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EU Plans to Raise Duty on Chinese Aluminum Car Wheels

Sept. 7 (Bloomberg) -- The European Union plans to increase duties on imports of car wheels from China to 22.3 percent from 20.6 percent as price-undercutting hurts makers in the 27-member bloc, according to a document from the European Commission.

Price-undercutting by Chinese producers remains substantial and may be as much as 38 percent, the commission said in the Aug. 25 document obtained by Bloomberg News. John Clancy, a trade-policy spokesman at the commission, the EU’s executive arm in Brussels, declined by telephone today to comment on the plan. EU anti-dumping duties aim to counter below-cost imports.

The duty punishes Chinese exporters including Zhejiang Wanfeng Auto Wheel Co. and Lizhong Wheel Group Ltd. Europe accounts for about 10 percent of China’s aluminum-wheel exports and demand from carmakers, such as Bayerische Motoren Werke AG, will be hit if the final duty is above 25 percent, according to Eric Zhang, an analyst at researcher Shanghai Metals Market.

“We can’t afford to ignore the impact even though Europe is a relatively small market for China’s aluminum wheels,” Zhang said in a telephone interview from Shanghai. “Anti-dumping measures are usually contagious.”

China producers boosted their share of the EU market for wheels sold directly to car owners to 34 percent in the 12 months through June last year from 22 percent in 2006, according to the document. Chinese companies’ share of wheels bought by carmakers climbed to 3 percent from 1 percent.

Producers in the EU saw their share fall to 48.5 percent from 57.4 percent for retail customers, and to 82.3 percent from 84.5 percent among carmakers in the period, the document showed.

“There is an evident link between the significant increase in Chinese import volumes at low prices and the injury observed with the Union industry,” the commission said in the document.

The commission introduced the provisional 20.6 percent duty in May. EU national governments, acting on a commission proposal, have until Nov. 11 to decide whether to impose a definitive five-year levy at the same or a different rate.

To contact the Bloomberg News staff on this story: Liza Lin in Shanghai at llin15@bloomberg.net; Li Xiaowei in Beijing at Xli12@bloomberg.net.

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net.

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