The anti-dumping investigation opened by the European Commission (hereinafter “the Commission”) in November 2024 on fused alumina imports from China highlighted a classic industrial dilemma: the need to restore a level playing field for the complainant industry and the need to preserve the competitiveness of downstream industries heavily reliant on fused alumina imports. The latter is an essential raw material for the abrasives and refractories sectors, themselves crucial to strategic value chains such as steel, automotive, aerospace, construction, and defence.
The adoption of provisional measures immediately revealed the extent of the risks to users, which led the Commission to prioritise in the adoption of definitive measures(1) a more nuanced approach than the classic imposition of anti-dumping duties: the establishment of duty-free tariff quotas.
1. Serious consequences for downstream users
As a reminder, Article 21 of the basic Regulation(2) provides that, in order to determine whether it is in the Union’s interest for measures to be taken, it is necessary to assess “all the interests at stake taken as a whole, including those of domestic industry and users and consumers“. As part of this review, particular attention is paid to the need to eliminate the trade-distorting effects of harmful dumping and to restore effective competition. Conversely, measures may not be applied where the Commission, having considered all the information provided, can clearly conclude that it is not in the Union’s interest to apply such measures.”
In this case, the consequences for users, who participated massively in the investigation, were extensively documented during the investigation.
Indeed, as soon as the provisional measures were implemented, many companies reported an immediate increase in their supply costs, which they were unable to pass on to their customers. The abrasives and refractories markets are characterised by intense competition, low margins, and often rigid contracts. In a context of particularly high definitive duties (ranging from 88.7% to 110.6%), any increase in the cost of raw materials directly translates into a reduction in profitability. Several users warned that the imposition of anti-dumping duties risked jeopardising their operational viability, threatening not only their margins but also their ability to maintain their activities within the Union.
This vulnerability is exacerbated by users’ structural dependence on Chinese imports. Approximately 50% of the fused alumina used in abrasives and nearly 65% of that used in refractories comes from China. This dependence is not merely quantitative: some users believe that Chinese products possess technical characteristics that are difficult to find elsewhere, particularly for certain particle sizes or refractory qualities. The Commission, however, has challenged the notion of a lack of alternatives, emphasising that European industry has underutilised capacity and that imports from third countries can constitute a viable source of supply. Nevertheless, the transition to these alternatives will take time, particularly to obtain the necessary technical certifications and adapt industrial processes.
The socio-economic risks identified by the Commission are also considerable. The abrasives and refractories industries together represent nearly 39,000 direct jobs in the Union, of which more than 22,600 have been identified as being immediately threatened by a sharp increase in supply costs. Several companies are already operating at a loss, and their financial fragility poses a direct threat to the sustainability of industrial activity in strategic sectors. Potential consequences include factory closures, relocations outside the EU, workforce reductions, and a loss of competitiveness compared to international competitors not subject to the same constraints. The Commission has acknowledged that a conventional imposition of anti-dumping duties risks accelerating a process of deindustrialisation in downstream sectors.
2. The tariff quota: a mechanism designed to stabilise the market as a whole
First and foremost, it is worth noting that Saint-Gobain submitted a proposal to extend anti-dumping duties to the product in question when incorporated into downstream products. Such a proposal would have ensured fair competition in downstream markets, as it would have prevented producers in third countries using Chinese fused alumina sold at unfair prices from gaining a competitive advantage over EU producers operating in those markets.
In accordance with its established decisional practice, the Commission rejected such an approach, recalling that the anti-dumping investigation into fused alumina imports had been opened with a limited scope, covering only the product in question. Consequently, the findings relating to dumping and injury could not legally be applied to downstream products without a separate investigation.
Faced with these challenges, the Commission deemed it necessary to adopt a more balanced measure: a duty-free tariff quota. This mechanism allows the import of a specified volume of fused alumina without paying anti-dumping duties, while excess volumes remain subject to duties. Its initial volume, set at 60,000 tonnes for 2026, corresponds to approximately 37% of Chinese imports observed during the investigation period. This level was considered sufficient to mitigate the immediate impact on users, while allowing European industry to regain market share and increase its capacity utilisation rate.(3) The quota will gradually decrease until it reaches 30,000 tonnes in 2030, giving users several years to diversify their sources of supply and reduce their dependence on China. The Commission considered that this approach made it possible to restore fair competitive conditions without causing excessive disruption in downstream sectors.
The allocation structure was also designed to ensure equitable distribution and prevent monopolisation. It is divided by product type (brown and white fused alumina), particle size, and quarter. This organisation ensures consistent availability throughout the year and meets the specific needs of different user sectors.
For users, this mechanism represents a necessary transition period to adjust their supply chains, obtain the required certifications for new suppliers, adapt their industrial processes, and renegotiate their commercial contracts. It also reduces the immediate impact on their costs, allowing them to continue importing a significant portion of their usual volumes without anti-dumping duties.
Adopting a duty-free tariff quota thus constitutes a pragmatic and flexible response to a particularly complex situation.
As highlighted by Martin Lukas, Director for Trade Defence at DG TRADE of the Commission(4), this case of fused alumina marks a significant development in how economic security considerations are integrated into trade defence investigations. For the first time, these considerations have been applied so explicitly, in accordance with the new Communication on Economic Security(5), published last December.
Martin Lukas believes it is unlikely that this case will become a model to be applied to future anti-dumping proceedings, given its unique circumstances. However, it is likely—and even beneficial—that economic security considerations will play an increasingly important role in the conduct of investigations and, where appropriate, in the definition of measures. Indeed, practitioners have long been advocating for flexibility in the application and implementation of trade defence instruments to reflect the fact that many of the sectors involved now fall under the strategic interests of the Union.
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- Commission Implementing Regulation (EU) 2026/114 of 15 January 2026 imposing a definitive anti-dumping duty and providing for the definitive collection of the provisional duty imposed on imports of fused alumina originating in the People’s Republic of China.
- Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on defence against dumped imports from non-EU countries.
- Projections show that sales by European producers could almost double by 2031, while their capacity utilisation rate would increase from 43% to over 70%. This improvement guarantees the sustainability of strategic production for the Union, particularly for the steel, defence, aerospace, and construction sectors.