Commission Implementing Regulation (EU) 2020/508 of 7 April 2020 imposing a provisional anti-dumping duty on imports of certain hot rolled stainless steel sheets and coils originating in Indonesia, the People’s Republic of China and Taiwan

• (129) Specifically in the steel sector, as already pointed out, many of the major producers are owned by the State (see recital (123)). Some are specifically referred to in the ‘Steel Industry Adjustment and Upgrading plan for 2016-2020’ ³⁷. The main state-owned producing exporters are often the world leading producers of SSHR, whether integrated or not. For instance, the Chinese State-owned Shanxi Taiyuan Iron & Steel Co. Ltd. (‘TISCO’) mentions on its website that it is ‘a super iron and steel giant as well as leading enterprise in global stainless steel industry’, ‘the biggest stainless steel enterprise equipped with globally biggest capacity and most up-to-date technology and equipment’. Accordingly, ‘TISCO has developed into an extraordinary large-scale iron and steel complex, which is integrated with business of iron mining, iron and steel production, processing, delivery and trading’ ³⁸. Baosteel is another major Chinese State-owned enterprise that engages in stainless steel manufacturing and is detained by the recently consolidated China Baowu Steel Group Co. Ltd. (formerly Baosteel Group and Wuhuan Iron & Steel) ³⁹.

• (130) The GOC is also present in the stainless steel enterprises by personal appointments. An example of such approach is the stainless steel producer TISCO, where the appointed Deputy Secretary of the CCP Committee was also nominated the President of TISCO by a decision from the Shanxi Province CCP Committee and Government ⁴⁰.

• (131) The State’s presence and intervention in the financial markets (see also section h) below) as well as in the provision of raw materials and inputs further have an additional distorting effect on the SSHR market ⁴¹. Thus, the State presence in firms, including SOEs, in the steel and other sectors (such as the financial and input sectors including NFM) allow the GOC to interfere with respect to prices and costs.

• (132) GOC directly intervenes in the pricing of capital, labour, land, raw-materials and basic inputs to the production process. Although the prices for final products are mostly determined by market mechanisms, the price distortions created at the beginning of the value chain cast long shadows at these very prices and create ‘wrong’ price signals that do not reflect the true scarcities in the industry and distort the profit/loss balances of all players involved.

(e) Significant distortions according to Article 2(6a)(b), third indent of the basic Regulation: public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces

• (133) The direction of the Chinese economy is to a significant degree determined by an elaborate system of planning which sets out priorities and prescribes the goals the central and local governments must focus on. Relevant plans exist on all levels of government and cover virtually all economic sectors. The objectives set by the planning instruments are of binding nature and the authorities at each administrative level monitor the implementation of the plans by the corresponding lower level of government. Overall, the system of planning in the PRC results in resources being driven to sectors designated as strategic or otherwise politically important by the government, rather than being allocated in line with market forces ⁴².

• (134) The steel industry is regarded as a key industry by the GOC ⁴³. This is confirmed in the numerous plans, directives and other documents focused on steel, which are issued at national, regional and municipal level such as the ‘Steel Industry Adjustment and Upgrading plan for 2016-2020’. This Plan states that the steel industry is ‘an important, fundamental sector of the Chinese economy, a national cornerstone’ ⁴⁴. The main tasks and objectives set out in this Plan cover all aspects of the development of the industry ⁴⁵.

• (135) The 13^th Five-Year Plan on Economic and Social Development ⁴⁶ envisages support to enterprises producing high-end steel product types ⁴⁷. It also focuses on achieving product quality, durability and reliability by supporting companies using technologies related to clean steel production, precision rolling and quality improvement ⁴⁸.

• (136) The ‘Catalogue for Guiding Industry Restructuring (2011 Version) (2013 Amendment)’ ⁴⁹ (‘the Catalogue’) lists iron and steel as encouraged industries.

• (137) The GOC further guides the development of the sector in accordance with a broad range of policy tools and directives related to, inter alia: market composition and restructuring, raw materials, investment, capacity elimination, product range, relocation, upgrading, etc. Through these and other means, the GOC directs and controls virtually every aspect in the development and functioning of the sector ⁵⁰. The current problem of overcapacity is arguably the clearest illustration of the implications of the GOC’s policies and the resulting distortions.

• (138) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of SSHR, as part of the encouraged steel sector. Such measures impede market forces from operating normally.

(f) Significant distortions according to Article 2(6a)(b), fourth indent of the basic Regulation: the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws

• (139) According to the information on file, the Chinese bankruptcy system delivers inadequately on its own main objectives such as to fairly settle claims and debts and to safeguard the lawful rights and interests of creditors and debtors. This appears to be rooted in the fact that while the Chinese bankruptcy law formally rests on principles that are similar to those applied in corresponding laws in countries other than the PRC, the Chinese system is characterised by systematic under-enforcement. The number of bankruptcies remains notoriously low in relation to the size of the country’s economy, not least because the insolvency proceedings suffer from a number of shortcomings, which effectively function as a disincentive for bankruptcy filings. Moreover, the role of the State in the insolvency proceedings remains strong and active, often having direct influence on the outcome of the proceedings ⁵¹.

• (140) In addition, the shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in the PRC ⁵². All land is owned by the Chinese State (collectively owned rural land and State-owned urban land). Its allocation remains solely dependent on the State. There are legal provisions that aim at allocating land use rights in a transparent manner and at market prices, for instance by introducing bidding procedures. However, these provisions are regularly not respected, with certain buyers obtaining their land for free or below market rates ⁵³. Moreover, authorities often pursue specific political goals including the implementation of the economic plans when allocating land ⁵⁴.

• (141) Much like other sectors in the Chinese economy, the producers of SSHR are subject to the ordinary rules on Chinese bankruptcy, corporate, and property laws. That has the effect that these companies, too, are subject to the top-down distortions arising from the discriminatory application or inadequate enforcement of bankruptcy and property laws. The present investigation revealed nothing that would call those findings into question. As such, the Commission preliminarily concluded that the Chinese bankruptcy and property laws do not work properly, thus generating distortions when maintaining insolvent firms afloat and when allocating land use rights in the PRC. Those considerations, on the basis of the evidence available, appear to be fully applicable also in the stainless steel sector.

• (142) In light of the above, the Commission concluded that there was discriminatory application or inadequate enforcement of bankruptcy and property laws in the steel sector, including with respect to the product concerned.

(g) Significant distortions according to Article 2(6a)(b), fifth indent of the basic Regulation: wage costs being distorted

• (143) A system of market-based wages cannot fully develop in the PRC as workers and employers are impeded in their rights to collective organisation. The PRC has not ratified a number of essential conventions of the International Labour Organisation (‘ILO’), in particular those on freedom of association and on collective bargaining ⁵⁵. Under national law, only one trade union organisation is active. However, this organisation lacks independence from the State authorities and its engagement in collective bargaining and protection of workers’ rights remains rudimentary ⁵⁶. Moreover, the mobility of the Chinese workforce is restricted by the household registration system, which limits access to the full range of social security and other benefits to local residents of a given administrative area. This typically results in workers who are not in possession of the local residence registration finding themselves in a vulnerable employment position and receiving lower income than the holders of the residence registration ⁵⁷. Those findings lead to the distortion of wage costs in the PRC.

• (144) No evidence was submitted to the effect that the steel sector, including the producers of SSHR, would not be subject to the Chinese labour law system described. The SSHR part of the steel sector is thus affected by the distortions of wage costs both directly (when making the product concerned) as well as indirectly (when having access to capital or inputs from companies subject to the same labour system in the PRC).

(h) Significant distortions according to Article 2(6a)(b), sixth indent of the basic Regulation: access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the State

• (145) Access to capital for corporate actors in the PRC is subject to various distortions.

• (146) Firstly, the Chinese financial system is characterised by the strong position of State-owned banks ⁵⁸, which, when granting access to finance, take into consideration criteria other than the economic viability of a project. Similarly to non-financial SOEs, the banks remain connected to the State not only through ownership but also via personal relations (the top executives of large State-owned financial institutions are ultimately appointed by the CCP) ⁵⁹ and, again just like non-financial SOEs, the banks regularly implement public policies designed by the government. In doing so, the banks comply with an explicit legal obligation to conduct their business in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State ⁶⁰. This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁶¹.

• (147) While it is acknowledged that various legal provisions refer to the need to respect normal banking behaviour and prudential rules such as the need to examine the creditworthiness of the borrower, the overwhelming evidence, including findings made in trade defence investigations, suggests that these provisions play only a secondary role in the application of the various legal instruments.

• (148) Furthermore, bond and credit ratings are often distorted for a variety of reasons including the fact that the risk assessment is influenced by the firm’s strategic importance to the GOC and the strength of any implicit guarantee by the government. Estimates strongly suggest that Chinese credit ratings systematically correspond to lower international ratings ⁶².

• (149) This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁶³. This results in a bias for lending to SOEs, large well-connected private firms and firms in key industrial sectors, which implies that the availability and cost of capital is not equal for all players on the market.

• (150) Secondly, borrowing costs have been kept artificially low to stimulate investment growth. This has led to the excessive use of capital investment with ever lower returns on investment. This is illustrated by the recent growth in corporate leverage in the state sector despite a sharp fall in profitability, which suggests that the mechanisms at work in the banking system do not follow normal commercial responses.

• (151) Thirdly, although nominal interest rate liberalization was achieved in October 2015, price signals are still not the result of free market forces, but are influenced by government induced distortions. Indeed, the share of lending at or below the benchmark rate still represents 45 % of all lending and recourse to targeted credit appears to have been stepped up, since this share has increased markedly since 2015 in spite of worsening economic conditions. Artificially low interest rates result in under-pricing, and consequently, the excessive utilization of capital.

• (152) Overall credit growth in the PRC indicates a worsening efficiency of capital allocation without any signs of credit tightening that would be expected in an undistorted market environment. As a result, non-performing loans have increased rapidly in recent years. Faced with a situation of increasing debt-at-risk, the GOC has opted to avoid defaults. Consequently, bad debt issues have been handled by rolling over debt, thus creating so called ‘zombie’ companies, or by transferring the ownership of the debt (e.g. via mergers or debt-to-equity swaps), without necessarily removing the overall debt problem or addressing its root causes.

• (153) In essence, despite the recent steps that have been taken to liberalize the market, the corporate credit system in the PRC is affected by significant distortions resulting from the continuing pervasive role of the state in the capital markets.

• (154) No evidence was submitted to the effect that the steel sector, including stainless steel production, would be exempted from the above-described government intervention in the financial system. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

(i) Systemic nature of the distortions described

• (155) The Commission noted that the distortions described in the Report were characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above in Sections a)–e) as well as in Part A of the Report apply throughout the country and across the sectors of the economy. The same holds true for the description of the factors of production as set out above in Sections f)–h) above and in Part B of the Report.

• (156) The Commission recalls that in order to produce SSHR, a broad range of inputs is needed. When the producers of SSHR purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

• (157) As a consequence, not only the domestic sales prices of SSHR are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also tainted because their price formation is affected by substantial government intervention, as described in Parts A and B of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout the PRC. This means, for instance, that an input produced in the PRC by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth. No evidence or argument to the contrary has been adduced by the GOC or the exporting producers in the present investigation.

(j) Conclusion

• (158) The analysis set out in points a) to i) of this section, which includes an examination of all the available evidence relating to the PRC’s intervention in its economy in general as well as in the steel sector showed that prices or costs of the product concerned, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case.

• (159) Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as discussed in the following section.

3.2.2.2.   Representative country

• (160) The choice of the representative country was based on the following criteria:

• — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income similar to the PRC on the basis of the database of the World Bank ⁶⁴;

• — Production of the product under investigation in that country;

• — Availability of relevant public data in that country;

• — Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection.

• (161) As explained in recitals (33) to (35) the Commission published two notes for the file on the sources for the determination of the normal value.

• (162) In the Note of 9 September, the Commission informed interested parties that, on the basis of the criteria listed in recital (157), it had identified the following four possible representative countries: Brazil, Malaysia, South Africa, and Turkey.

• (163) The Commission received comments from three interested parties: the complainant and two of the sampled Chinese exporting producers.

• (164) Both Chinese exporting producers claimed in their submissions that Malaysia would be the best representative country because it fulfils all the criteria of Article 2(6a)(a) of the basic Regulation, while Brazil and South Africa allegedly have a lower level of social and environmental protection.

• (165) On the other hand, the complainant indicated in its submission that there was no production of the product under investigation in Malaysia or Turkey.

• (166) The Malaysian company identified as potential producer of the product under investigation is, according to the submission of the complainant, engaged only in the rerolling of hot-rolled coils into cold-rolled coils and it apparently did not possess either a melting workshop or a hot-rolling line. The complainant based its claims in this regard on the consolidated audited financial statement of the Acerinox Group of 2017. The financial report of the Group of 2018 also confirmed this allegation.

• (167) With regard to Turkey, the complainant claimed that the company in question was only engaged in the production of an insignificant amount of stainless steel products. Furthermore, this production was limited to long products of martensitic steel with billets as a raw material, which would actually exclude the production of the product under investigation.

• (168) The Commission’s own research confirmed the claims of the complainant on the basis of the consolidated audited report of 2018 of the Acerinox Group and the official websites of the two companies in question.

• (169) The complainant confirmed that the product under investigation is produced in South Africa by one of the companies of the Acerinox Group, as indicated by the Commission in the Note of 9 September. However, the complainant raised several arguments in favour of choosing Brazil as a representative country rather than South Africa.

• (170) First, the complainant indicated that in terms of economic development measured by the GNI index Brazil is much closer to the PRC than South Africa is (South Africa has a significantly lower position in these statistics).

• (171) However, even if in terms of actual GNI data South Africa is more distant from the PRC than Brazil, all three countries are still classified as upper-middle income countries by the World Bank. Therefore, the Commission rejected this claim.

• (172) Second, the complainant claimed that South Africa was the world’s biggest producer of chromium, an important input for stainless steel, and therefore the price level of this input would not be representative.

• (173) The fact that a country produces an input of the product under investigation does not automatically make the price level of imports of that product into that country not representative. The complainant did not provide evidence of the impact of the large domestic production on the import price. Therefore, the Commission found this claim unsubstantiated.

• (174) Finally, the complainant provided the Commission with the publicly available audited accounts of the Brazilian producer of the product under investigation mentioned in the Note of 9 September, which could be used as a source of data for the SG&A costs and profit needed in the calculation of the normal value. For the South African producer identified in the same Note, such data were only available on the consolidated group level.

• (175) Based on the quality and detail of the readily available financial data in Brazil, as provided by the complainant, and also considering the representativeness of the factors of production as explained in section 3.2.2.3 below, the Commission concluded that Brazil should be considered an appropriate representative country in its Note of 10 October.

• (176) Having established Brazil as an appropriate representative country in terms of level of development and availability of relevant import statistics and financial data, the Commission did not consider it necessary to assess the level of social and environmental protection of the potential representative countries.

• (177) No comments from interested parties were received with regard to the Note of 10 October.

• (178) In view of the above analysis, Brazil meets all the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country. In particular, in addition to having a level of economic development similar to the PRC, Brazil has a substantial production of the product under investigation and a complete set of data available for the factors of production, SG&A and profit during the investigation period.

3.2.2.3.   Sources used to establish undistorted costs

• (179) On the basis of the information submitted by the interested parties and other relevant information available in the file, the Commission established in the Note of 9 September an initial list of factors of production and sources intended to be used for all factors of production such as materials, energy and labour used in the production of the product under investigation by the exporting producers. The Commission stated that in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use as much as possible Global Trade Atlas (‘GTA’) to establish the undistorted cost of the factors of production, the statistics of the International Labour Organisation (‘ILO’) and national statistics to establish the undistorted costs of labour, and other sources depending on the selected representative country to establish the undistorted costs of energy (such as electricity, natural gas, and water). In the same note, the Commission identified the Harmonised System (HS) codes of factors of production which, on the basis of information provided by the interested parties, were initially considered to be used for the GTA analysis.

• (180) In this regard, a comment was received only from the complainant indicating that for some factors of production the HS codes proposed by the Commission had too wide a coverage and might include a mix of products not being representative of the chemical composition of the inputs actually used in the production of the product under investigation. The Commission took note of this remark. It was taken into account in further stages of the investigation depending on the goods codes of the representative country and on the findings from the verification visits of the exporting producers.

• (181) The Commission further analysed the initial information received on HS codes from interested parties and found that certain factors of production, i.e. certain raw materials and consumables, were possibly not correctly classified. The amended HS codes and list of factors of production were published in the Note of 10 October. The Commission analysed also the availability of import data which would be used for the calculation of benchmarks for undistorted costs and checked the existence of restrictions in the representative country concerning exports of the factors of production.

• (182) In the Note of 10 October the Commission confirmed that it would use GTA to establish undistorted costs of the factors of production, the ILO statistics and other publicly available sources ⁶⁵ to establish undistorted labour costs, and the tariffs charged by selected Brazilian suppliers of electricity, natural gas and water to establish undistorted costs of those types of energy.

• (183) In the same note, the Commission also informed interested parties that, to establish the undistorted SG&A and profit, it would use the financial data of the sole known Brazilian producer of the product under investigation for which detailed financial data is publicly available – Aperam Inox America do Sul S.A. Interested parties did not submit, and the Commission did not find, publicly available financial data of any other producer of the product under investigation in Brazil.

• (184) Following the Note of 10 October, the Commission did not receive any further comments concerning the sources for undistorted costs and benchmarks. Therefore, the sources listed in recitals (178) to (180) were provisionally confirmed.

3.2.2.4.   Undistorted costs and benchmarks

• (185) As already stated in recitals (176) and (178) to (179), the Commission sought to establish an initial list of factors of production and sources intended to be used for all factors of production such as materials, energy and labour used in the production of the product concerned by the exporting producers.

• (186) The Commission did not receive any comments concerning the list of factors of production following the Note of 10 October where, based on the information received from interested parties, the Commission established a list of all the potential HS codes corresponding to the factors of production used in the manufacturing of the product concerned.

• (187) The Commission then established a definitive list of factors of production and corresponding HS codes after the verification visits at the premises of the sampled exporting producers.

• (188) Considering all the information submitted by interested parties and collected during the verification visits, the following factors of production and HS codes, where applicable, have been identified:

Table 1

Factor of Production	HS code	Undistorted value	Unit
Raw Materials/Auxiliary Materials	Raw Materials/Auxiliary Materials	Raw Materials/Auxiliary Materials	Raw Materials/Auxiliary Materials
Quartzite	2506 20	1 945,57	CNY/t
Fireclay	2508 30	4 109,80	CNY/t
Serpentine	2516 90	4 257,06	CNY/t
Fused magnesia; dead-burned (sintered) magnesia, whether or not containing small quantities of other oxides added before sintering; other magnesium oxide, where or not pure	2519 90	8 993,25	CNY/t
Fluorspar – Containing by weight 97 % or less of calcium fluoride	2529 21	2 126,27	CNY/t
Iron ore, non-agglomerated (powder); Lump Iron Ore	2601 11	8 300,12	CNY/t
Iron ore, agglomerated (sinter)	2601 12	1 165,36	CNY/t
Chromium Ores and Concentrates	2610 00	4 493,41	CNY/t
Fat coal; Coking coal	2701 12	1 412,62	CNY/t
Lean coal; Electric coal; Gas coal	2701 19	1 268,12	CNY/t
Coke; Coke powder; Metallurgical coke	2704 00	2 703,69	CNY/t
Lubricating Oil	2710 19	73,73	CNY/t
Carbon	2803 00	9 656,11	CNY/t
Calcium (Wire)	2805 12	34 597,60	CNY/t
Sulphuric Acid	2807 00	560,10	CNY/t
Nitric Acid	2808 00	2 582,31	CNY/t
Hydrofluoric Acid	2811 11	11 085,17	CNY/t
Ammonia anhydrous	2814 10	1 920,32	CNY/t
Molybdenum oxide or hydroxide	2825 70	134 622,70	CNY/t
Ferrous sulfide	2830 90	92 317,53	CNY/t
Hydrogen Peroxide	2847 00	15 955,82	CNY/t
Core wire; Casting powder	3824 99	15 192,47	CNY/t
Medium Nickel pig iron; Low Nickel pig iron	[N/A] (see recital (190))	84 151,00 Adjusted for actual nickel content66	CNY/t
Ferro Manganese, containing by weight > 2 % carbon	7202 11	8 143,34	CNY/t
Ferro Manganese, containing by weight <= 2 % carbon	7202 19	12 910,85	CNY/t
Ferro-silicon, > 55 % silicon	7202 21	12 754,53	CNY/t
Ferro-silicon manganese	7202 30	8 077,34	CNY/t
Ferro-chromium, > 4 % carbon	7202 41	9 475,88	CNY/t
Ferronickel	[N/A] (see recital (190))	21 879,38	CNY/t
Ferro-molybdenum	7202 70	130 503,79	CNY/t
Ferrotungsten iron	7202 80	200 436,70	CNY/t
Ferro-titanium	7202 91	25 925,68	CNY/t
Ferro-niobium	[N/A] (see recital (190))	145 667,77	CNY/t
Ferro-boron; Ferro-silico-calcium Alloy	7202 99	14 659,67	CNY/t
Cast iron scrap	7204 10	909,47	CNY/t
Stainless steel scrap	7204 21	6 600,08	CNY/t
Ferrous waste and scrap other than turnings, shavings, chips, milling waste, sawdust, filings, trimmings stampings; of material other than cast iron, alloy steel, tinned iron or steel	7204 49	2 388,92	CNY/t
Granules of pig iron, spiegeleisen, iron or steel	7205 10	9 625,10	CNY/t
Iron Torching Powder	7205 29	8 830,75	CNY/t
Molten iron	[N/A] (see recital (190))	2 715,76	CNY/t
Reinforcing Bars	7214 20	3 961,67	CNY/t
Shot Blast pellets	7326 11	7 016,25	CNY/t
Cathodes Copper	7403 11	42 901,10	CNY/t
Other articles of copper; cast, moulded, stamped or forged, but not further worked; excluding chains and parts thereof.	7419 91	276 619,84	CNY/t
Nickel, Not Alloyed	7502 10	98 182,60	CNY/t
Nickel waste and scrap	7503 00	640,77	CNY/t
Nickel bars, rods and profiles of nickel alloys	7505 12	172 600,22	CNY/t
Aluminium Ingot; Aluminium, unwrought, unalloyed	7601 10	15 833,50	CNY/t
Aluminium Wire, not alloyed	7605 11	16 103,02	CNY/t
Aluminium plates, sheets and strip	7606 91	22 469,41	CNY/t
Molybdenum bars and rods	8102 95	817 404,83	CNY/t
Cobalt mattes and other intermediate products of cobalt metallurgy	8105 20	180 180,50	CNY/t
Sponge Titanium	8108 20	72 277,73	CNY/t
Manganese	8111 00	17 032,79	CNY/t
Electrodes of graphite	8545 11	57 656,22	CNY/t
Slab	[N/A] (see recital (190))	14 033,74	CNY/t
Labour	Labour	Labour	Labour
Labour costs in manufacturing sector	[N/A]	33,88	CNY/hour
Energy	Energy	Energy	Energy
Electricity	[N/A]	0,82	CNY/kWh
Natural Gas	[N/A]	3,23	CNY/m3
Water	[N/A]	68,88	CNY/m3
Argon	2804 21	8,03	CNY/m3
Oxygen	2804 40	13,04	CNY/m3

(a) Raw materials and auxiliary materials

• (189) During the verification visits, the Commission verified the raw materials and auxiliary materials used in the manufacture of the product concerned.

• (190) For all raw materials and auxiliary materials, with the exception of those described in recitals (190) and (192) below, the Commission relied on import prices in the representative country. The import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding the PRC. The Commission decided to exclude imports from the PRC into the representative country as it concluded in recital (156) that it is not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices. Furthermore, it appears that the import price of the main raw materials exported by the PRC into Brazil are lower than the weighted average of the imports of other countries. Similarly, import data on imports in the representative country from non-WTO members listed in Annex 1 of Regulation (EU) 2015/755 ⁶⁷ were also excluded. Article 2(7) of the basic Regulation considers that domestic prices in those countries cannot be used for the purpose of determining normal value and, in any event, such import data was negligible.

• (191) In order to establish the undistorted price of raw materials, delivered at the gate of the exporting producer’s factory as provided by Article 2(6a)(a), first indent of the basic Regulation, the Commission added international transport and insurance costs ⁶⁸and applied the import duty of the representative country. At a later stage, during the individual dumping margin calculations, the Commission added company specific domestic transport costs to the import price. The international and domestic transport costs for all raw materials as well as insurance costs were estimated based on the verified data provided by the sampled exporting producers.

• (192) For some raw materials for which there was no benchmark or the available benchmark was considered non-representative ⁶⁹ on the basis of the imports statistics into the representative country, the Commission used benchmarks based on undistorted international prices or other reasonable data. This was done for five inputs:

• (a) ferro-nickel and nickel pig iron – benchmarks were based on the London Metal Exchange adjusted for the nickel content of the alloy,

• (b) ferro-niobium – benchmark was based on GTA, calculated as the weighted average export price of the most relevant exporting country in the IP, Brazil ⁷⁰,

• (c) molten iron – benchmark was based on GTA – calculated as the weighted average price based on the most relevant worldwide exporter in the IP, Iran ⁷¹,

• (d) stainless steel slab – benchmark was on GTA – calculated as the weighted average of all exports from the world’s third largest exporter in the IP, South Korea ⁷².

• (193) Where the export price ⁷³ was used to determine the undistorted price of a raw material, no further adjustments to the data from GTA were made. The Commission considered that the costs between a Brazilian supplier and an international port accounted for the costs between such supplier and its Brazilian customer. The price from GTA could, therefore, be accepted as price of a raw material as delivered at the gate of the exporting producer’s factory.

• (194) For some raw materials and auxiliary materials ⁷⁴, the sampled exporting producers were not able to determine the consumption volume in their records or no proper benchmark could be established in the representative country. Overall, those inputs were negligible in terms of costs. Those costs were included in the manufacturing overheads as explained in recital (198), as the actual costs of those raw materials represented a negligible share on the total actual costs of manufacturing of the sampled exporting companies. The factors of production moved to overheads were listed in the company-specific disclosures.

(b) Labour

• (195) To establish the benchmark for labour costs, the Commission used the ILO statistics together with publicly available information on additional labour costs incurred by an employer in Brazil.

• (196) The ILO statistics ⁷⁵ provided data on the mean weekly hours actually worked per employed person and monthly earnings of employees in manufacturing during the investigation period. Using that data, the Commission calculated an hourly salary in manufacturing, to which additional labour related costs ⁷⁶ (social security and unemployment contributions born by the employer) were added.

(c) Energy inputs

• (197) The electricity price charged by one of the largest electricity suppliers in Brazil, the company EDP Brazil, was readily available ⁷⁷. The information was detailed enough to identify the price of electricity and the price for the use of the distribution system (modalidade tarifaria azul) paid by industrial users.

• (198) It should be noted that in Brazil, the regulatory authority Agência Nacional de Energia Elétrica ⁷⁸ (‘ANEEL’), obliges the electricity suppliers to increase their tariffs by a certain percentage to regulate the consumption of electricity in the country. ANEEL uses a flag system ⁷⁹ (green, yellow, red 1, red 2) to signal whether the electricity price should remain as proposed by the supplier (green) or increased by 0,010 BRL/kWh (yellow), 0,030 BRL/kWh (red 1), or 0,050 BRL/kWh (red 2). The flags are published by ANEEL on a monthly basis and for the investigation period were readily available on the website of EDP Brazil ⁸⁰. When determining the undistorted costs of electricity, the Commission took into account the flags applied during the investigation period and adjusted the price accordingly.

• (199) The water tariff is readily available as charged by the company Sabesp that is responsible for water supply, sewage collection and treatment in the State of Sao Paulo. The information enables to identify tariffs ⁸¹ applicable for industrial users in the investigation period for various sub-regions and municipalities of the State of Sao Paulo ⁸². The Commission based its determination of undistorted costs for water and sewage collection on the tariff applicable to industrial customers in the Metropolitan area of the State of Sao Paulo during the investigation period.

• (200) The price of natural gas is readily available as charged by the biggest gas distributor in Brazil, the company Comgas, which focuses on the State of Sao Paulo. The information provided on Comgas’ website ⁸³ enables to determine the price of natural gas supplied to industrial users.

3.2.2.5.   Manufacturing overhead costs, SG&A and profits

• (201) The manufacturing overheads incurred by the cooperating exporting producers were increased by the costs of raw materials and auxiliary materials referred to in recital (192) and subsequently expressed as a share of the costs of manufacturing actually incurred by each of the sampled exporting producers. This percentage was applied to the undistorted costs of manufacturing.

• (202) For SG&A and profit, the Commission used the financial data of the sole known Brazilian producer of the product under investigation for which detailed financial data is publicly available – Aperam Inox America do Sul S.A. Publicly available audited accounts of the company were made known to the interested parties as an attachment to the Note of 10 October.

3.2.2.6.   Calculation of the normal value

• (203) In order to establish the constructed normal value, the Commission took the following steps.

• (204) Firstly, the Commission established the undistorted costs of manufacturing. It applied the undistorted unit costs to the actual consumption of the individual factors of production of the sampled exporting producers. The costs of manufacturing were reduced by the undistorted costs of by-products re-used in the production process as reported by the companies.

• (205) Secondly, to arrive at the undistorted costs of production, the Commission added the manufacturing overheads determined as described in recital (199) to the undistorted costs of manufacturing.

• (206) Finally, to the costs of production established as described in recital (203), the Commission applied SG&A and the profit of Aperam Inox America do Sul S.A. as explained in recitals (200).

• (207) The SG&A expressed as a percentage of the Costs of Goods Sold (‘COGS’) and applied to the undistorted costs of production amounted to 13,90 %.

• (208) The profit expressed as a percentage of the COGS and applied to the undistorted costs of production amounted to 7,65 %.

• (209) The normal value calculated as described in recitals (202) to (206) was reduced by the undistorted value of the by-products sold by the sampled companies.

• (210) On that basis, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation. Since only two Chinese exporting producers were left in the sample, the Commission constructed the normal value per product type for these exporting producers only.

3.2.3.   Export price

• (211) The Chinese exporting producers in question exported to the Union directly to independent customers or through related companies acting as related exporters in a third country or related importers in the Union.

• (212) Where the exporting producers exported 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.

• (213) Where the exporting producers exported the product concerned to the Union through related importers in the Union, 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 a reasonable profit.

3.2.4.   Comparison

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

• (215) 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 where appropriate for transport, insurance, handling, loading and ancillary costs; credit cost; bank charges; SG&A costs of the related exporters, including mark-up.

• (216) The PRC applies a policy of reimbursing VAT only partially upon export and in this case, depending on the month of the IP, from 0 % to 3 % VAT was not reimbursed. To ensure that the normal value was expressed at the same level of taxation as the export price, the normal value was adjusted upward by that part of VAT charged on exports of the product concerned that was not refunded to the Chinese exporting producers.

3.2.5.   Dumping margin

• (217) For the sampled 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 2(12) of the basic Regulation.

• (218) On that basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are 108,4 % for STSS and 55,6 % for FSS.

• (219) The dumping margin of the cooperating non-sampled Chinese companies, Xiangshui Defeng Metals Co., Ltd and Fujian Dingxin Technology Co., Ltd., is the weighted average between the two individual dumping margins for the sampled companies and established at 87,9 %.

• (220) Taking into account the high level of the cooperation of the Chinese exporting producers at a level of 92 % of the total Chinese exports of the product under investigation to the Union, the Commission considered it representative to set the residual dumping margin applicable to all other (non-cooperating) exporting producers, including the company which received Article 18, at a level of 108,4 %, corresponding to the highest individual dumping margin of the sampled Chinese companies.

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

Company	Provisional dumping margin (%)
Shanxi Taigang Stainless Steel Co., Ltd.84	108,4
Fujian Fuxin Special Steel Co., Ltd	55,6
Xiangshui Defeng Metals Co., Ltd	87,9
Fujian Dingxin Technology Co., Ltd.	87,9
All other companies	108,4

3.3.   Taiwan

3.3.1.   Preliminary remarks

• (222) As mentioned in recital (24), two exporting producers in Taiwan, Yusco Group and Walsin, cooperated with the investigation by providing a questionnaire reply. No other exporting producers in Taiwan were identified or came forward.

• (223) In addition, as also indicated in recital (24), the unrelated service centre YC Inox cooperated with the investigation by providing a questionnaire reply. This company was not related with the two Taiwanese cooperating producers. Its cooperation enabled the Commission to obtain a sound understanding of the functioning of the Taiwanese domestic and export markets of the product under investigation. In particular, on the basis of the information supplied by this party and the verification thereof, the Commission could draw reasonable conclusions as to the most likely destination of the reported domestic sales of the two cooperating exporting producers.

• (224) Yusco Group’s domestic sales of the like product in the investigation period were made either directly to unrelated customers or indirectly via a related domestic service centre. In both cases, it could be established that some of these sales were eventually destined for export. Yusco Group’s export sales to the Union in the investigation period were made directly to independent customers or indirectly through either a related service centre located in Taiwan or a related trader registered in Hong-Kong but located in Taiwan and the PRC.

• (225) In the case of Walsin, the domestic and export sales of the like product in the investigation period were made directly to unrelated customers.

• (226) The Commission examined the domestic sales reported by Yusco Group and Walsin. Based on the findings during the on-spot verifications in Taiwan, for the transactions where the destination of goods were sea ports or bonded factories ⁸⁵ (i.e. 0 % VAT), or for certain other reported domestic sales and based on explanations given on the spot by the exporting producers or YC Inox, the Commission reclassified these domestic sales as export sales. These transactions were therefore excluded from the domestic sales transactions used for the calculation of the normal value.

3.3.2.   Normal value

• (227) The Commission first examined whether the total volume of domestic sales for each investigated exporting producer 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.

• (228) On this basis, the total volume of domestic sales of the product under investigation by Yusco Group and Walsin on the domestic market was found to be representative.

• (229) 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 investigated exporting producers with representative domestic sales.

• (230) The Commission then examined whether the product types sold by the exporting producers on their domestic market compared with product types 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.

• (231) 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.

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

• (a) 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

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

• (233) 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.

• (234) 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:

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

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

• (235) For those product types with no or insufficient sales in the domestic market, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

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

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

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

• (237) 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, or where no sales were found in the ordinary course of trade, the weighted average SG&A expenses and profit of all transactions made in the ordinary course of trade on the domestic market were added.

3.3.3.   Export price

• (238) The exporting producers exported to the Union either directly to independent customers or through related companies.

• (239) The export price was, thus, 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.

3.3.4.   Comparison

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

• (241) 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 prices comparability, in accordance with to Article 2(10) of the basic Regulation.

• (242) Adjustments were made where appropriate for transport, insurance, handling, loading and ancillary costs, packing fees, credit cost, bank charges, commissions and SG&A.

3.3.5.   Dumping margins

• (243) For the 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.

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

Company	Provisional dumping margin
Yieh United Steel Co. and Tang Eng Iron Works Co. Ltd.	6,0 %
Walsin Lihwa Co.	7,5 %
All other companies	7,5 %

• (245) The level of cooperation in this case was considered high and no other exporting producers could be identified. Consequently, the Commission considered it representative to set the residual dumping margin at the level of the exporting producer with the highest dumping margin.

4. INJURY

4.1.   Definition of the Union industry and Union production

• (246) The like product was manufactured by five known (groups of) producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (247) The total Union production during the investigation period was established at around 4,6 million tonnes, including production for the captive market. The Commission established this figure on the basis of all the available information concerning the Union industry, namely the verified questionnaire reply received from Eurofer, where possible cross-checked with the verified questionnaire replies of the sampled Union producers.

• (248) As indicated in recital (7), three Union producers were selected in the sample, representing over 78 % of total Union production of the like product. They are all vertically-integrated producers.

4.2.   Determination of the relevant Union market

• (249) To establish whether the Union industry suffered injury and to determine consumption and the various economic indicators related to the situation of the Union industry, the Commission examined whether and to what extent the subsequent use of the Union industry’s production of the like product had to be taken into account in the analysis.

• (250) The Union industry is vertically integrated and SSHR is regarded as an intermediate material for the production of various value added downstream products, namely cold rolled products. The Commission found that a substantial part of the total Union producers’ production was destined for captive use.

• (251) The distinction between captive and free market is most relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports, as they are sold within the same company or groups of companies on the basis of transfer prices set according to internal price policies thus not directly linked to prices on the free market.

• (252) By contrast, production destined for free market sales is in direct competition with imports of the product concerned, and is sold at free market prices.

• (253) To provide a picture of the Union industry that is as complete as possible, the Commission requested data for the entire activity of SSHR and verified whether the production was destined for captive use or for the free market.

• (254) The Commission examined certain economic indicators relating to the Union industry on the basis of data for the free market only. These indicators are: sales volume and sales prices on the Union market; market share; export volume and prices; and profitability. Where possible and appropriate, the findings of the examination were compared with data for the captive market in order to provide a complete picture of the situation of the Union industry.

• (255) However, other economic indicators could meaningfully be examined only by referring to the whole SSHR activity, including the captive use of the Union industry. These are: production; capacity and capacity utilisation; investments; stocks; employment; productivity; and wages. This is because they depend on the whole production activity, whether SSHR is kept for captive use or sold on the free market.

4.3.   Union consumption

4.3.1.   Free market consumption on the Union market

• (256) The Commission established Union consumption on the basis of: (a) Eurofer data concerning Union industry’s sales of the like product to unrelated customers in the Union, whether direct or indirect sales, cross-checked with the sampled Union producers; and (b) imports of the product under investigation into the Union from all third countries as reported in Eurostat.

• (257) The Union consumption on the free market over the period considered developed as follows:

Table 2

Free consumption on the Union market (tonnes)

	2016	2017	2018	IP
Free Union consumption	1 221 444	1 213 398	1 205 651	1 219 231
Index	100	99	99	100
Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.

• (258) During the period considered, Union consumption remained stable.

4.3.2.   Captive consumption on the Union market

• (259) The Commission established the Union captive consumption on the basis of the captive use of all known producers in the Union. On this basis, the Union captive consumption over the period considered developed as follows:

Table 3

Captive consumption on the Union market (tonnes)

	2016	2017	2018	IP
Captive Union consumption	3 627 275	3 741 880	3 703 555	3 607 752
Index	100	103	102	99
Source: Eurofer.	Source: Eurofer.	Source: Eurofer.	Source: Eurofer.	Source: Eurofer.

• (260) Captive consumption on the Union market remained rather stable with some minor fluctuations over the period considered, and decreased by less than 1 % in the investigation period.

4.3.3.   Overall consumption

• (261) By merging the two previous tables, the overall consumption – thus totalling the captive and free market consumption – evolved as follows during the period considered:

Table 4

Overall consumption (captive and free market) (tonnes)

	2016	2017	2018	IP
Overall Union consumption	4 848 718	4 955 278	4 909 206	4 826 983
Index	100	102	101	100
Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.	Source: Eurofer, sampled Union producers and Eurostat.

• (262) The above table shows that overall consumption followed the same trend as observed in free market consumption and in captive consumption, thus remaining stable over the period considered. Overall consumption was also in line with total Union production (see table 7).

4.4.   Imports from the countries concerned

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

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

• (264) That provision stipulates that the imports from more than one country shall be cumulatively assessed only if it is determined that:

• (a) the margin of dumping established in relation to the imports from each country is more than de minimis as defined in Article 9(3), and the volume of imports from each country is not negligible; and

• (b) a cumulative assessment of the effects of the imports is appropriate in light of the conditions of competition between imported products and the like Union product.

• (265) The margins of dumping established in relation to the imports from each of the three countries concerned are summarised under recitals (91), (218) and (241). They are all above the de minimis threshold laid down in Article 9(3) of the basic Regulation.

• (266) The volume of imports from each of the three countries concerned was not negligible. Imports market shares in comparison with free market consumption in the investigation period were 18,3 % for the PRC, 9,1 % for Indonesia and 3,0 % for Taiwan.

• (267) The condition of competition between the dumped imports from each of the three countries concerned, and between them and the Union like product were similar. Indeed, SSHR originating in Indonesia, the PRC and Taiwan competed with each other when imported for sale on the Union market, and with the like product produced by the Union industry, as all of them are sold to similar categories of customers.

• (268) In its submission at initiation, STSS claimed that imports from the PRC should not be cumulated in view of their different development in terms of volume and prices. It claimed that imports from the PRC decreased gradually over the period considered while prices increased, particularly in 2017.

• (269) While it is true that Chinese imports prices increased over the period considered, they were at levels well below the Union industry’s sales prices throughout the period considered. Chinese import volumes also increased significantly, and their market share was above 16 % throughout the whole period. The investigation has shown that imports from the countries concerned compete with each other in the light of Article 3(4)(b) of the basic Regulation. The import volumes from the PRC decreased from 2017 until the investigation period (see table 5: from index 135 in 2017 to 129 in 2018 to 114 in the investigation period). At the same time, import volumes from Indonesia sharply increased (from index 16 to 42 726 to 106 202). In absolute figures, the volume increase from Indonesia was greater than the decrease from the PRC from 2017 until the investigation period. Import volumes from Taiwan increased steadily from 2017 to 2018 but then fell in the investigation period (from index 137 to 173 to 128). Overall, imports from the countries concerned taken together continuously increased over the period considered (from index 100 in 2016 over 136 in 2017 and 156 in 2018 to 166 in the investigation period).

• (270) Therefore, and contrary to the claim by STSS, 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 injury determination.

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

• (271) The Commission established the volume of imports on the basis of Eurostat data. The market share of imports was established by comparing the volume of imports with the Union free market consumption.

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

Table 5

Import volumes (tonnes) and market share

	2016	2017	2018	IP
PRC	194 962	263 858	250 633	222 802
Index	100	135	129	114
Market share	16,0 %	21,7 %	20,8 %	18,3 %
Index	100	136	130	114
Indonesia	105	17	44 863	111 512
Index	100	16	42 726	106 202
Market share	0,0 %86	0,0 %87	3,7 %	9,1 %
Index	100	100 88	43 286	106 395
Taiwan	28 992	39 739	50 058	36 910
Index	100	137	173	127
Market share	2,4 %	3,3 %	4,2 %	3,0 %
Index	100	138	175	128
Total countries concerned	224 059	303 613	345 554	371 224
Index	100	136	154	166
Market share	18,3 %	25,0 %	28,7 %	30,4 %
Index	100	136	156	166
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (273) Imports from the countries concerned increased by 66 % over the period considered, reaching over 30 % of the Union free market consumption in the investigation period.

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

• (274) 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 6

Prices of the imports from the countries concerned (EUR/tonne)

	2016	2017	2018	IP
PRC	1 503	1 827	1 826	1 820
Index	100	122	121	121
Indonesia	2 203	2 152	1 688	1 645
Index	100	98	77	75
Taiwan	1 550	1 813	1 954	1 943
Index	100	117	126	125
Total countries concerned	1 510	1 826	1 827	1 780
Index	100	121	121	118
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (275) Whereas import prices from the PRC and Taiwan increased by 21 % and 25 % respectively, however, import prices from Indonesia fell significantly by 25 % over the period considered (import prices from the countries concerned increased on average by 18 %).. Despite the overall increase, import prices from the countries concerned remain constantly lower than Union industry prices over the same period (see Table 11).

• (276) The Commission determined price undercutting during the investigation period by comparing:

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

• (b) the corresponding weighted average prices per product type of imports from the cooperating exporting producers in the countries concerned to the first independent customer on the Union market ⁸⁹, established on a cost, insurance, freight (CIF) basis, with appropriate adjustments for post-importation costs.

• (277) 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 sampled Union producers’ turnover during the investigation period. It showed a weighted average undercutting margin of 10,7 % for imports from Indonesia, 9,3 % for imports from the PRC and 4,1 % for imports from Taiwan.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (278) 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.