Commission Implementing Regulation (EU) 2017/1480 of 16 August 2017 imposing a provisional anti-dumping duty on imports of certain cast iron articles 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 (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 10 December 2016, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of certain articles of lamellar graphite cast iron (grey iron) or spheroidal graphite cast iron (also known as ductile cast iron), and parts thereof (‘cast iron articles’) originating in the People's Republic of China (‘the PRC’) and in India (‘the countries concerned’) on the basis of Article 5 of Regulation (EU) 2016/1036 (‘the basic Regulation’).

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

(3) The Commission initiated the investigation following a complaint lodged on 31 October 2016 by seven Union producers, namely Fondatel Lecompte SA, Ulefos Niemisen Valimo Oy Ltd, Saint-Gobain PAM SA, Fonderies Dechaumont SA, Heinrich Meier Eisengießerei GmbH & Co. KG, Saint-Gobain Construction Products UK Ltd and Fundiciones de Odena SA (‘the complainants’). The complainants represent more than 40 % of the total Union production of cast iron articles. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(4) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainants, other known Union producers, the known exporting producers and the authorities of the PRC and India, and known importers about the initiation of the investigation and invited them to participate.

(5) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(6) In the Notice of Initiation, the Commission informed interested parties that it had provisionally chosen India as a third market economy country (‘analogue country’) within the meaning of Article 2(7)(a) of the basic Regulation. Interested parties had an opportunity to comment and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(7) An association named Free Castings Imports representing 19 importers submitted comments after the initiation of the investigation (‘association of unrelated importers’). In addition, several Indian exporting producers, the Indian industry, and the China Chamber of Commerce for Import and Export of Machinery and Electronic products (‘CCCME’) submitted comments after the initiation of the proceeding.

(8) Some interested parties argued that the complaint lacked the necessary level of prima facie evidence to result in the initiation of an investigation, as it did not provide complete and factual evidence for its claims and no data was given on the cost of production and domestic prices of Chinese exporting producers. They argued that those data are necessary in order to initiate an investigation against a market economy country such as the PRC.

(9) The Commission carried out an examination of the complaint in accordance with Article 5 of the basic Regulation, coming to the conclusion that the requirements for initiation of an investigation were met, i.e. that the adequacy and accuracy of the evidence presented by the complainant was sufficient. It is recalled that, according to Article 5(2) of the basic Regulation, a complaint shall contain such information as is reasonably available to the complainant, such as reports and publicly available statistics. Finally, pursuant to Article 2(7) of the basic Regulation, the normal value contained in the complaint on the basis of analogue country data constituted sufficient prima facie evidence for initiating the investigation. This claim was therefore rejected.

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

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

(12) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the highest representative sales volumes of the like product in the investigation period whilst ensuring a spread in product types and a geographical spread.

(13) This sample consisted of three Union producers, EJ Picardie, Saint-Gobain PAM SA, and Heinrich Meier Eisengießerei GmbH & Co. KG. The sampled Union producers accounted for 48 % of the total production volume and 43 % of total sales of the Union industry. The Commission invited interested parties to comment on the provisional sample.

(14) The complainants submitted a request to include a fourth Union producer, Fondatel Lecomte. As the complainants did not substantiate their request, the Commission rejected it.

(15) Some interested parties argued that the proposed sample did not give an accurate representation in terms of geographical location of producers or the Union producers' position with respect to the complainants. The proposed sample did only include complainants and a supporter of the complaint, while not including Union producers in the Member States mostly affected by the alleged dumped imports from the PRC or Union producers from Central and Eastern European countries.

(16) The Commission noted that the sample included the largest markets for the product concerned and the largest producers in terms of volume and sales on the Union market which could reasonably be investigated within the time available.

(17) Indian exporting producers argued that the sample of Union producers is not representative, as it includes companies that are themselves importers of the allegedly dumped product.

(18) The Commission noted that indeed one of the sampled Union producers imports the product concerned in order to complete its product range. The Commission found that the imported quantity is much smaller than the quantity produced by this company as it represents less than 15 % of its total Union sales and therefore considers that the sampled Union producer is representative of the Union industry.

(19) In light of the above, the Commission confirmed that the sample is representative of the Union industry.

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

(21) Twenty-eight unrelated importers 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 unrelated importers on the basis of the largest volume of imports into the Union. In accordance with Article 17(2) of the basic Regulation, all known importers concerned were consulted on the selection of the sample. No comments were received.

(22) To decide whether sampling is 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 other exporting producers, if any, that could be interested in participating in the investigation.

(23) Eighty-one exporting producers in the PRC provided the requested information and agreed to be included in the sample. The Commission found seventy-eight exporting producers/groups of exporting producers to be admissible to the sample. Three producers reported no exports of the product concerned to the EU during the investigation period and therefore were not considered admissible to the sample. The Commission provisionally selected a sample of three cooperating producers on the basis of the largest representative volume of exports to the Union. 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 selected sample. Some interested parties invited the Commission to expand its sample in order to improve its representativeness. The Commission took these comments into account. The definitive sample included the five largest exporting producers to the Union which could reasonably be investigated within the time available. The Mission of the People's Republic of China to the European Union expressed its support on the final sample.

(24) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in India to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of India to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(25) Twenty-two exporting producers/groups of exporting producers in India provided the requested information and agreed to be included in the sample. The Commission found 21 exporting producers/groups of exporting producers to be admissible to the sample. One producer reported no exports of the product concerned to the EU during the investigation period and therefore was not considered admissible to the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three 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 India, were consulted on the selection of the sample.

(26) The Commission received comments from two exporting producers that selection of only three groups of companies on the basis of the largest representative volume of exports to the Union is not representative of the significant diversity present in the Indian market. As the three provisionally selected groups of companies represented substantial part of exports from India to the EU during the investigation period and could reasonably be investigated within the time available, the Commission confirmed the provisional sample.

(27) For the PRC, eighteen non-sampled exporting producers formally requested individual examination under Article 17(3) of the basic Regulation. The examination of such a high number of requests would be unduly burdensome and cannot be reasonably expected during the time available for this investigation. The Commission has therefore decided that it will not grant any individual examinations.

(28) For India, none of the non-sampled exporting producers/groups of exporting producers requested individual examination under Article 17(3) of the basic Regulation.

(29) For the purposes of Article 2(7)(b) of the basic Regulation, the Commission sent MET claim forms to all cooperating exporting producers in the PRC selected to be in the sample and to the non-sampled cooperating exporting producers that wished to apply for an individual dumping margin. Only one of the exporting producers in the PRC selected in the sample submitted an MET claim form, which was assessed by the Commission.

(30) The Commission sent questionnaires to all sampled companies, to all exporting producers intending to ask individual examination and to ten potential analogue country producers.

(31) The Commission received questionnaire replies from the three sampled Union producers, three unrelated importers, the five sampled exporting producers in the PRC, eighteen exporting producers in the PRC requesting an individual examination, the three sampled groups of exporting producers in India, and three analogue country producers.

(33) The investigation of dumping and injury covered the period from 1 October 2015 to 30 September 2016 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2013 to the end of the investigation period (‘the period considered’).

(34) Some interested parties argued that the period considered is unusually short and highly selective and therefore too short to allow a proper analysis.

(35) The Commission noted that the period considered is not unusually short (3). For the current investigation, the period considered consists of the investigation period plus the 3 preceding years, resulting in a total of 3 years and three quarters. This was found to be reasonable to examine the trends relevant for the assessment of injury. It covers more than 3 years which is in line with the Commission practice and therefore it is not unusually short.

(38) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(39) The Indian exporting producers argued that the product scope is defined too widely. In particular, they argued that channel gratings, subject to the EN 1433 norm, should be excluded from the product scope. In supporting their claim, they mainly rely on the following arguments.

(40) First, they argued that the components for channel gratings are produced according to different production processes and are only produced in limited number in the Union. Second, they argued that the frames and rails of channel gratings have different basic physical characteristics and are only a component of the linear drainage systems sold on the Union market.

(41) One Chinese exporting producer made a similar request, arguing in addition to the above arguments that channel gratings are not interchangeable from manhole covers and are subject to a different industrial standard.

(42) The association of unrelated importers supported the product exclusion request regarding channel gratings and added to the above arguments that channel gratings have different end-uses and applications from the rest of the product concerned and are not in direct competition with products manufactured by the Union producers. According to this association, the know-how to produce channel gratings cannot be found in the Union.

(43) The complainants and one other Union producer stated that they do not object the exclusion of channel gratings.

(44) The investigation confirmed that channel gratings are subject to a separate norm, different from those applicable to the rest of the product concerned, namely the EN 1433 norm. In addition, all interested parties agreed on excluding channel gratings from the product scope in this investigation. Therefore, the Commission provisionally excluded this product from the product concerned and the like product.

(45) One unrelated importer argued that components with a dimension exceeding 1 000 mm clear opening, imported by the unrelated importer Gatic from the PRC (‘Gatic components’), should be excluded from the product scope as these components cannot be considered as constituting together a single product and, because of their size, do not fall under the EN 124 norm. In supporting its claim, it mainly relied on three arguments.

(46) First, it claimed that the Gatic components are produced according to different production processes, as the components are assembled in the Union using UK sourced materials to create the product. Second, it argued that Gatic components have different basic physical characteristics, because they are of a higher quality and require additional engineering as compared to the product concerned to make them gas and air tight. Third, it alleged that Gatic components have different functions and end uses, since they have to be sealed and are typically assembled in a larger structure.

(47) Furthermore, the association of importers argued that cast tops and gratings used as Gatic components are not a standalone product, are not in direct competition with other product types under the product concerned and require additional processing in the production process.

(48) The Indian exporting producers argued that Gatic components, described as a type of product but not limited to a dimension exceeding 1 000 mm clear opening, are produced according to unique processes, resulting in a sealed product which has to be assembled, and that the technical knowhow is not available for the majority of the Union producers.

(49) On the basis of the arguments described in recitals 45-48, the interested parties concerned requested the exclusion of the Gatic components from the product scope.

(50) The complainants did not agree with this request. They argued that the Gatic components have the same basic physical characteristics, the same functions and end uses, and the same production processes as the product concerned. Some other product types within the product concerned allegedly have the same features of gas and air tightness as the Gatic components. They further argued that the product concerned is not defined by the norm and includes a broader range of product types than the EN 124 norm.

(51) The Commission observed that the product scope of the product concerned includes cast iron articles and parts thereof. The argument that the Gatic components do not constitute one product together is therefore irrelevant.

(52) Regarding the physical and technical characteristics of the product, they are determined by function, installation and location, and are mainly the traffic load resistance determined by the so-called loading class, the cover and grate stability within the frame and the safe and easy access. The product can be grey or ductile cast iron and the cover and/or the frame of manhole can be filled with concrete or other materials. The product can comply with a specific norm. As for the functions and end uses of the product, castings cover and frames provide an interface between buried networks and the road or pavement surface. The product is produced in foundries, which are the same as or similar to those making other types of the product concerned.

(53) All of the above characteristics also apply to the Gatic components, regardless of the dimension of the product's clear opening. The Gatic components cannot be distinguished from the product concerned in any of the above characteristics. The request to exclude the Gatic components from the product concerned is therefore rejected.

(54) One interested party argued that floor drains, roof drains, cleanouts and covers for cleanouts, and the trademark registered Watts Dead Level Systems, subject to the EN 1253 norm, should be excluded from the scope of the product concerned. In supporting its claim, it argued that the products described by the interested party fall under a different norm than the product concerned.

(55) The complainants clarified that they do not consider such products subject to EN 1253 as being part of the product concerned, because they have a different function and are not used as a municipal casting. Furthermore, the Union industry does not produce these products.