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OTTAWA, November 2, 2007

RR-2007-002
4366-34

STATEMENT OF REASONS

Concerning a determination under paragraph 76.03(7)(a) of the
Special Import Measures Act regarding

XANTHATES ORIGINATING IN OR EXPORTED FROM THE
PEOPLE’S REPUBLIC OF CHINA

DECISION

On October 18, 2007, pursuant to paragraph 76.03(7)(a) of the Special Import Measures Act, the President of the Canada Border Services Agency determined that the expiry of the finding made by the Canadian International Trade Tribunal on March 4, 2003, in Inquiry No. NQ-2002-003, concerning xanthates originating in or exported from the People’s Republic of China would likely result in the continuation or resumption of dumping of the goods into Canada.

TABLE OF CONTENTS

• SUMMARY
• BACKGROUND
• PRODUCT INFORMATION
  • Product Definition
  • Product Description
  • Product Information and Uses
  • Product Process
• CLASSIFICATION OF IMPORTS
• PERIOD OF REVIEW
• CANADIAN INDUSTRY
• CANADIAN MARKET
• ENFORCEMENT
• PARTICIPANTS
• INFORMATION USED BY THE PRESIDENT
  • Administrative Record
  • Procedural Issues
• POSITION OF THE PARTIES
  • Parties Contending that Resumed or Continued Dumping is Likely
  • Parties Contending that Resumed or Continued Dumping is Not Likely
• CONSIDERATION AND ANALYSIS
  • Likelihood of Continued Resumed Dumping
• CONCLUSION
• FUTURE ACTION
• INFORMATION

SUMMARY

1. On June 20, 2007, the Canadian International Trade Tribunal (Tribunal) issued a Notice of Expiry Review¹ with respect to its finding made on March 4, 2003, in Inquiry No. NQ-2002-003,² on xanthates from the People’s Republic of China (China).  As a result, on June 21, 2007, the Canada Border Services Agency (CBSA) initiated an investigation to determine whether the expiry of the finding is likely to result in the continuation or resumption of dumping of the goods into Canada.
   
   
2. Charles Tennant & Company (Canada) Ltd. (Charles Tennant), the only Canadian producer of xanthates, provided information in support of the position that if current anti-dumping measures against China expire, continued or resumed dumping of xanthates is likely. ³
   
   
3. Only one other party, Aslchem International Inc. (Aslchem), a Canadian importer, provided information to the CBSA concerning this expiry review investigation.⁴  It supported the position that if current anti-dumping measures against China expire, continued or resumed dumping of xanthates is not likely.
   
   
4. In deciding the likelihood of continued or resumed dumping of the subject goods, consideration was given to the factors found under subsection 37.2(1) of the Special Import Measures Regulations (SIMR). Evidence was placed on the administrative record for the following factors:
   
   
   • whether there has been dumping of the goods while the finding was in effect;
   • performance of the exporters in respect of production, prices and exports;
   • likely future performance of the exporters in respect of production, prices and exports;
   • anti-dumping measures in place in other countries with regard to similar products produced in China; and
   • changes in market conditions internationally, with regard to supply, demand and prices.
   
   
5. An analysis of the factors found that Chinese xanthate exporters have maintained a presence in Canada while the finding was in place; have recently shown renewed interest in selling into the Canadian market; have a combined production capacity that exceeds world demand; continue to increase xanthate production; and compete at low prices throughout the world.
   
   
6. For the foregoing reasons, the President of the CBSA, having considered the relevant information on the record, determined on October 18, 2007, under paragraph 76.03(7)(a) of the Special Import Measures Act (SIMA) that the expiry of the finding made by the Tribunal on March 4, 2003, concerning xanthates originating in or exported from China, would likely result in the continuation or resumption of dumping of the goods into Canada.
   
   

BACKGROUND

7. The original anti-dumping investigation into xanthates originating in or exported from China was initiated on June 21, 2002, following a complaint made by Charles Tennant.
   
   
8. On November 4, 2002, the Commissioner of Customs and Revenue made a preliminary determination of dumping from China, followed by a final determination of dumping on February 3, 2003.  On March 4, 2003, the Tribunal issued an injury finding.  Since then, subject imports have been monitored for anti-dumping purposes.
   
   
9. The CBSA completed its last reinvestigation of the normal values and export prices of xanthates on March 15, 2007.  The results of this review were made public in Customs Notice 07-011 on May 3, 2007.⁵
   
   
10. On May 1, 2007, the Tribunal issued a notice concerning the upcoming expiry of its injury finding.⁶  Based on the available information and the information submitted by interested parties, the Tribunal decided that a review of the finding was warranted.
    
    
11. On June 20, 2007, the Tribunal, pursuant to subsection 76.03(3) of SIMA, initiated an expiry review of its finding issued on March 4, 2003, in Inquiry No. NQ‑2002-003, concerning xanthates originating in or exported from China.  A decision to continue or rescind the finding must be made by March 3, 2008.
    
    
12. On June 21, 2007, the CBSA initiated an expiry review investigation to determine whether the expiry of the finding is likely to result in the continuation or resumption of dumping of the goods from China.  The President made his decision that the expiry of the finding would likely result in the continuation or resumption of dumping on October 18, 2007.
    
    

PRODUCT INFORMATION

Product Definition

13. The goods subject to this expiry review are defined as:
    
    xanthates of all grades in dry or liquid forms, excluding cellulose xanthates, originating in or exported from China.
    

Product Description

14. Xanthates are water-soluble chemicals that are used primarily in the mining industry.  Other names for xanthates include xanthogenates, carbondithioates, dithiocarbonates and sodium or potassium salts of xanthanic (or dithiocarbonic) acids.
    
    
15. The subject goods include all grades of sodium or potassium salts of ethyl, butyl (isobutyl, normal butyl, secondary butyl), propyl (isopropyl, normal propyl) and amyl (isoamyl, normal amyl, secondary amyl) xanthates, in dry forms, such as powder, granules, pellets, tablets or flakes, or liquid forms, such as solution or slurry.  Xanthates in dry forms and liquid forms can be used interchangeably.
    
    
16. The subject goods do not include cellulose xanthates, which are produced as intermediates in the production of viscose (rayon) and cellophane.
    

Product Information and Uses

17. Xanthate is the common name for chemical reagents used in the flotation of base and precious metals, which is the standard method for separating valuable minerals, such as gold, copper or zinc (referred to as “values”), from non-valuable minerals, such as limestone or quartz.
    
    
18. To extract values, conditioned ores are mixed in a solution of water and xanthates and then agitated in flotation cells, which resemble large washing machines.  Xanthates may be added in liquid or solid form.  The xanthates cause the minerals to attach themselves to air bubbles and then float to the top of the flotation cell.  As values reach the surface, the bubbles form a froth that overflows into a trough for collection.  The residual may be re-used for additional recovery or removed for disposal.  Most of the xanthates are consumed in the process.
    
    
19. Several separate flotations are typically required for different ores.  Since each ore is unique, there is no standard flotation procedure and no standard grade or type of xanthate used to extract specific values.  Each producer has its own grades for xanthate composition, including purity, which is stated as a minimum percentage up to 100 per cent, and moisture.
    
    
20. Four types of xanthates (ethyl, butyl, propyl and amyl) are produced in various combinations with sodium and potassium, which are stabilizers in the chemical formula.
    
    
21. Mine operators may use different xanthates to extract the same value.  Certain xanthates are stronger than others, for example, potassium amyl xanthate (PAX) versus potassium ethyl xanthate (PEX).  PAX is therefore used to produce high-grade concentrates or to promote the flotation of difficult-to-float minerals.  A mine operator may, however, decide to use PEX if a cost benefit can be made.
    
    
22. Xanthates are also used as defoliants, herbicides, insecticides and fungicides in agricultural production and as additives in the curing and vulcanization of rubber, and as high-pressure lubricant additives.  Reported new uses of xanthates include inhibition of fertilizer nitrogen transformation and colour development for image-recording materials.
    

Production Process

23. Xanthates are prepared by reacting sodium or potassium hydroxide with an alcohol and carbon disulphide. In most commercial processes, the end product of the reaction is a wet mixture, which is then dried, normally in a vacuum dryer to allow the lowest temperature possible to be used. Since the decomposition of xanthate increases with temperature, the lower the temperature, the higher are the quality and yield.

CLASSIFICATION OF IMPORTS

24. Prior to December 31, 2006, xanthates were properly classified under the following Harmonized System (HS) classification numbers:
    
    

    2930.10.10.10

    2930.10.10.20

    2930.10.10.90

    2930.10.90.00

    
    
25. Effective January 1, 2007, xanthates are now properly classified under the following HS classification numbers:
    
    

    2930.90.21.10

    2930.90.21.20

    2930.90.21.90

    2930.90.29.00

PERIOD OF REVIEW

26. The period of review (POR) for this expiry review investigation in respect of sales and costing data requested from participants is January 1, 2004 to March 31, 2007.  The President also considered additional information placed on the administrative record up to the closing of the record date, which was August 9, 2007.

CANADIAN INDUSTRY

27. As stated previously, Charles Tennant is the only Canadian producer of xanthates.  It was established in Canada in 1932 and is wholly owned by Tennants Consolidated Ltd. of the United Kingdom.  Charles Tennant’s manufacturing division, Prospec Chemicals Ltd., produces the goods in Fort Saskatchewan, Alberta.  Charles Tennant’s head office is located in Weston, Ontario.
    
    

CANADIAN MARKET

28. Detailed information regarding the volumes of sales of xanthates throughout the POR by the Canadian producer and importers cannot be divulged for confidentiality reasons.
    
    
29. It is important to note, however, that Canadian import statistics during the POR are overstated as much of the imported goods from China were subsequently re-exported out of the country.
    
    
30. Overall, the information shows a slight decrease in the Canadian market for xanthates since 2004.
    

ENFORCEMENT

31. Detailed information regarding the anti-dumping duty liability for xanthates from China throughout the POR cannot be divulged for confidentiality reasons.  Anti-dumping duties were imposed where applicable.

PARTICIPANTS

32. On June 20, 2007, the Tribunal’s Notice of Expiry Review of Finding was sent to the Canadian producer, importers, exporters and interested parties of the subject goods.  Parties were advised to contact the CBSA directly to obtain a copy of the Expiry Review Questionnaire (ERQ).
    
    
33. The ERQ requested information needed to consider the factors, as per subsection 37.2(1) of SIMR, relevant to this expiry review investigation.  Any persons or governments having an interest in this investigation were also invited to provide a submission regarding the effect the expiry of the Tribunal’s injury finding would have on the continuation or resumption of dumping of the subject goods.
    
    
34. The Canadian producer, Charles Tennant, provided a full response to the Canadian Producer ERQ,⁷ in addition to a case brief, emphasizing that the dumping is likely to continue or resume should the Tribunal’s finding expire.
    
    
35. One Canadian importer, Aslchem, provided a full response to the Importer ERQ,⁸ however, it did not provide a case brief or reply submission regarding the likelihood of continued or resumed dumping should the anti-dumping measure be rescinded.
    
    
36. During the POR, almost all of the importations made by Aslchem were subject goods that were subsequently re-exported out of the country.⁹
    
    
37. No exporters provided a response to the Exporter ERQ¹⁰ and no other person or government provided a submission in respect to this expiry review investigation.
    
    

INFORMATION USED BY THE PRESIDENT

Administrative Record

38. The information used and considered by the President for purposes of this expiry review proceeding is contained on the administrative record.  The administrative record includes the exhibits listed on the CBSA’s Exhibit Listing.  This is comprised of the Tribunal’s administrative record at initiation of the expiry review, CBSA exhibits and information submitted by interested persons, including information which they feel is relevant to the decision as to whether dumping is likely to continue or resume, absent the finding.
    
    
39. For purposes of an expiry review investigation, the CBSA sets a date after which no “new” information may be placed on the administrative record.  This is referred to as the “closing of the record date”.  This allows participants time to prepare their case briefs and reply submissions based on the information that is on the administrative record as of the closing of the record date.   For this expiry review, the administrative record closed on August 9, 2007.

Produral Issues

40. There were no procedural issues during the course of this expiry review investigation.
    
    

POSITION OF THE PARTIES

Parties Contending that Continued or Resumed Dumping is Likely

Canadian Producer

41. Charles Tennant made five key points in its case brief in support of the position that if the current finding is permitted to expire, continued or resumed dumping is likely to occur.  These are summarized as follows and will be dealt with individually:
    
    
    • failure of Chinese producers and exporters to respond to the CBSA questionnaires;
    • possible subsidization of Chinese xanthate industry;
    • state control of Chinese xanthate industry;
    • excess xanthate production capacity in China; and 
    • dumping of similar products produced in China.

Failure of Chinese Producers and Exporters to Respond to the CBSA Questionnaires¹¹

42. Charles Tennant stated that Chinese exporters had not submitted questionnaire responses for the 2006 reinvestigation or the 2007 expiry review investigation.
    
    
43. Charles Tennant concluded that the Chinese exporters' unwillingness to co-operate is based on the fear that a full response would have revealed their interest in re-entering the Canadian market following the expiry of the finding, at dumped and heavily subsidized price levels.
    

Possible Subsidization of Chinese Xanthate Industry¹²

44. In its case brief, Charles Tennant highlighted information it provided to the CBSA during the course of the reinvestigation concerning what it believes are a wide range of subsidies available to Chinese chemical producers.
    
    
45. It indicated that the United States of America (US) is currently monitoring subsidy practices with its trading partners, particularly in China.  It further noted that the US has just recently requested World Trade Organization (WTO) dispute settlement consultations with China regarding its provision of subsidies that appear to be prohibited by WTO rules.
    
    
46. It also brought attention to the CBSA’s recent final determination concerning certain copper pipe fittings from China at which time Chinese state subsidies were recognized.
    
    
47. More specifically, Charles Tennant is of the opinion that Chinese xanthate producers are the recipients of prohibited subsidies that promote export-led trade policies and cause problems for producers in other markets including Canada.  It believes that these subsidy margins are at least as significant as the margins of dumping.¹³
    
    

State Control of Chinese Xanthate Industry¹⁴

48. In its brief, Charles Tennant noted that a substantial portion of the Chinese xanthate industry and its input suppliers are state owned and controlled.  As such, it believes normal competitive conditions are not present.
    
    
49. Charles Tennant suggested that the production and prices within a state controlled company are determined by company managers, based primarily on political and social goals, and only secondarily on improving profit margins for owners and shareholders.  It noted that the very existence of a state owned firm results in uncompetitive conditions within that industry because all other firms lower their prices to meet those offered by the state owned firm.  Moreover, when inputs are provided to that firm from another state controlled company, they further artificially reduce the total cost of production of the goods.
    

Excess Xanthate Production Capacity in China¹⁵

50. Charles Tennant estimated the current global demand for xanthates at approximately 100,000 metric tonnes per year.  It further estimated the current production capacity for xanthates in China at between 115,000 and 145,000 metric tonnes per year.
    
    
51. Charles Tennant claims that xanthate production in other countries, such as Mexico, India, South Africa, Australia and Canada, simply adds to the global oversupply situation that currently prevails.
    
    
52. Charles Tennant believes that the Chinese overcapacity has worsened in the last four years and that it is tied directly to the subsidies and export-led trade policies that are promoted by the Chinese government.
    
    
53. Charles Tennant concluded that, should the finding be allowed to expire, this overcapacity will provide an incentive for Chinese producers to resume dumping their surplus into Canada through the already well established channels of distribution.  It will also provide motivation for them to lower prices even further in an attempt to sell more of the surplus.
    
    

Dumping of Similar Products Produced in China¹⁶

54. Charles Tennant stated that because xanthates are fairly specialized products that are consumed in many mining countries but produced in only a few, it is not surprised that anti-dumping measures are not in place against the subject goods in countries other than Canada.  Most countries are simply consumers of the product.
    
    
55. Information was filed by Charles Tennant concerning anti-dumping measures in place against similar chemical products from China.¹⁷  Some of these products, such as sodium metabisulfite, zinc oxide and furfuryl alcohol, are produced and marketed under similar conditions as xanthates and used in the mining industry.  Furfuryl alcohol is a chemical produced by Chinese xanthate producers.¹⁸
    
    

Joint Venture Entered into by Tennant Consolidated Ltd. in China¹⁹

56. Charles Tennant concluded its case brief by providing details of a joint venture that its parent, Tennants Consolidated Ltd., recently entered into with a Chinese chemical producer.  The purpose of this facility in China is to produce and market higher-value products derived from xanthates, such as thionocarbamate and xanthogen formate.
    
    

Parties Contending that Continued or Resumed Dumping is Not Likely

Canadian Importer

57. As previously noted, only one Canadian importer, Aslchem, provided a response to the ERQ.  Although the response supported the contention that continued or resumed dumping is not likely should the finding be allowed to expire, it did not provide a case brief or reply submission elaborating on the issue.
    
    
58. Aslchem is a broad based supplier of chemicals for the mining, industrial and process industries.²⁰  As noted earlier, during the POR, almost all of the importations of subject goods made by Aslchem were subsequently re-exported.
    
    
59. In its response to the ERQ, Aslchem suggested that the product produced by Charles Tennant is of a lower quality than that which is sourced on the international market.²¹
    
    
60. On the global scene, Aslchem alleged that demand for xanthates currently outweighs supply due to the opening of many new mines around the world that consume xanthates.  It stated that the majority of the product is now sourced in China as it has established itself as the leader based on product quality.²²
    
    
61. Aslchem further alleged that Chinese xanthate plants are currently operating at full capacity and that its selling prices are increasing as costs of production also rise.²³
    
    
62. Aslchem is of the opinion that Charles Tennant is fully aware of the long term growth potential in the global mining industry and that its Canadian plant is no longer viable.  For this reason, it just recently entered into an agreement to build a new production facility in China.²⁴
    
    

CONSIDERATION AND ANALYSIS

63. On June 20, 2007, the Tribunal’s Notice of Expiry Review of Finding was sent to 38 exporters, which represented all potential Chinese xanthate exporters known to the CBSA.  Information concerning these exporters was obtained from customs documents for subject importations into Canada and from information taken from previous xanthate investigations.  These parties were advised to contact the CBSA to obtain a copy of the ERQ.  They were further advised that the information received as a result of this expiry review investigation would allow the CBSA to conclude whether the expiry of the finding would likely result in the continuation or resumption of dumping.  A complete response to the questionnaire was requested at the CBSA office in Ottawa, Canada, by July 27, 2007.
    
    
64. None of the 38 exporters provided a submission with regard to this expiry review investigation.

Likelihood of Continued or Resumed Dumping

65. In deciding whether the expiry of the finding is likely to result in the continuation or resumption of dumping, the President may consider any factor specifically identified in paragraphs (a) to (i) of subsection 37.2(1) of SIMR, as well as any other factors relevant in the circumstances in rendering a determination pursuant to paragraph 76.03(7)(a) of SIMA.
    
    
66. The CBSA received limited co-operation from interested parties with regard to this expiry review investigation.  Similarly, on the public domain, the CBSA found very little information concerning the global xanthate industry.  A possible explanation for this is that it is too small an industry to justify any specific product coverage in trade and business media publications.
    
    
67. Based on an examination of the factors found under subsection 37.2(1) of SIMR and on the information included on the administrative record, the following factors were analyzed during the course of this investigation:
    
    
    • whether there has been dumping of the goods while the finding was in effect;
    • performance of the exporters in respect of production, prices and exports;
    • likely future performance of the exporters in respect of production, prices and exports;
    • anti-dumping measures in place in other countries with regard to similar products produced in China;
    • changes in market conditions internationally, with regard to supply, demand and prices; and
    • possible subsidization and state control of the Chinese xanthate industry.
    
    
68. A discussion of these factors follows.
    
    

Whether there has been Dumping of the Goods while the Finding was in Effect

69. To analyze this point, one must review how the margin of dumping was determined throughout the life of the case.
    
    
70. On February 3, 2003, the final results of the initial investigation found that the subject goods had been dumped.  Only one exporter provided information that could be used in the investigation, however, specific values could not be determined as the CBSA was unable to assess the level of state ownership and/or control over the industry.  A margin of dumping was provided to this exporter in accordance with a ministerial specification under section 29 of SIMA, based on its weighted average margin of dumping, at 29.2 per cent when expressed as a percentage of the export price.²⁵
    
    
71. On March 4, 2003, The Tribunal issued a finding of material injury with respect to the said goods.  Accordingly, from that day forward, subject goods were monitored for anti-dumping purposes.  Subsequent importations from the one co-operative exporter were assessed at 29.2 per cent anti-dumping duty.  All other exporters were assessed at 49.5 per cent anti-dumping duty in accordance with a ministerial specification under section 29 of SIMA.
    
    
72. On November 6, 2006, the CBSA initiated a reinvestigation of the normal values and export prices respecting xanthates.²⁶  Periodic reinvestigations are necessary to ensure that these values reflect current market conditions.  However, this time no co-operation was extended from any of the exporters and the CBSA was unable to update case information.  Accordingly, on March 15, 2007, at the conclusion of the reinvestigation, all concerned parties were advised that the goods would be assessed at 49.5 per cent anti‑dumping duty in accordance with a ministerial specification under section 29 of SIMA.²⁷
    
    
73. As previously noted, very few subject goods remained in the country during the POR, indicating an inability for Chinese exporters to compete in Canada at non-dumped prices.
    
    
74. Although most of the Chinese goods were later re-exported, subject goods continued to be shipped to Canada throughout the POR and certain importers and exporters continued their relationships respecting the subject goods. This indicates a sustained interest in the Canadian market.  Should the finding be allowed to expire, it is likely that importations would resume entering the Canadian market almost immediately.
    
    
75. Recent shipments in the first quarter of 2007 are of particular interest as they show a renewed interest in doing business in the Canadian market.  These goods were entered for consumption in Canada despite the 49.5 per cent anti-dumping duty in place.
    
    

Performance of the Exporters in respect of Production, Prices and Exports

76. The performance of the Chinese exporters since the finding came into effect is another factor in the analysis of whether the dumping will continue or resume should the finding be allowed to expire.
    
    
77. As estimated by Charles Tennant, although the worldwide demand for xanthates is at approximately 100,000 metric tonnes per year, Chinese production capacity is at between 115,000 and 145,000 metric tonnes per year.  This evidence indicates that Chinese exporters have the capacity to more than supply the world market without input from any other country.
    
    
78. Although Aslchem did not confirm excess Chinese production capacity, it did confirm that the majority of the product is now sourced in China and that there is a potential for growth within the xanthate industry as new mines open around the world.
    
    
79. According to Charles Tennant, during the POR, the xanthate industry enjoyed better pricing internationally as a direct result of the recent commodities boom and its effect on xanthates-using industries.²⁸
    
    
80. It believes, however, that this trend is only temporary and that, within approximately the next year, there will likely be a slowing in demand and a downward trend in prices as the commodities market cools.²⁹  Overall, evidence submitted suggests that global xanthate prices will likely remain low.
    
    
81. Information provided by Charles Tennant indicated that most of the subject goods that were imported into Canada during the POR were sold to the Red Dog Mine in Alaska.³⁰
    
    
82. Charles Tennant also noted that low priced Chinese exports have prevented it from making sales to the Red Dog Mine.³¹
    
    
83. In support of these low price levels, Charles Tennant provided a comparison of recent Chinese versus Canadian quotations to a number of other markets around the world.  In every instance, Charles Tennant’s prices were higher and it would have had to cut prices to unprofitable levels to secure the sales.³²
    
    
84. Contrary to price, it was suggested that quality is the deciding factor in the purchase of xanthates.  In the Statement of Reasons issued after the finding of March 4, 2003, however, the Tribunal noted that: 
    
    
    “Although xanthates are not a pure commodity, they are still very price sensitive.  Purchasers of xanthates responding to a Tribunal questionnaire, indicated that quality and, closely behind, price were the two most important factors affecting choice of suppliers.  This price sensitivity means that suppliers must react to price offers in the market and that relatively small volumes of xanthates can affect market price stability.”³³
    
    
85. In raising the quality issue, Aslchem alleged that the product produced by Charles Tennant is of a lower quality than that sourced internationally.  Charles Tennant addressed this issue in its response to the ERQ.  It noted that although in past years its plant was certified to specific ISO qualifications for quality and environmental standards, it just recently gave up this certification as a result of downsizing after confirming with its major customers that the ISO standards were not valued.  Although it no longer seeks third party verification, it noted that the ISO standards remain an integral part of the company’s Best Management Practices.³⁴
    
    

Likely Future Performance of the Exporters in respect of Production, Prices and Exports

86. Evidence was submitted indicating that Chinese exporters are global leaders in xanthate production, that their production capacity outweighs global demand, that their production levels continue to increase, that they have maintained a relationship with certain importers in Canada throughout the POR and that they compete on the world market at low price levels.  Should the finding be allowed to expire, these factors provide the Chinese exporters the ability to immediately re-enter the Canadian market at low price levels.  In fact, they suggest that it is likely.
    
    

Anti-dumping Measures in Place in Other Countries with Regard to Similar Products Produced in China

87. Another factor in assessing the likelihood of continued or resumed dumping of Chinese exports of xanthates is the existence of anti-dumping actions against Chinese exports in jurisdictions other than Canada.  While there are no actions specifically against Chinese xanthate exports, there are numerous trade actions against Chinese chemical products that are produced and marketed under similar conditions.
    
    
88. Charles Tennant provided a list of these actions derived from the Tribunal’s Trade Actions Database.³⁵  Specifically, these relate to numerous anti-dumping actions by countries against Chinese chemical exports from 2001 to present.  While not specific to xanthates, this information does indicate a propensity to dump by Chinese chemical exporters.
    
    

Changes in Market Conditions Internationally, with regard to Supply, Demand and Prices

89. Changes in international market conditions since the finding was initially put in place also provides guidance in assessing whether the expiry of the finding would result in continued or resumed dumping.
    
    
90. The limited information on the record suggests that, with the exception of China increasing its xanthate production, very little has changed over the past five years with regard to supply and demand.
    
    
91. The one change in the market, that will likely affect the price levels of subject goods sold in the future, is that more conglomerates are purchasing mines around the world and as a result are able to exert increased leverage to lower profit margins from their suppliers.³⁶  This would likely result in future downward pressure on xanthate prices.
    
    

Possible Subsidization and State Control of the Chinese Xanthate Industry

92. Although Charles Tennant is of the opinion that there are a range of subsidies available to Chinese chemical producers,³⁷ little is known by the CBSA regarding the availability of subsidies to the Chinese xanthate industry.
    
    
93. There is also limited information about the issue of state control of the Chinese xanthate industry, due to the fact that the exporters refused to co-operate and there is very little information on the public domain on this topic.
    
    
94. As such, it is concluded that there is insufficient information on the record to determine the impact possible subsidization and state control could have on the likelihood of continued or resumed dumping.
    
    

CONCLUSION

95. In summary, Chinese xanthate exporters have maintained a presence in Canada while the finding was in place; have recently shown renewed interest in selling into the Canadian market; have a combined production capacity that exceeds world demand; continue to increase xanthate production; and compete at low prices throughout the world.
    
    
96. For the purpose of making a determination in this expiry review investigation, the CBSA conducted its analysis within the scope of the factors found under subsection 37.2(1) of SIMR.  Based on the foregoing consideration of pertinent factors and an analysis of the evidence on the record, on October 18, 2007, pursuant to paragraph 76.03(7)(a) of SIMA, the President of the CBSA determined that the expiry of the finding made by the Tribunal on March 4, 2003, in Inquiry No. NQ-2002-003, concerning xanthates originating in or exported from China would likely result in the continuation or resumption of dumping of the goods into Canada.
    
    

FUTURE ACTION

97. On June 20, 2007, the Tribunal commenced its inquiry to determine whether the expiry of the finding is likely to result in injury or retardation with respect to goods from China.  The Tribunal must make its decision by March 3, 2008.
    
    
98. If the Tribunal determines that the expiry of the finding with respect to the goods is likely to result in injury or retardation, the finding will be continued in respect of those goods, with or without amendment.  If this is the case, the CBSA will continue to levy anti-dumping duties on dumped importations of xanthates from China.
    
    
99. If the Tribunal determines that the expiry of the finding with respect to the goods is not likely to result in injury or retardation, the finding will be rescinded in respect of those goods.  Anti-dumping duties will no longer be levied on importations of xanthates from China beginning on the date the finding is rescinded.

INFORMATION

100. For further information, please contact the officer listed below:

Mail:
SIMA Registry and Disclosure Unit
Canada Border Services Agency
Anti-dumping and Countervailing Program
100 Metcalfe Street, 11^th Floor
Ottawa, Ontario K1A 0L8
Canada

Telephone:
Mary Donais 613-952-9025

Fax:
613-948-4844

E-mail:
simaregistry-depotlmsi@cbsa-asfc.gc.ca

Web Site:
www.cbsa-asfc.gc.ca/sima-lmsi/menu-eng.html

M.R. Jordan
Director General
Trade Programs Directorate

1. Exhibit 7:  Notice of Expiry Review of Finding
   
   
2. Exhibit 2:  Tribunal Findings and Statement of Reasons
   
   
3. Exhibit 21:  Charles Tennant’s Response to the ERQ and Exhibit 30:  Charles Tennant’s Case Brief
   
   
4. Exhibit 20:  Aslchem’s Response to the ERQ
   
   
5. Exhibit 4:  Customs Notice 07-001
   
   
6. Exhibit 6:  Notice of Expiry of Finding
   
   
7. Exhibit 10:  Expiry Review Questionnaire to Canadian Producer
   
   
8. Exhibit 9:  Expiry Review Questionnaire to Importers
   
   
9. Exhibit 20:  Page 3 of Aslchem’s ERQ Response
   
   
10. Exhibit 8:  Expiry Review Questionnaire to Exporters
    
    
11. Exhibit 30:  Page 3 of Charles Tennant’s Case Brief
    
    
12. Exhibit 30:  Page 5 of Charles Tennant’s Case Brief
    
    
13. Exhibit 21:  Page 14 of Charles Tennant’s ERQ Response
    
    
14. Exhibit 30:  Page 5 of Charles Tennant’s Case Brief
    
    
15. Exhibit 30:  Page 7 of Charles Tennant’s Case Brief
    
    
16. Exhibit 30:  Page 8 of Charles Tennant’s Case Brief
    
    
17. Exhibit 21:  Page 54 of Charles Tennant’s ERQ Response
    
    
18. Exhibit 21:  Page 14 of Charles Tennant’s ERQ Response
    
    
19. Exhibit 30:  Page 9 of Charles Tennant’s Case Brief
    
    
20. Exhibit 20:  Page 2 of Aslchem’s ERQ Response
    
    
21. Exhibit 20:  Page 2 of Aslchem’s ERQ Response
    
    
22. Exhibit 20:  Page 4 of Aslchem’s ERQ Response
    
    
23. Exhibit 20:  Page 4 of Aslchem’s ERQ Response
    
    
24. Exhibit 20:  Page 4 of Aslchem’s ERQ Response
    
    
25. Exhibit 1:  Page 11 of the Statement of Reasons at the Final Determination of Dumping
    
    
26. Exhibit 3:  Customs Notice 666, regarding the Initiation of the Reinvestigation
    
    
27. Exhibit 4:  Customs Notice 07-011, regarding the Conclusion of the Reinvestigation
    
    
28. Exhibit 21:  Page 9 of Charles Tennant’s ERQ Response
    
    
29. Exhibit 21:  Page 10 of Charles Tennant’s ERQ Response
    
    
30. Exhibit 21:  Page 10 of Charles Tennant’s ERQ Response
    
    
31. Exhibit 21:  Page 10 of Charles Tennant’s ERQ Response
    
    
32. Exhibit 21:  Page 13 of Charles Tennant’s ERQ Response
    
    
33. Exhibit 2:  Page 12 of the Tribunal’s Statement of Reasons
    
    
34. Exhibit 21:  Page 5 of Charles Tennant’s ERQ Response
    
    
35. Exhibit 21:  Page 54 of Charles Tennant’s ERQ Response
    
    
36. Exhibit 21:  Page 9 of Charles Tennant’s ERQ Response
    
    
37. Exhibit 21:  Page 5 of Charles Tennant’s Case Brief