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

12.2.2016	EN	Official Journal of the European Union	L 37/1

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. PROCEDURE

1.1.   INITIATION

• (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.

1.2.   REGISTRATION

• (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.

1.3.   INTERESTED PARTIES

• (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.

1.4.   ANALOGUE COUNTRY PRODUCERS

• (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.

1.5.   SAMPLING

• (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.

1.5.1.   Sampling of Union producers

• (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.

1.5.2.   Sampling of importers

• (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.

1.5.3.   Sampling of exporting producers in the PRC and Russia

• (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.

1.6.   INDIVIDUAL EXAMINATION

• (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.

1.7.   REPLIES TO THE QUESTIONNAIRE

• (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.

1.8.   VERIFICATION VISITS

• (18) The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, resulting injury and Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies/association:

• — Association:

• — Eurofer, Brussels, Belgium.

• — Union producers:

• — ThyssenKrupp Germany, Duisburg, Germany

• — Tata Steel UK Limited, Port Talbot, United Kingdom

• — ArcelorMittal Belgium NV, Ghent, Belgium

• — ArcelorMittal Sagunto S.L., Puerto de Sagunto, Spain

• — U. S. Steel Košice, s.r.o., Košice, Slovak Republic.

• — Unrelated importers in the Union:

• — S. Polo Lamiere, San Polo di Torrile (PR), Italy.

• — Users and/or steel service centres in the Union:

• — Valpro Ltd, Valmiera, Latvia

• — Dinex Latvia Ltd, Ozolnieku Novad, Latvia

• — Gonvarri I. Centro De Servicios, S.L., Madrid, Spain

• — Industrial Ferrodistribuidora, S.L., Puerto de Sagunto, Spain

• — Steel & Alloy processing limited, West Bromwich, United Kingdom.

• — Exporting producers in the PRC:

• — Angang Group:

• — Angang Steel Company Limited, Anshan

• — Tianjin Angang Tiantie Cold Rolled Sheets Co. Ltd, Tianjin.

• — Shougang Group:

• — Beijing Shougang Cold Rolling Co. Ltd, Beijing

• — Shougang Jintang United Iron & Steel Co. Ltd, Tagshan.

• — Related importer in the Union:

• — Ansteel Spain S.L., Alcobendas, Spain.

• — Exporting producers in Russia:

• — Magnitogorsk Iron & Steel Works OJSC, Magnitogorsk

• — OJSC Novolipetsk Steel, Lipetsk

• — PAO Severstal, Cherepovets.

• — Related steel service centre/trader/importer in the Union:

• — SIA Severstal Distribution, Riga, Latvia

• — Related traders/importers outside the Union:

• — NOVEX Trading (Swiss) SA, Lugano, Switzerland

• — MMK Steel Trade AG, Lugano, Switzerland

• — Severstal Export GmbH, Stansstad, Switzerland.

• — Producer in the analogue country:

• — ArcelorMittal Dofasco, Hamilton, Canada.

1.9.   INVESTIGATION PERIOD AND PERIOD CONSIDERED

• (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’).

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   PRODUCT CONCERNED

• (21) The product concerned is 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), currently falling within CN codes ex 7209 15 00, 7209 16 90, 7209 17 90, 7209 18 91, ex 7209 18 99, ex 7209 25 00, 7209 26 90, 7209 27 90, 7209 28 90, 7211 23 30, ex 7211 23 80, ex 7211 29 00, 7225 50 80, 7226 92 00 and originating in the PRC and Russia.

The following product types are excluded from the definition of the product concerned:

• — flat-rolled products of iron or non-alloy steel, of all width, cold-rolled (cold-reduced), not clad, plated or coated, not further worked than cold-rolled, whether or not in coils, of all thickness, electrical,

• — flat-rolled products of iron or non-alloy steel, of all width, cold-rolled (cold-reduced), not clad, plated or coated, in coils, of a thickness of less than 0,35 mm, annealed (known as ‘black plates’),

• — flat-rolled products of other alloy steel, of all width, of silicon-electrical steel, and

• — flat-rolled products of alloy steel, not further worked than cold-rolled (cold-reduced), of high-speed steel.

• (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.

2.2.   LIKE PRODUCT

• (23) The investigation showed that the following products have the same basic physical characteristics as well as the same basic uses:

• (a) the product concerned;

• (b) the product produced and sold on the domestic market of Russia, the PRC and Canada;

• (c) the product produced and sold in the Union by the Union industry.

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

3. DUMPING

3.1.   THE PRC

3.1.1.   Normal value

3.1.1.1.   Market economy treatment (‘MET’)

• (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.

3.1.1.2.   Analogue country

• (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.

• (29) The situation of Russia was examined in accordance with Article 2(7)(a) of the basic Regulation which provides that ‘where appropriate, a market economy third country which is subject to the same investigation shall be used’. However, the Commission considers that Russia is not an appropriate analogue country for two reasons:

• — Due to the imposition of international sanctions, prolonged geopolitical tensions in Ukraine and falling oil prices, the Russian economy was in an exceptional situation during the investigation period. Its gross domestic product had contracted for three quarters in a row and the Russian rouble had significantly lost value against major currencies, in particular 40 % against the Chinese currency, reaching its lowest level in 10 years. The Commission considers that the normal value which can be determined in such a rapidly deteriorating economy is only relevant for domestic producers and cannot serve as a reasonable analogue for the normal value in the PRC. Indeed, in a rapidly deteriorating economic situation prevailing in Russia during the IP, the prices for the like product could not and were not formed in circumstances which are as similar as possible to those in the PRC.

• — The Russian market is relatively closed and there is hence no genuine competition on this market. The market share of imports is not insignificant (10 % during the investigation period) but these imports originate almost exclusively from the Commonwealth of Independent States Free Trade Area. There are import duties in place (5 %) and the deteriorating value of the rouble during the investigation period further limits the ability of international suppliers to compete on the Russian market.

• (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.

• (31) On the basis of the information collected and verified, Canada appears to be an appropriate analogue country for the following reasons:

• — The product sold in the PRC and the product produced in Canada are identical in their physical characteristics, production process and applications. The Canadian market is sufficiently large. The cooperating producer is a large player with representative domestic sales.

• — The Canadian market is an open and competitive market. There are three Canadian producers of the like product. If the Canadian cooperating producer is by far the largest, it competes with a large amount of imports (59 % of market share during the investigation period) which enter Canada without duty. Most of these imports originate from three producers located in the USA. However, Canada also attracts a diversified base of other international suppliers which together account for a market share of approximately 15 % and includes the PRC, Japan, Russia, Turkey and South-Korea.

• (32) One exporting producer and the China Iron and Steel Association (‘CISA’) claimed that Canada was not an appropriate choice in so far as:

• — The only Canadian producer that submitted an analogue country questionnaire in Canada is a company related to one of the complainants.

• — The level of economic development of Canada is substantially different than that of the PRC.

• — The Canadian market is dominated by a single domestic producer; even if Canada has a large proportion of imports, they do not exert a competitive pressure because they mostly originate from the USA.

• — Contrary to the Chinese market where production exceeds the apparent consumption, the domestic production in Canada cannot meet the demand for cold-rolled steel on the Canadian market even with the highest capacity utilisation.

• (33) With regards to these claims, the Commission notes that:

• — The existence of a relationship between the analogue country producer and an EU producer does not invalidate or affect the determination of the normal value which is based on duly verified data. In addition, the party has failed to produce any evidence capable of proving that those data are incorrect, or even to explain how the link in question could have affected their reliability.

• — The different level of overall economic development is, in itself, not a relevant factor when selecting an analogue country. As recently confirmed by the Court of Justice, high competitiveness, which is present in Canada, and technological development can offset the fact that a country has a higher level of costs.

• — It cannot be sustained that the cooperating producer holds a dominant position since the Canadian market is open to a large amount of imports. Regardless of their origins, these imports compete with the products sold by Canadian producers. In addition, the origin of these imports is not limited to the USA and includes a significant proportion of imports from other countries.

• — The choice of an analogue country cannot seek to replicate economic imbalances, such as over-capacity, which reflect a distortion in the allocation of assets in a non-market economy context. On the contrary, the fact that a large part of the Canadian consumption is not met by the domestic production but by imports shows that the decision to invest in production capacities is made on the basis of an open and competitive environment.

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

3.1.1.3.   Normal value (analogue country)

• (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.

• (40) The normal value is based on the actual domestic price per product type, irrespective of whether those sales are profitable or not, if:

• (1) the sales volume of the product type, sold at a net sales price equal to or above the calculated cost of production, represented more than 80 % of the total sales volume of this product type; and

• (2) the weighted average sales price of that product type is equal to or higher than the unit cost of production.

• (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.

• (42) The normal value is the actual domestic price per product type of only the profitable domestic sales of the product types during the investigation period, if:

• (1) the volume of profitable sales of the product type represents 80 % or less of the total sales volume of this type; or

• (2) the weighted average price of this product type is below the unit cost of production.

• (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.

3.1.2.   Export price

• (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.

3.1.3.   Comparison

• (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.

3.1.4.   Dumping margins

• (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.

• (52) On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Table 1

Dumping margins, the PRC

Company	Provisional dumping margin (%)
Angang Group	59,1
Shougang Group	52,7

• (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.

• (57) The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Table 2

Dumping margins, the PRC

Company	Provisional dumping margin (%)
Angang Group	59,1
Shougang Group	52,7
Other cooperating companies	56,9
All other companies	59,1

3.2.   RUSSIA

3.2.1.   Introduction

• (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.

• (60) For the other exporting producer, the on-the-spot verification revealed that this company did not report to the Commission the totality of its production volume and capacity of the product concerned. The Commission found also on-the-spot that the company did not submit full information on its product coding system used for the production and sales of the product concerned, thereby making it impossible for the Commission to link information on sales per product type with information on production per product type. The Commission found further that during the on-the-spot verification the company did not have readily available information per product type on the quantities sold or used captively in further production. This information would have allowed the Commission to verify on-the-spot the deduction of captive use from the total cost of production reported, which the company claimed should be made to arrive at the cost of production of the reported quantity of the product concerned sold. The company provided the information necessary for the reconciliation of production, sales and captive use, which was requested at the verification, only after the verification visit of the Commission. The Commission analysed this new information by performing a stock reconciliation between the quantities of the product concerned produced, as reported after the verification visit, and the quantity sold or transferred for processing to other products. This stock reconciliation demonstrated that the company reported an overall higher quantity sold than what production made physically possible, taking into account stock variations, rejects and waste as reported by the company.

• (61) The Commission considered that for the reasons mentioned in recital 60 the information provided by the exporting producer, both before and after the on-the-spot verification visit, did not enable it to ascertain the accuracy and reliability of the information on sales volumes and costs of the product concerned provided by that exporting producer. The Commission concluded that the exporting producer failed to cooperate by not providing the information which it requested in order to assess and verify the sales volume and the production cost of the product concerned. This prevented the Commission from reliably establishing the export price and the normal value. Furthermore, given that the lack of reliability affected the entire data set provided at various stages by the exporting producer, the Commission was not in a position to rely on specific sub-sets of data provided concerning the different components of the dumping margin. Therefore, the Commission had to determine the dumping margin of that exporting producer on the basis of facts available and had to disregard the information provided by the exporting producer, because it could not arrive at reasonably accurate findings and because the information was not verifiable.

• (62) The Commission informed the exporting producer concerned on 30 October 2015 that for the reasons set out under recitals 60 and 61, it considered that the company had not provided the necessary information concerning export prices and cost of production of the product concerned within the time limits set in the basic Regulation and that it intended to apply facts available in accordance with Article 18 of the basic Regulation for the establishment of possible dumping for the company in question.

• (63) The company commented on the intention of the Commission to use facts available on 13 November 2015 and stated that it cooperated with the investigation to the best of its abilities. The company submitted that it had provided all information that would allow the Commission to arrive at reasonably accurate findings but that it could not be asked to report information that would impose an unreasonable, excessive investigative burden on it. The company further requested an exceptional second verification visit before the imposition of any provisional duty.

• (64) The Commission examined the comments of the company and concluded that these comments did not put forward any new, yet verifiable elements that could alter its intention to use, at this stage of the investigation, facts available in the determination of possible dumping for the company concerned. The Commission also considers that it has not imposed any unreasonable burden on the company by insisting on a proper reconciliation of its production and sales data which is necessary for the verification of such data for the product concerned. Furthermore, the Commission considers that in light of the deficiencies already identified in the information reported by the company itself, a second on-the-spot verification visit would not be meaningful. Thus, in line with Article 18 of the basic Regulation the Commission provisionally established the dumping margin for this company on the basis of facts available.

3.2.2.   Normal value

• (65) The Commission first examined whether the total volume of domestic sales for each of the two exporting producers 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 per exporting producer represented at least 5 % of its total export sales volume of the product concerned to the Union during the investigation period. On this basis, the total sales by each exporting producer of the like product on the domestic market were representative.

• (66) 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 exporting producers with representative domestic sales.

• (67) The Commission then examined whether the domestic sales by each of the two exporting producers 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.

• (68) 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.

• (69) The normal value is based on the actual domestic price per product type, irrespective of whether those sales are profitable or not, if:

• (1) the sales volume of the product type, sold at a net sales price equal to or above the calculated cost of production, represented more than 80 % of the total sales volume of this product type; and

• (2) the weighted average sales price of that product type is equal to or higher than the unit cost of production.

• (70) 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.

• (71) The normal value is the actual domestic price per product type of only the profitable domestic sales of the product types during the investigation period, if:

• (1) the volume of profitable sales of the product type represents 80 % or less of the total sales volume of this type: or

• (2) the weighted average price of this product type is below the unit cost of production.

• (72) The analysis of domestic sales showed that for some product types, some domestic sales were profitable and that the weighted average sales price was higher than the cost of production. Accordingly, the normal value was calculated as a weighted average of prices of all domestic sales during the investigation period where conditions set under recital 69 above were met, or as a weighted average of the profitable sales only, where those conditions were not met. Where there were no or insufficient sales of certain product types of the like product or where no sales were found in the ordinary course of trade, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

• (73) Normal value was constructed by adding the following to the average cost of production of the like product of the two exporting producers during the investigation period:

• (1) the weighted average selling, general and administrative (‘SG&A’) expenses incurred by the cooperating exporting producers on domestic sales of the like product, in the ordinary course of trade, during the investigation period; and

• (2) the weighted average profit realised by the cooperating exporting producers on domestic sales of the like product, in the ordinary course of trade, during the investigation period.

• (74) For the product types not sold in representative quantities on the domestic market, the average SG&A expenses and profit of transactions made in the ordinary course of trade on the domestic market for those types were added. For the product types not sold at all on the domestic market, the weighted average SG&A expenses and profit of all transactions made in the ordinary course of trade on the domestic market were added.

• (75) All exporting producers acknowledged in their financial statements significant losses due to the foreign currency exchange differences arising on translation of transactions not denominated in Russian roubles. The Commission considered those as being part of the company's SG&A expenses and included those in the normal value calculation.

• (76) In the light of the findings of the on-the-spot verifications, the Commission adjusted the cost of production for one of the exporting producers. The Commission found that the exporting producer in question had not properly and accurately reflected the actual costs of materials and related purchase costs in its cost reported. The Commission was not able to reconcile the quantities, values and related costs of certain raw material purchased to the accounts of the company, as the company failed to report these costs in the purchase listings of the raw materials that it submitted to the Commission in its replies to the questionnaire and deficiency letter. The Commission found also that the company in question did not report the purchases of raw materials, as amended with its reply to the deficiency letter, in the format requested in the questionnaire, thereby making it impossible for the Commission to verify stock variations and material consumption during the investigation period. Furthermore, the Commission has evidence which it collected during the on-the-spot verification showing that the manufacturing costs in the accounts of the company differ from the manufacturing costs shown for the same accounts in the automated cost allocation module used for the allocation of costs to the different products.

• (77) The Commission informed the exporting producer concerned on 30 October 2015 that for the reasons set out under recital 76, it considered that the company had not provided the necessary information concerning the manufacturing cost of the product concerned within the time limits set in the basic Regulation and that it intended to make use of facts available in accordance with Article 18 of the basic Regulation for establishing the normal value.

• (78) The exporting producer commented on 13 November 2015 on the intention of the Commission to use the facts available and submitted additional explanations regarding differences between the expenses accounted in its general ledger accounts and costs identified in its cost calculation report. The company further admitted on 13 November 2015 the existence of discrepancies the Commission found during the on-the-spot verification visit and which pertain to purchase costs of raw materials, but it claimed that it could immediately identify the reasons for these discrepancies that it considered to be clerical mistakes.

• (79) The Commission examined the comments and explanations of the company and considered that the accuracy of the additional information submitted could no longer be verified and reconciled to the accounts of the company. The Commission further considered that the discrepancies that it found on-the-spot concerning purchase costs of raw materials were not clerical mistakes and noted that the company has not contested the Commission finding that the information on raw material purchase related costs, on stocks of raw material and on raw material consumption was missing from its replies to the questionnaire and deficiency letter. The Commission concluded that the comments and additional explanations of the company had not brought forward any new, yet verifiable elements that could alter its intention to use, at this stage of the investigation, facts available in the determination of the normal value.

• (80) The Commission found also during the on-the-spot verification that the material consumption ratios that it obtained from the company's controlling department during the verification differed significantly from the material consumption ratios that the company reported on 24 September 2015 in its reply to the deficiency letter of the Commission. The Commission requested information from the company on-the-spot on this anomaly. The company clarified that for the reporting of its material expenses it had not used the consumption ratios from its controlling department but rather calculated the consumption ratios by dividing the material expenses that it reported to the Commission by the cost of the goods sold. For this reason, the Commission considered that the material consumption ratios that the company reported did not enable the Commission to make an accurate assessment of its material expenses. Consequently, as set out above, the Commission decided to modify the cost of production reported by the company to bring it in line with the factual evidence on costs of raw material that it collected during the on-the-spot verification.

3.2.3.   Export price

• (81) The exporting producers exported to the Union either directly, via related companies acting as importers in the Union, or via related or unrelated traders/importers based in Switzerland. Those Swiss related companies, owned by the Russian exporting producers, purchased the product concerned from the exporting producers and further sold it to the Union and other countries.

• (82) When the exporting producer exported the product concerned directly to independent customers in the Union, the export price was established on the basis of prices 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.

• (83) When the exporting producers exported the product concerned to the Union through a related company acting as an importer, the export price was constructed 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. The export price was also, in accordance with the same Article, constructed when the product concerned was not resold in the condition in which it was imported. In such cases, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses, and for profits.

• (84) The verification of one exporting producer showed that 20 % of the export sales to the Union were made to an unrelated trader based in Switzerland. The exporting producer reported those sales as sales to an independent party in the Union, claiming it has no relationship with this trader. Customs export declarations were used to prove the goods destination. Despite the sales currency agreed in the contracts between the exporting producer and trader being euros or US dollars, the exporting producer reported those sales as done in Russian roubles with corresponding invoices in Russian roubles. The Commission will continue investigating this matter, in particular whether the sales were actually made to an independent buyer for consumption in the Union and reported in the appropriate currency. The Commission provisionally included those sales in the determination of the export price.

3.2.4.   Comparison

• (85) The Commission compared the normal value and the export price of the cooperating exporting producers on an ex-works basis.

• (86) 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.

• (87) As regards export prices, adjustments were made for transport related costs, handling, loading and ancillary charges, import charges, sales commissions, credit costs and bank charges. Concerning domestic prices, adjustments were made for domestic transportation costs, packing costs, credit costs, handling and commissions.

• (88) For price comparison involving foreign currencies, the Commission used, under Article (2)(10)(j) of the basic Regulation the exchange rate applicable at the date of purchase order or sales contract which more appropriately establishes the material terms of sale than the invoice date as the price negotiation resulting in establishing the price was made in the period close to the purchase order or sales contract date. The corresponding invoice was issued when the product has been shipped, which was generally one or two months later.

• (89) 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.

• (90) For the determination of the provisional dumping margin of the exporting producer referred to in recitals 60 to 64, the Commission used as a fact available, the level of the dumping margin of the most exported product type that was found to be just above the overall dumping margin of one of the others exporting producers. The Commission based the selection of the suitable exporting producer on the sounder comparableness of the sales volumes on the domestic market and Union exports, geographical proximity, structure of the essential raw material inputs and reported capacity utilisation. On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Table 3

Dumping margins, Russia

Company	Provisional dumping margin (%)
Magnitogorsk Iron & Steel Works OJSC	19,8
PAO Severstal	25,4
OJSC Novolipetsk Steel	26,2

• (91) For all other exporting producers in Russia, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation.

• (92) As set out in recital 58, the investigated companies represented almost all exports from Russia to the Union. On this basis, the Commission decided to base the dumping margin for all other companies at the level of the company with the highest dumping margin.

• (93) The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Table 4

Dumping margins, Russia

Company	Provisional dumping margin (%)
Magnitogorsk Iron & Steel Works OJSC	19,8
PAO Severstal	25,4
OJSC Novolipetsk Steel	26,2
All other companies	26,2

4. INJURY

4.1.   DEFINITION OF THE UNION INDUSTRY AND UNION PRODUCTION

• (94) Within the Union, 13 companies provided production and sales data in the standing exercise and indicated that they produced the like product during the investigation period. Based on the available information from the complaint, there are 15 other Union producers of the like product in the Union.

• (95) The total Union production during the investigation period was established at around 37 million tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as information from the complainant and from all known producers in the Union.

• (96) The Union producers accounting for the total Union production constitute the Union industry within the meaning of Article 4(1) of the basic Regulation and will be thereafter referred to as the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (97) The cooperating Union producers represent 89 % of the total Union production of the like product.

• (98) The business model of the Union producers and their degree of vertical integration varies. ‘Re-rollers’, which have to source their pre-material needs from other producers, represent a minor share.

4.2.   UNION CONSUMPTION

• (99) As mentioned in recital 21, cold-rolled flat steel products fall within a number of CN codes including certain ex codes. In order not to underestimate Union consumption, and in view of the apparent marginal impact of such codes on total consumption, import volumes of CN ex codes have been fully accounted for the purpose of calculating Union consumption.

• (100) As the Union industry is mostly vertically integrated and cold-rolled flat steel products are regarded as a primary material for the production of various value added downstream products, captive and free market consumptions were analysed separately.

• (101) The distinction between captive and free market is relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports, and transfer prices are set within the groups according to various price policies and are therefore not reliable. By contrast, production destined for the free market is in direct competition with imports of the product concerned, and prices are free market prices.

• (102) To provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire activity of cold-rolled flat steel products and determined whether the production was destined for captive use or for the free market. The Commission found that around 82 % of the total Union producers' production was destined for captive use.

4.2.1.   Captive consumption

• (103) The Commission established the Union captive consumption on the basis of the captive use and captive sales on the Union market of all known producers in the Union. On this basis, the Union captive consumption developed as follows:

Table 5

Captive consumption (tonnes)

	2011	2012	2013	2014	IP
Captive consumption	29 121 785	27 555 796	28 900 235	30 309 067	30 183 620
Index (2011 = 100)	100	95	99	104	104
Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.

• (104) During the period considered, the Union captive consumption increased by around 4 %. This increase is mainly due to a growth of the captive markets, such as for the automotive industry.

4.2.2.   Free market consumption

• (105) The Commission established the Union free market consumption on the basis of: (a) the sales on the Union market of all known producers in the Union; and (b) the imports into the Union from all third countries as reported by Eurostat, thereby also considering the data submitted by the cooperating exporting producers in the countries concerned. On this basis, the Union free market consumption developed as follows:

Table 6

Free market consumption (tonnes)

	2011	2012	2013	2014	IP
Free market consumption	7 839 959	6 819 677	7 376 829	7 152 193	7 122 682
Index (2011 = 100)	100	87	94	91	91
Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.

• (106) During the period considered, the Union free market consumption decreased by around 9 %. The drop is mainly due to a slow or lack of economic recovery for the downstream industry.

4.3.   IMPORTS FROM THE COUNTRIES CONCERNED

4.3.1.   Cumulative assessment of the effects of imports from the countries concerned

• (107) The Commission examined whether imports of the product concerned originating in the countries concerned should be assessed cumulatively, in accordance with Article 3(4) of the basic Regulation.

• (108) The margins of dumping established in relation to the imports from the PRC and Russia are summarised under recital 57 and recital 93 above. All these margins are well above the de minimis threshold laid down in Article 9(3) of the basic Regulation.

• (109) The volume of imports from each of the countries concerned was not negligible within the meaning of Article 5(7) of the basic Regulation. The PRC and Russia held, in the investigation period, an EU market share of 10,3 % and 9,8 % respectively.

• (110) The conditions of competition between the dumped imports from the countries concerned and the like product were also similar. Indeed, the imported products competed with each other and with the product concerned produced in the Union because they were sold to similar categories of end customers.

• (111) Therefore and contrary to the claim made by one interested party, all criteria set out in Article 3(4) of the basic Regulation were met and imports from the countries concerned were examined cumulatively for the purposes of the injury determination.

4.3.2.   Volume and market share of the imports from the countries concerned

• (112) The Commission established the volume of imports on the basis of the Eurostat database. The market share of the imports was established by comparing import volumes with the Union free market consumption as reported in Table 6 above.

• (113) Imports into the Union from the countries concerned developed as follows:

Table 7

Import volume (tonnes) and market share

	2011	2012	2013	2014	IP
Volume of imports from the countries concerned	1 117 820	917 610	1 380 382	1 344 898	1 430 044
Index (2011 = 100)	100	82	123	120	128
Market share countries concerned	14,3 %	13,5 %	18,7 %	18,8 %	20,1 %
Index (2011 = 100)	100	94	131	132	141
Volume of imports from the PRC	651 654	406 811	653 366	620 140	732 383
Index (2011 = 100)	100	62	100	95	112
Market share PRC	8,3 %	6 %	8,9 %	8,7 %	10,3 %
Index (2011 = 100)	100	72	107	104	124
Volume of imports from Russia	466 165	510 800	727 016	724 758	697 661
Index (2011 = 100)	100	110	156	155	150
Market share Russia	5,9 %	7,5 %	9,9 %	10,1 %	9,8 %
Index (2011 = 100)	100	126	166	170	165
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (114) The above table shows that in absolute figures the imports from the countries concerned have increased significantly during the period considered. In parallel, the total market share of the dumped imports into the Union increased by 5,8 percentage points during the period considered.

4.3.3.   Prices of the imports from the countries concerned and price undercutting

• (115) The Commission established the prices of imports on the basis of Eurostat data. The weighted average price of imports into the Union from the countries concerned developed as follows:

Table 8

Import prices (EUR/tonne)

	2011	2012	2013	2014	IP
PRC	619	589	533	510	505
Index (2011 = 100)	100	95	86	82	82
Russia	630	574	518	499	489
Index (2011 = 100)	100	91	82	79	78
Average price of dumped imports	624	581	525	504	497
Index (2011 = 100)	100	93	84	81	80
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (116) The average prices of the dumped imports decreased from 624 EUR/tonne in 2011 to 497 EUR/tonne during the investigation period. During the period considered, the decrease of the average unit price of the dumped imports was around 20 %.

• (117) The Commission assessed the price undercutting during the investigation period by comparing:

• (a) the weighted average sales prices per product type of the five Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level; and

• (b) the corresponding weighted average prices at CIF Union frontier level per product type of the imports from the cooperating producers of the countries concerned to the first independent customer on the Union market, with appropriate adjustments for post-importation costs.

• (118) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the Union producers' turnover during the investigation period.

• (119) On the basis of the above, the dumped imports from the countries concerned were found to undercut the Union industry prices by respectively 8,1 % and 14,4 % for the PRC and Russia.

4.4.   ECONOMIC SITUATION OF THE UNION INDUSTRY

4.4.1.   General remarks

• (120) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (121) The macroeconomic indicators (production, production capacity, capacity utilisation, sales volume, stock, growth, market share, employment, productivity and magnitude of dumping margins) were assessed at the level of the whole Union industry. The assessment was based on the information provided by the complainant, cross-checked with data provided by Union producers and available official statistics (Eurostat).

• (122) The analysis of microeconomic indicators (sale prices, profitability, cash flow, investments, return on investments, ability to raise capital, wages and cost of production) was carried out at the level of the sampled Union producers. The assessment was based on their information, duly verified.

• (123) For some injury indicators relating to the Union industry, the Commission analysed separately data related to the free and the captive market and made a comparative analysis. These factors are: sales and market share, unit prices, unit cost and profitability. However, other economic indicators could meaningfully be examined only by referring to the whole activity, including the captive use of the Union industry because they depend on the whole activity, whether the production is captive or sold on the free market. These factors are: production, capacity, capacity utilisation, cash flow, investments, return on investments, employment, productivity, stocks and labour costs. For these factors, analysis of the whole Union industry is warranted in order to establish a complete injury picture of the Union industry, as the data in question cannot be separated out between captive sales and free sales.

4.4.2.   Macroeconomic indicators

4.4.2.1.   Production, production capacity and capacity utilisation

• (124) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 9

Production, production capacity and capacity utilisation

	2011	2012	2013	2014	IP
Production volume (tonnes)	36 296 343	34 174 111	35 788 676	36 912 062	36 633 691
Index (2011 = 100)	100	94	99	102	101
Production capacity (tonnes)	53 566 734	51 657 090	52 658 719	51 628 090	51 693 593
Index (2011 = 100)	100	96	98	96	97
Capacity utilisation	68 %	66 %	68 %	71 %	71 %
Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.

• (125) During the period considered, the Union industry's production volume increased by 1 %. The reported capacity figures refer to technical capacity, which implies that adjustments, considered as standards by the industry, for set-up time, maintenance, bottle necks and other normal stoppages have been taken into consideration. On this basis, the capacity decreased by 3 % during the period considered in an effort by the Union industry to contribute to the global overcapacity reduction.

• (126) The increase in capacity utilisation rate resulted from a slight increase in the production volume mainly driven by the increase in captive consumption and a capacity reduction.

4.4.2.2.   Sales volume and market share

• (127) The Union industry's sales volume and market share in the free market developed over the period considered as follows:

Table 10

Sales volume and market share (free market)

	2011	2012	2013	2014	IP
Sales volume (tonnes)	5 867 858	5 521 017	5 518 202	5 220 466	5 044 928
Index (2011 = 100)	100	94	94	89	86
Market share	74,8 %	81,0 %	74,8 %	73,0 %	70,8 %
Index (2011 = 100)	100	108	100	98	95
Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.

• (128) The Union industry sales volume on the Union market decreased by 14 % during the period considered, from about 5,9 million tonnes in 2011 to 5 million tonnes during the investigation period.

• (129) During the period considered, the Union industry's market share decreased from 74,8 % to 70,8 %. The decrease of Union industry's sales volume exceeded significantly the decrease in the Union free market consumption. Moreover, to avoid an even stronger shrinking of its market share, the Union industry was forced to lower its sales prices due to the continuous price pressure exerted by the imports concerned.

• (130) As far as the captive market is concerned, the captive volume and market share developed over the period considered as follows:

Table 11

Captive volume and market share

	2011	2012	2013	2014	IP
Captive volume	29 121 785	27 555 796	28 900 235	30 309 067	30 183 620
Index (2011 = 100)	100	95	99	104	104
Market share (out of total captive and free markets)	79 %	80 %	80 %	81 %	81 %
Index (2011 = 100)	100	100	102	101	103
Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.	Source: Verified Eurofer questionnaire reply and Eurostat.

• (131) The Union industry captive volume (composed of captive use and captive sales) on the Union market increased by 4 % during the period considered, from about 29,1 million tonnes in 2011 to 30,2 million tonnes during the investigation period.

• (132) As a consequence, the Union industry's captive market share expressed as a percentage of total consumption (both captive and free market) increased from 79 % to 81 % over the period considered.

4.4.2.3.   Employment and productivity

• (133) Employment and productivity developed over the period considered as follows:

Table 12

Employment and productivity

	2011	2012	2013	2014	IP
Number of employees (Full time employment/FTE)	21 598	21 292	20 331	19 781	19 513
Index (2011 = 100)	100	99	94	92	90
Productivity (tonne/FTE)	1 681	1 605	1 760	1 866	1 877
Index (2011 = 100)	100	96	105	111	112
Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.

• (134) The level of the Union industry employment decreased significantly in the period considered in order to reduce production costs and gain efficiency in view of the increasing competition from dumped imports on the market. This resulted in a reduction of workforce by 10 % during the period considered. As a consequence and in view of the slightly increasing production volume (+ 1 %) over the period considered, the productivity of the Union industry's workforce, measured as output per person employed per year, increased much more than the decrease in actual production. This shows that the Union industry was willing to adapt to the changing market conditions in order to remain competitive.

4.4.2.4.   Inventories

• (135) Stock levels of the Union producers developed over the period considered as follows:

Table 13

Inventories

	2011	2012	2013	2014	IP
Closing stocks (tonnes)	1 270 093	1 119 887	1 201 229	1 190 252	1 075 152
Index (2011 = 100)	100	88	95	94	85
Closing stocks as a percentage of production	3,5 %	3,3 %	3,4 %	3,2 %	2,9 %
Index (2011 = 100)	100	94	96	92	84
Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.	Source: Verified Eurofer questionnaire reply.

• (136) During the period considered the level of closing stocks decreased by 15 %. Most types of the like product are produced by the Union industry based on specific orders of the users. Therefore, stocks are not considered to be an important injury indicator for this industry. This is also confirmed by analysing the evolution of the closing stocks as a percentage of production. As can be seen above, this indicator remained relatively stable at ca. 3 % of the production volume.

4.4.2.5.   Magnitude of the dumping margin

• (137) All dumping margins were significantly above the de minimis level. The impact of the magnitude of the actual high margins of dumping on the Union industry was not negligible, given the volume and prices of imports from the countries concerned.

4.4.2.6.   Growth

• (138) The Union consumption decreased by around 9 % during the period considered, while the sales volume of the Union Industry on the Union market decreased by 14 %. The Union industry thus lost market share, contrary to the market share of the imports from the countries concerned which increased during the period considered.

4.4.3.   Microeconomic indicators