Commission Implementing Regulation (EU) 2016/1777 of 6 October 2016 imposing a provisional anti-dumping duty on imports of certain heavy plate of non-alloy or other alloy steel originating in the People's Republic of China

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 13 February 2016, the European Commission (‘the Commission’) initiated an anti-dumping investigation into imports into the European Union (‘the Union’) of flat products of non-alloy or alloy steel (excluding stainless steel, silicon-electrical steel, tool steel and high-speed steel), hot-rolled, not clad, plated or coated, not in coils, of a thickness exceeding 10 mm and of a width of 600 mm or more or of a thickness of 4,75 mm or more but not exceeding 10 mm and of a width of 2 050 mm or more (‘heavy plate’) originating in the People's Republic of China (‘the PRC’) on the basis of Article 5 of Council Regulation (EC) No 1225/2009 (2) (‘the basic Regulation’).

(2) The Commission published a Notice of Initiation in the Official Journal of the European Union (3) (‘the Notice of Initiation’).

(3) The Commission initiated the investigation following a complaint lodged on 4 January 2016 by the European Steel Association (‘Eurofer’ or ‘the complainant’) on behalf of producers representing more than 25 % of the total Union production of heavy plate.

(4) The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(5) Following a request by the complainant supported by the required evidence, the Commission published on 10 August 2016 Implementing Regulation (EU) 2016/1357 (4) making imports of heavy plate originating in the PRC subject to registration as of 11 August 2016 (‘the registration Regulation’).

(6) 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 authorities of the PRC, known importers, suppliers and users, traders and associations known to be concerned about the initiation and invited them to participate.

(7) Interested parties were given the opportunity to make their views known in writing on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(8) The Commission also informed producers in Australia, Brazil, Canada, India, Japan, the Republic of Korea, Malaysia, Mexico, Russia, the Former Yugoslav Republic of Macedonia, Ukraine and the United States of America about the initiation and invited them to participate.

(9) In the Notice of Initiation, the Commission informed interested parties that it envisaged the use of the United States of America as the third market economy country (‘analogue country’) within the meaning of Article 2(7)(a) of the basic Regulation.

(10) Interested parties had an opportunity to comment on the appropriateness of the choice of the analogue country and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(11) In the Notice of Initiation, the Commission stated that it might sample exporting producers, Union producers and unrelated importers in the Union in accordance with Article 17 of the basic Regulation.

(12) 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 sales volumes of the like product in the investigation period whilst ensuring a geographical spread.

(13) This provisional sample consisted of three Union producers located in three different Member States and accounted for over 26 % of the total sales of heavy plate by the Union producers responding to the standing exercise. The Commission invited interested parties to comment on the provisional sample.

(14) The Complainant and the sampled company itself submitted that it was not appropriate that Metinvest Trametal Spa (‘Trametal’) be included in the sample as this company is not an integrated mill but rather a re-roller of purchased slab from a related company in Ukraine and therefore allegedly not representative of the Union industry.

(15) The Union industry consists of both integrated mills and re-rollers, and both types of Union producers are among the complainants. However, the vast majority of the heavy plates produced by the Union industry are produced by integrated mills.

(16) The Commission established in addition that Trametal obtains slabs, the main input material typically accounting for around 70 % of total costs, from their related company in Ukraine. Therefore, in particular indicators relating to costs and profitability are directly impacted by this relationship as well as the performance and the particular situation of the related Ukrainian company supplying the slabs.

(17) The Commission notes however that the situation of both types of the Union producers — integrated mills and re-rollers is fully reflected in the macroeconomic indicators described in recitals (105) to (124) below.

(18) For the reasons listed in recitals (14) to (16) above the Commission however provisionally considers that the particular situation of Trametal is not representative for the Union industry and that the microeconomic indicators described in recitals (125) to (138) below should not be affected by it.

(19) The Commission found this comment to be warranted and, after having considered the preliminary injury information at hand, it replaced Trametal in the sample by Ilsenburger Grobblech GmbH, the second biggest Union producer when ranked according to Union sales volume in the investigation period as defined in recital (28) below.

(20) On 7 March 2016 the Commission made available to interested parties a note explaining the reasons for changing the sample and listing the companies included in the revised sample. No interested parties commented on the final sample.

(21) The Commission requested 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.

(22) Six importers provided the requested information and agreed to be included in the sample. Three of them were sampled.

(23) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC 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 to identify and/or contact exporting producers that could be interested in participating in the investigation.

(24) Fourteen exporting producers in the PRC provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three 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. No comments were received and the sample was therefore confirmed.

(25) Seven exporting producers in the PRC indicated that they wished to request individual examination under Article 17(3) of the basic Regulation. However, none of them replied to the questionnaire and, thus, no requests for individual examinations were received.

(26) 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 three Union producers, six unrelated importers, ten users, a group of steel service centres, the three sampled exporting producers in the PRC, and two producers in different analogue countries.

(28) The investigation of dumping and injury covered the period from 1 January 2015 to 31 December 2015 (‘the investigation period’ or ‘IP’).

(29) The examination of trends relevant for the assessment of injury covered the period from 1 January 2012 to the end of the investigation period (‘the period considered’).

(30) The product concerned is flat products of non-alloy or alloy steel (excluding stainless steel, silicon-electrical steel, tool steel and high-speed steel), hot-rolled, not clad, plated or coated, not in coils, of a thickness exceeding 10 mm and of a width of 600 mm or more or of a thickness of 4,75 mm or more but not exceeding 10 mm and of a width of 2 050 mm or more currently falling within CN codes ex 7208 51 20, ex 7208 51 91, ex 7208 51 98, ex 7208 52 91, ex 7208 90 20, ex 7208 90 80, 7225 40 40, ex 7225 40 60 and ex 7225 99 00 (‘heavy plate’) and originating in the PRC.

(31) Heavy plate is used in the manufacture of construction, mining and logging equipment; pressure vessels; oil and gas pipelines; shipbuilding and bridges and buildings.

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

(34) One interested party argued that the product scope is defined too widely. In particular, it argues that the product scope should be limited to so-called ‘commodity heavy plates’, while so-called ‘special heavy plates’ should be excluded from the product definition. In supporting its claim, it mainly relies on two arguments.

(35) Firstly, it argues that the information provided in the complaint mainly relates to ‘commodity heavy plates’, which account for the majority of exports from the PRC. Secondly, it argues that the product scope is wider than the definition of the like product in Article 1(4) of the basic Regulation.

(36) The Commission notes in this respect that at the complaint stage only sufficient evidence concerning dumping, injury and a causal link has to be provided. It is therefore not required to provide information about the complete product range at that stage. Limiting the analysis to the most commonly sold grades exported does not mean that the product definition has to be limited to those product types.

(37) Secondly, Article 1(4) of the basic Regulation provides that the like product has to be identical or closely resembling to the product under consideration. This, however, does not refer to the definition of the product under consideration as such. The various types of the product under consideration merely have to share the same basic characteristics, which is the case as described in recital (32) above.

(38) The parameters which allegedly differentiate ‘special heavy plates’ from commodity heavy plates are the chemical composition, the mechanical/technological composition, the delivery condition, the thickness and the certification and inspection for shipbuilding purposes.

(39) Except of the thickness, none of these parameters concern the basic properties of the product. The party argues that all products with a thickness > 50,8 mm should be excluded from the product scope. In support of the thickness limit, the only argument brought forward by the party is that the complaint did allegedly merely targets heavy plates with a thickness < 50,8 mm, since the prima facie evidence provided in one Annex of the complaint concerning the dumping calculation is limited to such products.

(40) It is however clear that product definition in the complaint also covers products with a thickness > 50,8 mm, as the product definition does not contain an upper limit for the thickness. As stated above, the mere reason that the prima facie evidence on dumping only covers the most commonly exported product types does not mean that the product definition is limited to those types.

(41) The Commission therefore provisionally concludes to leave the product definition unchanged.

(42) As set out in Article 2(7)(b) of the basic Regulation, if an exporting producer in the PRC complies with the criteria in Article 2(7)(c) and is therefore granted MET, the Commission then determines normal value for that company in accordance with Articles 2(1) to (6).

(43) The Commission sent a MET claim form to all the sampled exporting producers in order that they could claim that they should be granted MET. None of them returned the claim form and therefore none of the companies could be granted MET.

(44) Normal value was therefore determined on the basis of the price or constructed value in a market economy third country as set out in Article 2(7)(a) of the basic Regulation. For this purpose, an analogue country had to be selected.

(45) In the Notice of Initiation, the Commission indicated that it envisaged the use of the United States of America as analogue country and invited interested parties to comment. No comments were received.

(46) Questionnaires were sent to all known producers of heavy plate in the countries named in recital (8) above and two replies were received: one from a producer in Australia and one from a producer in the United States of America.

(47) The reply from the producer in the United States of America showed evidence of production and sales on the US domestic market.

(48) In its questionnaire reply the US producer informed the Commission that the normal US customs duty on imports of heavy plate is zero. Anti-dumping duties are in force on imports from the PRC, and both anti-dumping and anti-subsidy duties on imports from India, Indonesia and the Republic of Korea.

(49) There are 7 US producers on the domestic US market, and imports from the Republic of Korea, Germany, France and Canada with a market share of 20 %.

(50) The reply from the Australian producer contained evidence of production and sales on the Australian domestic market, and that it is the only producer in Australia. However, the imports into Australia have a market share of 35 %. Anti-dumping duties are in force on imports from the PRC, Indonesia, Japan, the Republic of Korea and Taiwan, but these duties are low and for some companies zero.

(51) The Australian domestic market can be considered more competitive because imports take a larger market share and duties on imports are lower.

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

(53) 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, under Article 2(7)(a) of the basic Regulation.

(54) 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.

(55) The domestic sales are representative if the analogue country producer's 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 exporting producer in the PRC during the investigation period.

(56) On this basis, the total sales of the cooperating producer of the like product on the domestic market of the analogue country were representative.

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

(58) The Commission then examined whether the domestic sales by the analogue country producer on its domestic market for each product type that was identical or comparable with a product type sold for export to the Union by each sampled exporting producer in the PRC were representative, in accordance with Article 2(2) of the basic Regulation.

(59) 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 by each sampled exporting producer in the PRC of the identical or comparable product type to the Union.

(60) The Commission found that some product types were representative on this basis, but others were not, either due to low quantities or because the exported product type was not sold domestically by the analogue country producer.

(61) 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.

(63) 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.

(65) When a product type was not sold in representative quantities or not sold at all or all sales were at a loss 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.

(66) For every 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 each of those types to their average cost of production.

(67) For product types not sold at all or where all sales were at a loss on the domestic market, normal value was constructed by adding the average selling, general and administrative (‘SG&A’) expenses and profit in the ordinary course of trade of the like product on the domestic market to the average cost of production of each type.

(68) In case where a product type was not sold at all in the domestic market of the analogue country, the cost of production was established on the basis of the cost of the closest cheaper type.

(69) The export price was checked for each sampled exporting producer during the verification visit. When the export to the Union was made to the first unrelated customer directly or via a related trading company, 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.

(70) One of the sampled exporting producers exported heavy plate via a related importer in the Union. The export price for those sales was constructed in line with Article 2(9) of the basic Regulation.

(71) The Commission compared the normal value from the analogue country producer and the export price of the sampled exporting producers on an ex-works basis.