defined ‘the product subject to this investigation is electrolytic manganese dioxides (namely manganese dioxides produced through an electrolytic process) not heat-treated after the electrolytic process’ and ‘the product allegedly being dumped is the product under investigation, originating in the People’s Republic of China, currently classified under CN code ex 2820 10 00 (TARIC code 2820100010). The CN and TARIC codes are given for information only, without prejudice to a subsequent change in the tariff classification. The scope of this investigation is subject to the definition of the product under investigation’. It follows, that the procedure for the determination of dumping and injury, as well as the assessment of Union interest did not include collection and analysis of the information on the EMD contained in manganese dioxide alkaline and non-alkaline dry cell batteries.

(37) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to China, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

(38) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in China to provide information regarding the inputs used for producing EMD. Seven exporting producers submitted the relevant information.

(39) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. No reply was received from the GOC. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC. The Commission invited the GOC to submit its comment on the application of Article 18. No comments were received.

(40) In point 5.3.2 of the Notice of Initiation the Commission also specified that, in view of the evidence available, a possible appropriate representative country was Colombia, pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. The Commission further stated that it would examine other possibly appropriate representative countries in accordance with the criteria set out in 2(6a)(a) first indent of the basic Regulation.