Commission Implementing Regulation (EU) 2016/181 of 10 February 2016 imposing a provisional anti-dumping duty on imports of certain cold-rolled flat steel products originating in the People's Republic of China and the Russian Federation

THE EUROPEAN COMMISSION,

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

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (1), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 14 May 2015, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of certain flat-rolled products of iron or non-alloy steel, or other alloy steel but excluding of stainless steel, of all widths, cold-rolled (cold-reduced), not clad, plated or coated and not further worked than cold-rolled (cold-reduced) (‘cold-rolled flat steel products’) originating in the People's Republic of China (‘PRC’) and the Russia Federation (‘Russia’) (together, referred to as ‘the countries concerned’) on the basis of Article 5 of Regulation (EC) No 1225/2009 (‘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 1 April 2015 by the European Steel Association (‘Eurofer’ or ‘the complainant’) on behalf of producers representing more than 25 % of the total Union production of certain cold-rolled flat steel products. The complaint contained evidence of dumping of the said product and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) Following a request by the complainant supported by the required evidence, the Commission published on 12 December 2015 Implementing Regulation (EU) 2015/2325 (3) making imports of certain cold-rolled flat steel products originating in the PRC and Russia (‘the Registration Regulation’) subject to registration as of 13 December 2015.

(4) Some interested parties claimed that the request for registration of imports was unfounded, as the conditions pursuant to Article 14(5) of the basic Regulation were not met. They alleged that the conditions for the retroactive collection of duties are not fulfilled as the request would be based on arbitrarily selected time periods, would neglect the cyclical nature of imports and, as to the registration of imports, as well as the retroactive application of measures, would be against the Union interest. However, at the time when the decision was taken the Commission had sufficient prima facie evidence justifying the need to register imports: imports and market shares from the countries concerned had sharply increased. The claim in this regard was therefore rejected.

(5) In the Notice of Initiation, the Commission invited interested parties to come forward in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers, the Chinese and Russian authorities, known importers, suppliers and users, traders and associations known to be concerned about the initiation and invited them to participate.

(6) Interested parties were given the opportunity to make their views known in writing and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. All interested parties who so requested and showed that there were particular reasons why they should be heard were granted a hearing.

(7) The Commission also informed producers in Brazil, Canada, India, Japan, South Korea, Taiwan, Turkey, Ukraine and the USA about the initiation and invited them to participate. In the Notice of Initiation, the Commission informed interested parties that it provisionally chose Canada as a third market economy country (‘analogue country’) within the meaning of Article 2(7)(a) of the basic Regulation.

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

(9) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission had selected the sample on the basis of the highest representative production and sales volumes whilst ensuring a geographical spread. This provisional sample consisted of five Union producers located in five different Member States and accounted for over 35 % of Union production of cold-rolled flat steel products. The Commission invited interested parties to comment on the provisional sample.

(10) Eurofer submitted comments and for various reasons suggested a change in the proposed sample. However, after analysing these comments the Commission concluded that changing the sample as proposed by Eurofer would not improve its overall representativity. The Commission therefore confirmed the sample and received no further comments in this regard.

(11) The Commission asked unrelated importers to provide the information specified in the Notice of Initiation in order to decide whether sampling was necessary and, if so, to select a sample.

(12) Thirteen importers provided the requested information and agreed to be included in the sample. Four of them were sampled, but only one of them submitted an importers questionnaire reply. In order to base its findings on a greater number of unrelated importers, the Commission contacted the remaining unrelated importers which had come forward in the sampling exercise but none of them confirmed their willingness to complete the importers questionnaire.

(13) To decide whether sampling is necessary and, if so, to select a sample for the PRC and Russia respectively, the Commission asked all exporting producers in the PRC and Russia 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 and the Permanent Mission of the Russian Federation to the European Union to identify and/or contact exporting producers that could be interested in participating in the investigation.

(14) Ten groups of exporting producers in the PRC and three in Russia provided the requested information and agreed to be included in the samples for the PRC and Russia respectively. With regard to the PRC and in accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two groups of companies 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 PRC, were consulted on the selection of the sample. Having examined the comments received from one exporting producer, the Commission confirmed its proposed sample.

(15) In view of the limited number of exporting producers in Russia the Commission decided not to select a sample for Russia but to investigate all the three groups of companies concerned. The companies in question and the authorities of Russia were informed accordingly.

(16) Six groups of exporting producers in the PRC indicated that they wish to request individual examination under Article 17(3) of the basic Regulation. However, none of them replied to the questionnaire and, thus, no individual examination could be considered.

(17) The Commission sent questionnaires to all parties known to be concerned and to all other companies that made themselves known within the deadlines set out in the Notice of Initiation. Questionnaire replies were received from five Union producers, three users, a group of related steel service centres, one steel service centre not related to an exporting producer in the countries concerned, three exporting producers in Russia, two groups of exporting producers in the PRC, and one producer in an analogue country.

(19) The investigation of dumping and injury covered the period from 1 April 2014 to 31 March 2015 (‘the investigation period’ or ‘IP’).

(20) The examination of trends relevant for the assessment of injury covered the period from 1 January 2011 to the end of the investigation period (‘the period considered’).

(22) Cold-rolled flat steel products are produced from hot-rolled coils. The cold-rolling process is defined by passing a sheet or strip — that has previously been hot rolled and pickled — through cold rolls, i.e. below the softening temperature of the metal. Cold-rolled flat steel products are manufactured to meet certain specifications or proprietary end-user specifications. They can be delivered in various forms: in coils (oiled or not oiled), in cut lengths (sheet) or narrow strips. Cold-rolled flat steel products are an industrial input purchased by end-users for a variety of applications, mainly in manufacturing (general industry, packaging, automotive, etc.) but also in construction.

(24) The Commission therefore provisionally decided that these products are like products within the meaning of Article 1(4) of the basic Regulation.

(25) Pursuant to Article 2(7)(b) of the basic Regulation the Commission determines normal value in accordance with Article 2(1) to (6) of that Regulation for the exporting producers in the PRC which comply with the criteria in Article 2(7)(c) of the basic Regulation and could therefore be granted MET.

(26) For the determination of whether the criteria in Article 2(7)(c) of the basic Regulation are met, the Commission sought the necessary information by asking the exporting producers to fill in the MET claim form. None of them claimed MET.

(27) According to Article 2(7)(a) of the basic Regulation normal value was determined on the basis of the price or constructed value in a market economy third country for the exporting producers not granted MET. For this purpose, an analogue country had to be selected.

(28) In the Notice of Initiation, the Commission indicated that it provisionally chose Canada as an appropriate analogue country and invited interesting parties to comment. One exporting producer and the China Iron and Steel Association (‘CISA’) opposed the choice of Canada and claimed that Russia would constitute an appropriate choice.

(30) Subsequently, the Commission therefore examined whether any other market economy third country in which the like product is produced, could constitute an appropriate analogue country. In addition to India, South Korea and Ukraine, which were mentioned in the Notice of Initiation, the Commission contacted producers in Brazil, Japan, Taiwan, Turkey, and the USA. On the basis of the information received and of its own research, the Commission asked 35 known and potential producers of the like product in these countries to provide information. None of them replied to the analogue country producers' questionnaire. In addition, the Commission contacted three producers in Canada. Only one replied to the analogue country producers' questionnaire.

(34) The Commission thus concluded at this stage that Canada is an appropriate analogue country under Article 2(7)(a) of the basic Regulation.

(35) The information received from the cooperating producer in the analogue country was used as a basis for the determination of the normal value for the exporting producers not granted MET, pursuant to Article 2(7)(a) of the basic Regulation.

(36) The Commission first examined whether the total volume of domestic sales of the cooperating producer in the analogue country was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market represented at least 5 % of total export sales volume of the product concerned to the Union of each sampled Chinese exporting producer group during the investigation period. On this basis, the total sales of the cooperating producer of the like product on the domestic market of the analogue country were representative.

(37) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union for the sampled groups of exporting producers.

(38) The Commission then examined whether the domestic sales by the analogue country producer on its domestic market for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union. The Commission established for both Chinese groups of exporting producers that domestic sales were representative for the majority of product types.

(39) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.

(41) In this case, the normal value is the weighted average of the prices of all domestic sales of that product type during the investigation period.

(43) The Commission's analysis of domestic sales showed that for most exported product types more than 80 % of all domestic sales were profitable and that the weighted average sales price was higher than the cost of production. Accordingly, for these product types the normal value was calculated as a weighted average of the prices of all domestic sales during the investigation period.

(44) When a product type was not sold in representative quantities on the domestic market by the analogue country producer, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

(45) For the product type not sold in representative quantities on the domestic market, normal value was constructed by adding the average selling, general and administrative (‘SG&A’) expenses and profit of transactions made in the ordinary course of trade on the domestic market for those types to the average cost of production of the like product of the cooperating analogue country producer during the investigation period.

(46) One sampled group of exporting producers exported to the Union both directly to independent customers and through related importers.

(47) If the groups of exporting producers export the product concerned directly to independent customers in the Union, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(48) If the group of exporting producers export the product concerned to the Union through related companies acting as an importer, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union, in accordance with Article 2(9) of the basic Regulation. In this case, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses, and for profits accruing.

(49) The Commission compared the normal value and the export price of the sampled groups of exporting producers on an ex-works basis.

(50) Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport related costs, handling, loading and ancillary charges, indirect taxes, commissions, credit costs and bank charges.

(51) For the sampled cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

(53) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled groups of exporting producers.

(54) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 56,9 %.

(55) For all other exporting producers in the PRC, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total export volume — as reported in Eurostat import statistics — from the country concerned to the Union.

(56) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted around 87 % of the total exports to the Union during the investigation period. On this basis, the Commission decided to base the residual dumping margin at the level of the sampled company with the highest dumping margin.

(58) The Commission investigated three Russian exporting producers representing almost all exports from Russia to the Union during the investigation period. As set out below, a number of issues emerged which led the Commission to provisionally consider the application of Article 18 of the basic Regulation for two of them.

(59) For one exporting producer the Commission adjusted the costs of production reported in the reply to the questionnaire as set out in recital 76.