China Faces Threat of European Tariffs on Graphite Electrodes

The European Union threatened to impose tariffs on graphite electrodes from China four days after renewing levies against India to help EU producers including SGL Carbon SE compete with cheaper imports.

The EU opened an inquiry into whether Chinese manufacturers of graphite electrodes for electric furnaces sell them below cost in the bloc, a practice known as dumping. Steelmakers such as Germany’s ThyssenKrupp AG use such graphite electrodes.

The investigation will determine whether imports from China are “being dumped and whether this dumping has caused injury to the union industry,” the European Commission, the 27-nation EU’s trade authority in Brussels, said today in the Official Journal. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.

On Dec. 13, the EU decided to re-impose duties against India on graphite electrodes for electric furnaces for another five years in a decision that was published yesterday and took effect today. Three European manufacturers including Germany’s SGL Carbon requested the renewal of those levies, which are to counter Indian subsidies to exporters as well as dumping by those companies in Europe.

The dumping inquiry covering China stems from a Nov. 5 complaint by the European Carbon and Graphite Association on behalf of producers that account for more than half the EU’s output of graphite electrodes for electric furnaces, according to the commission, which didn’t identify any companies.

In its two decisions renewing the anti-dumping and anti- subsidy levies against India, the EU said China’s share of the bloc’s market for graphite electrodes for electric furnaces rose to 2.6 percent in the 12 months through June 2009 from 0.2 percent in 2006. Indian exporters including HEG Ltd. and Graphite India Ltd. more than tripled their combined share of the EU market to around 5 percent in the same period, the bloc said.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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