Commission Implementing Regulation (EU) 2020/1428 of 12 October 2020 imposing a provisional anti-dumping duty on imports of aluminium extrusions originating in the People’s Republic of China

• (114) For instance, the government plays a key role in the development of the Chinese aluminium sector. This is confirmed in the numerous plans, directives and other documents pertaining directly or indirectly to the sector, which are issued at national, regional and municipal level. Through these and other instruments, the government directs and controls virtually every aspect of the development and functioning of the aluminium sector. Such policies have an important direct or indirect impact on the production costs of aluminium extrusions.

• (115) In line with the Commission’s findings in the case on certain aluminium foil in rolls originating in China ⁴³, the following facts are equally applicable to the present case concerning aluminium extrusions, which is, similarly, an aluminium downstream product:

• (116) Although the 13^th Five Year Plan on Economic and Social Development ⁴⁴ does not contain specific provisions on aluminium, for the non-ferrous metal industry in general it envisages a strategy of promoting cooperation on international production capacity and equipment manufacturing. To achieve these goals, the plan confirms that it will enhance supporting systems related to taxation, finance, insurance, investment and financing platforms, as well as risk assessment platforms ⁴⁵.

• (117) The corresponding sectoral plan, the Non-Ferrous Metal Industry Development Plan (2016-2020) (‘the Plan’) sets out specific policies and targets that the government aims to achieve for a number of non-ferrous metals industries ⁴⁶, including aluminium.

• (118) The Plan aims at upgrading the range of product types produced by the Chinese aluminium industry, inter alia, through supporting innovation. It calls for swift development of the mixed ownership system and a boost to SOE’s vitality. It further provides for the possibility of stock-piling non-ferrous metals, improving the security of resources, including aluminium and sets specific quantitative targets for reducing power consumption, increasing the ratio of recycled aluminium in production and increasing capacity utilisation ⁴⁷.

• (119) The Plan further provides for structural adjustments with stricter control on new smelting facilities and elimination of outdated capacity. It provides for geographical distribution of processing plants, focuses on projects to increase bauxite and alumina resource exploitation and covers electricity supply and pricing policy ⁴⁸.

• (120) With this wide range of measures and policies, the Plan represents a continuation of the 2009 Non-Ferrous Metals Industry Adjustment and Revitalization Plan which was adopted to alleviate the negative effects on the non-ferrous metal industry of the financial crisis. The key objectives, set out in the plan include inter alia, production volume control, restructuration, raw material sourcing, export tax policy, security of resources, stockpiling, technological innovation, financial policy and planning and implementation ⁴⁹.

• (121) Another policy document targeting the aluminium sector is the Standard Conditions applicable to the Aluminium Industry issued by MIIT on 18 July 2013, in order to speed up structural adjustment and curb disorderly expansion of the aluminium smelting capacities. The Standard Conditions introduce minimum production quantities for new plants, quality standards and security of supply for imported and domestically sourced bauxite and alumina. The Standard Conditions indicate that MIIT is the authority in charge of the standardisation and management of the aluminium industry, as well as of the publication of the list of companies authorised to operate in the aluminium industry ⁵⁰.

• (122) In the Guiding Opinion on creating an excellent market environment, fostering the non-ferrous metal industry’s structural adjustment and transformation and increasing benefits issued by the General Office of the State Council in 2016 (2016/42) ⁵¹, the Chinese authorities state as main objectives to ‘optimise the non-ferrous metal industry structure; Basically balance supply and demand of key product categories; Maintain the utilisation rate of electrolytic aluminium production capacity above 80 %; Significantly increase the mineral resources supply security capacity for minerals such as copper and aluminium’ ⁵². The document also prescribes to ‘strictly control new production capacity.’ To achieve this, the State requires to: ‘Ensure the implementation of indispensable electrolytic aluminium new (reformed, expanded) construction projects; […] Use social supervision and other tools; Step up supervision and inspection efforts; Strictly investigate and deal with new electrolytic aluminium projects breaching regulations’ ⁵³. These provisions demonstrate the substantial degree of the GOC’s intervention into the non-ferrous metals sector, including the aluminium sector.

• (123) The above State interference in the functioning of the aluminium sector by means of planning documents is reflected also at the provincial level. For example, the Shandong Province Government’s Notice on the implementation plan for accelerating the high-quality development of the seven energy-intensive industries (2018/248) of 6 November 2018 requires to ‘foster the extension of the electrolytic aluminium industry chain’ through the following actions: ‘Further increase the proportion of fine and deep processing of electrolytic aluminium liquid and aluminium processing materials; Speed up and foster the extension of the aluminium industry chain to finished products and high-end products; Expand the use of high-end aluminium materials; Increase the development possibilities of the aluminium processing industry’ ⁵⁴.

• (124) As established by the Commission in its Report, the State has been intervening into the functioning of the aluminium sector for many years before the issuance of the above policy documents, which is, for example, illustrated by the Guidelines for Accelerating the Restructuring of the Aluminium Industry (‘Restructuring Guidelines’) ⁵⁵, issued by the NDRC in April 2006. The latter regarded aluminium as a fundamental product in the development of the national economy. The said Restructuring Guidelines stated that, in implementing the Industrial Development Policy approved by the State Council, specific objectives shall be achieved in certain areas. These areas were: Enhance the concentration in the industry; Access to financial capital (see also section 3.2.1.8 below); Organisation of the industry; Strict control of exports of electrolytic aluminium; and Elimination of outdated capacity.

• (125) Moreover, the Commission found that the Chinese State has been interfering with the free play of market forces in the sector of upstream aluminium products, hence in the production of inputs and of inputs to inputs, which are used by the producers of the product concerned. In that regard, for example, the Notice on fostering the orderly development of the Alumina Industry (2018/1655) issued on 28 December 2018 by the General Office of the MIIT ⁵⁶ stipulates – concerning alumina (a key input in the production of primary aluminium) – that ‘guided by Xi Jinping’s socialist ideology with Chinese characteristics in a new era, [all relevant parties shall] comprehensively and thoroughly implement the spirit of the 19^th National Congress of the Party; stick to the general orientation of stability in progress work; stick to the new development concept; focus on supply-side structural reforms; make full use of the market’s decisive role in allocating resources, better involve the government, […] meet domestic development needs, and promote the orderly and healthy development of the alumina industry’ ⁵⁷. The same document states that ‘the provincial Development and Reform Commissions and MIIT administrations shall: keep abreast of the current developments in the alumina industry in their region; combine their region’s economic and social development, industry base, market demand and energy consumption and environmental capacity; strengthen the scientific planning for the development of the alumina industry; coordinate their region’s industry development scale and layout; ensure project demonstrations; strictly implement the construction requirements; orderly support project constructions; strengthen the supervision of the entire process; ensure the industry development scale matches the domestic market demand and local bearing capacity; prevent projects construction rush’ ⁵⁸. In order to achieve the latter, the document prescribes to strengthen supervision and inspection: ‘In accordance with the present notice’s requirements the National Development and Reform Commission, the Ministry of Industry and Information Technology, together with the China Nonferrous Metals Industry Association and other relevant parties shall proceed to inspections of alumina construction projects in the form of letters of enquiries, research and random investigations. Should problems arise, they shall be strictly dealt with in accordance with the relevant regulations’ ⁵⁹. The provisions described above show the degree of State intervention and control in the Chinese market of alumina – a key input to in the production of primary aluminium, which is the raw material used by aluminium extrusions producers.

• (126) Another input in the production of the product concerned is electricity, which constitutes 2 %–3 % of the production cost of aluminium extrusions. In this regard, the Commission found evidence of State-induced distortions affecting the price of electricity provided to Chinese aluminium producers. Notably, it was established that the State intervened in favour of Chinese producers through differentiated, more advantageous energy pricing. In the Guiding Opinion on creating an excellent market environment, fostering the non-ferrous metal industry’s structural adjustment and transformation and increasing benefits mentioned above, the Chinese authorities acknowledged as a policy goal to ‘continue to implement the differentiated electricity price policy; Encourage eligible electricity users to conclude direct deals with power generation companies; Determine prices through negotiation’ ⁶⁰. The Commission also established that similar policies were implemented at the provincial level. For example, in the Yunnan Province, according to information reported by the China Industry Journal in November 2019: ‘In order to implement the plan, Yunnan has successively issued specific policies such as the “Implementing Opinion on Promoting the Integrated Development of Hydropower and Aluminium Materials” and the “Plan implementing preferential prices to promote the use of Hydropower”. It appears clearly that any enterprise bringing its capacity quota to Yunnan shall benefit from the “preferential price, full transmission” policy, which means that for the first 5 years, electrolytic aluminium shall benefit from special preferential electricity price of RMB 0,25 per kWh. As to deep processing of materials, a special preferential electricity price of RMB 0,20 per kWh shall be granted. According to reports, the integrated projects of Henan Shenhuo and Sichuan Qiya’s bringing quotas to be built in Yunnan have already benefitted from the policy for integration projects and have signed relevant agreements with local governments, power grid companies, and power generation companies’ ⁶¹.

• (127) As another example of State interference, at the provincial level, in the already mentioned Shandong Province Government’s Notice on the implementation plan for accelerating the high-quality development of the seven energy-intensive industries, the authorities have issued transformation and upgrading targets for the electrolytic aluminium industry with regard to energy use: ‘By 2022, the electricity consumption of electrolytic aluminium per ton of aluminium shall drop to approximately 12,800 kWh, the electrolytic deep processing rate of electrolytic aluminium in the province shall reach approximately 50 %, and the added value of aluminium per ton shall increase by more than 30 % on average’ ⁶².

• (128) With respect to the enforcement of the provisions contained in the planning documents above, Chinese industry associations play an important role. These entities are to guarantee that industry implements the policies of the GOC. This responsibility is confirmed by the fact that in their activity, they liaise closely with State authorities, which is reflected in their statutes. In the case of the aluminium sector, the Articles of association of the China Non-Ferrous Metals Industry Association assert notably that ‘[t]he Association adheres to the party’s basic line and various principles and policies, abides by the Constitution, laws, regulations and national policies, and abides by social and moral values. It shall stick to the purpose of serving the government, the industry, the enterprises and business managers; it shall set up and improve the industry self-discipline mechanism; it shall fully involve government’s staff to get assistance; it shall play a bridging role between the government and enterprises.’ (Article 3). Along the same lines, Article 25 states that the Association’s chairman, vice-chairman and secretary general must fulfil as a first condition to: ‘Adhere to the party’s line, principles and policies, and have good political qualities’ ⁶³.

• (129) Similarly, the Articles of association of the China Non-Ferrous Fabrication Industry Association stipulate that ‘the Association accepts business guidance as well as supervision and management from the State-owned Assets Supervision and Administration Commission of the State Council, the Ministry of Civil Affairs and the China Nonferrous Metals Industry Association’ (Article 4). One of the established elements of the Association’s business scope is also to ‘Actively put forward suggestions and opinions on industry development, industry policies, laws and regulations, in accordance with the Party’s and the State’s general principles and tasks concerning the building of a socialist market economy system and taking into account the industry’s actual situation.’ (Article 6). Finally, Article 22 also prescribes that the Association’s chairman, deputy chairman and secretary general must, among others, meet as condition to: ‘Adhere to the party’s line, principles and policies, and have good political qualities’ ⁶⁴.

• (130) Thus, the numerous plans, directives and other documents pertaining to aluminium, issued at the national, regional and municipal level, clearly show the high degree of intervention of the Chinese government in the aluminium sector ⁶⁵. Through these and other instruments, the government directs and controls virtually every aspect of the development and functioning of the sector.

• (131) Beyond the plans, the government’s intervention in the sector has taken the form, inter alia, of export-related measures, including export duties, export quotas, export performance requirements and minimum export price requirements on different raw materials for aluminium.

• (132) The GOC further discourages exports of primary aluminium and its inputs, aiming at promoting higher added-value aluminium products. This objective is pursued by granting full or partial VAT rebates on downstream aluminium products in combination with incomplete VAT rebates and export taxes on primary aluminium ⁶⁶.

• (133) As found by the Commission (see recital (126)), the prices of key inputs such as energy and electricity are influenced by different types of government intervention ⁶⁷. Other types of government intervention leading to market distortions include the stockpiling policy through the State Reserve Bureau and the role of the Shanghai Futures Exchange (SHFE) ⁶⁸. In addition, several trade defence investigations have established that the Chinese government has consistently granted different types of State support measures to aluminium producers ⁶⁹. The extensive intervention of the GOC in the aluminium sector has led to overcapacity ⁷⁰, which is arguably the clearest illustration of the implications of the GOC's policies and the resulting distortions.

• (134) The OECD Study also identified additional government support influencing market forces in the aluminium sector. Such support would typically take the form of inputs, in particular electricity and primary alumina, sold at below-market prices ⁷¹. The OECD Study further describes how the GOC objectives for the aluminium sector are translated into industrial policies and specific actions on the provincial and local level, including for example capital injections, priority possession rights to mineral resources, governmental grants and subsidies or tax incentives ⁷².

• (135) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting key industries, including the aluminium sector, which encompasses the production of aluminium extrusions, as well as of primary aluminium – the main raw material used in the manufacturing of the product concerned (more than 50 % of its costs of production). Such measures impede market forces from operating freely.

3.2.1.6.   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

• (136) 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 China, 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 ⁷³.

• (137) In addition, the shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in China ⁷⁴. 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 ⁷⁵. Moreover, authorities often pursue specific political goals including the implementation of the economic plans when allocating land ⁷⁶.

• (138) Much like other sectors in the Chinese economy, producers of aluminium extrusions 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.

• (139) This finding is supported by the provisional affirmative determination of the US Department of Commerce, in the Countervailing Duty Investigation of certain Aluminium Foil from China, which found, using facts available, that the Government of China’s provision of land for Less Than Adequate Remuneration constitutes a financial contribution within the meaning of Section 771 (5)(D) of the Tariff Act of 1930, as amended ⁷⁷.

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

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

• (141) A system of market-based wages cannot fully develop in China as workers and employers are impeded in their rights to collective organisation. China 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 ⁷⁸. 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 ⁷⁹. 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 ⁸⁰. Those findings lead to the distortion of wage costs in China.

• (142) No relevant evidence was submitted to the effect that the aluminium sector, including the producers of aluminium extrusions, would not be subject to the Chinese labour law system described. The aluminium sector is thus affected by the distortions of wage costs both directly (when making the product concerned or the main raw material for its production) as well as indirectly (when having access to capital or inputs from companies subject to the same labour system in China).

3.2.1.8.   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

• (143) Access to capital for corporate actors in China is subject to various distortions.

• (144) Firstly, the Chinese financial system is characterised by the strong position of State-owned banks ⁸¹, 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) ⁸² 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 ⁸³. This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁸⁴.

• (145) 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.

• (146) 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 ⁸⁵.

• (147) This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁸⁶. This results in a bias in favour of 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.

• (148) In this respect, the OECD Study refers to anecdotal evidence that certain aluminium producers in China have obtained financing on preferential terms, with cost of financing being seemingly decoupled from the corresponding level of corporate leverage. According to that study, one state-owned aluminium producer explicitly stated in its 2016 bond prospectus that it attracts considerable financial support from Chinese policy banks bearing interest rate below benchmark. Similarly, the 2017 bond prospectus of another state-owned producer refers to the strong ties which the company maintains with Chinese banks, including policy banks that have provided that company with low-cost financing sources. The OECD Study concludes in this connection that while there can be many reasons why interest rates are low for these firms, the contrast between poor financial indicators and low interest rates may suggest some potential under-pricing of the risk associated with those borrowers ⁸⁷.

• (149) 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.

• (150) Thirdly, although nominal interest rate liberalisation 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 utilisation of capital.

• (151) Overall credit growth in China 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.

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

• (153) No evidence was submitted to the effect that the aluminium sector, including the producers of aluminium extrusions, 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.

3.2.1.9.   Systemic nature of the distortions described

• (154) The Commission noted that the distortions described in the Report are characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above in Sections 3.2.1.1 to 3.2.1.5 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 3.2.1.6 to 3.2.1.8 above and in Part B of the Report.

• (155) The Commission recalls that in order to produce aluminium extrusions, a broad range of inputs is needed. According to evidence on the file, all the sampled exporting producers sourced all their inputs in China. When the Chinese producers of aluminium extrusions purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are 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.

• (156) As a consequence, not only the domestic sales prices of aluminium extrusions 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 affected 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 China. This means, for instance, that an input that in itself was produced in China 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.

3.2.1.10.   Conclusion

• (157) The analysis set out in sections 3.2.1.2 to 3.2.1.9, which includes an examination of all the available evidence relating to China’s intervention in its economy in general as well as in the aluminium sector (including the product concerned) 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.

• (158) 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.

3.3.   Representative country

• (159) The Commission chose the representative country on the basis of the following criteria:

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

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

• — Availability of relevant public data in that country, and

• — 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.

• (160) As explained in recitals (31) to (37), the Commission published two notes to the file on the sources for the determination of the normal value.

• (161) In the Note of 16 March 2020, the Commission provided detailed information concerning the criteria above and identified the following countries as potential representative countries: Brazil, Colombia, Ecuador, Islamic Republic of Iran, Kazakhstan, Malaysia, Mauritius, Mexico, Montenegro, Russian Federation, Serbia, Sri Lanka, Thailand and Turkey. The Commission invited interested parties to submit comments in this regard. The Commission received comments concerning various aspects of the selection of the representative country from exporting producers, Union industry and unrelated importers.

• (162) The Commission then published the Note of 25 June 2020 addressing the comments received and informing interested parties that, on the basis of the criteria listed in recital (159), it intended to use Turkey as the representative country. The Commission invited interested parties to comment.

• (163) An importer submitted that it would be more appropriate to distinguish between soft alloys and hard alloys. Under this distinction, Turkey would be the appropriate representative country for soft alloys, while the Russian Federation would be a more appropriate for hard alloys.

• (164) First, product types are not necessarily determinant for the selection of an appropriate representative country. Second, the investigation revealed that in fact aluminium extrusions made of both type of alloys are produced in Turkey. Finally, as indicated in the Note of 25 June 2020, the Russian Federation was found not to be an appropriate representative country in this case due to export restriction on aluminium ⁸⁸.

• (165) The Commission therefore confirmed that Turkey was the most appropriate representative country in this case.

3.4.   Sources used to establish undistorted costs

• (166) On the basis of the information submitted by interested parties and other relevant information available in the file, the Commission established in Note of 16 March 2020 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.

• (167) The Commission also identified the sources to be used in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation (the Global Trade Atlas (‘GTA’), national statistics, etc). 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.

• (168) In the Note of 25 June 2020, the Commission confirmed that it would use GTA data to establish undistorted cost of the factors of production, including raw materials. The Commission further confirmed that it would use data from the Turkish Statistical Institute as to establish labour costs, electricity costs and gas costs. Finally, the Commission also informed interested parties that, to establish the undistorted SG&A and profit, it would use the financial data of the following companies:

• — Onat Aluminyum Sanayi Ticaret Anonim Sirketi,

• — Okyanus Aluminyum Sanayi Ticaret Anonim Sirketi,

• — Alugen Aluminyum Sanayi Ve Ticaret Anonim Sirketi,

• — Eksal Aluminyum Kalip Sanayi Ve Ticaret Limited Sirketi, and,

• — Gensa Aluminyum Sanayi Ve Ticaret Anonim Sirketi.

• (169) Following the note of 25 June 2020, the complainant submitted that the profit margin on this basis was too low. According to the complainant, the appropriate profit before tax should be of 16 % and not of 7,3 % as identified by the Commission. In the complainant view, this was the profit required considering the very significant continuous investments to ensure asset sustainability over the long term.

• (170) The complainant further added that, in the event the Commission would not accept to use the proposed 16 % profit margin, it should exclude from the calculation of the average profit margin the two Turkish companies, which recorded the lowest profit. According to the complainant this would be appropriate as these two companies did not reach the minimum profit of 6 % required in Article 7(2)(c) of the basic Regulation.

• (171) The Commission rejected this claim. In the Note of 25 June 2020, the Commission explained in detail how the profit to be used in calculations based on the profit of the five Turkish companies listed in recital (168) was established. The Commission has already in that exercise excluded those companies that did not report profit. All profitable companies fulfilling the set criteria were taken into account, irrespective of the their profit level, as long as they were not loss making. This reflects the average profit margin achieved in the representative country during the investigation period. The Commission further noted that Article 7(2c) of the basic Regulation applies in the context of underselling, whereas in this context the Commission seeks to ascertain the undistorted profit in the country of origin.

• (172) The exporting producer, Press Metal Group, submitted that the London Metal Exchange (‘LME’) prices represented a more appropriate undistorted international price for aluminium, compared to GTA data. The exporting producer however indicated that it had reviewed the GTA data for imports into Turkey, included in the Commission’s excel following the Note of 25 June 2020, and found that the GTA data of aluminium products in Turkey were generally in line with those published by LME.

• (173) An importer noted that the source data for various factors of production (labour costs, average profit and SG&A, electricity and gas) was based on information from different years. The Commission clarifies that, when required, the Commission takes that into consideration in its calculation by applying, wherever appropriate, deflators to establish the relevant value for factors of production during the investigation period.

3.5.   Undistorted costs and benchmarks

• (174) 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.

• (175) The Commission did not receive any comments concerning the list of factors of production following the Note of 25 June 2020 where, based on the information received from interested parties, the Commission established a list of all Turkish goods codes corresponding to the factors of production used in the manufacturing of the product concerned.

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

Table

Factors of production and sources of information

Factor of Production	Turkish goods codes	Value	Units
Raw materials	Raw materials	Raw materials	Raw materials
Aluminium (not alloyed, unwrought)	7601 10 00	12,8	CNY/KG
Aluminium alloys (unwrought)	7601 20 20	13,6	CNY/KG
Aluminium scrap	7602 00 90	8,8	CNY/KG
Aluminium bars and rods (not alloyed)	7604 10 10	18,7	CNY/KG
Bars and rods of aluminium alloys	7604 29 10	32,6	CNY/KG
Zinc (minimum 99,99 % of zinc by weight, unwrought)	7901 11 00	18,2	CNY/KG
Zinc alloys	7901 20 00	19,9	CNY/KG
Magnesium (unwrought)	8104 11 00	19,0	CNY/KG
Titanium (unwrought)	8108 20 00	942,5	CNY/KG
Titanium (other) -Bars, rods, profiles and wire	8108 90 30	371,3	CNY/KG
Titanium (other) – Plates, sheets, strip and foil	8108 90 50	430,3	CNY/KG
Titanium (other) – Tubes and pipes	8108 90 60	2 504,3	CNY/KG
Titanium (other) – other	8108 90 90	1 286,1	CNY/KG
Zirconium (unwrought)	8109 20 00	2 012,7	CNY/KG
Manganese (waste and scrap)	8111 00 19	n/a	CNY/KG
Manganese (other)	8111 00 90	n/a	CNY/KG
Chromium alloys containing more than 10 % by weight of nickel	8112 21 10	3 653,0	CNY/KG
Copper (precipitated)	7401 00 00	1,9	CNY/KG
Articles of copper (other)	7419 99 90	188,7	CNY/KG
Iron oxides and hydroxides	2821 10 00	10,9	CNY/KG
Silicon (minimum. 99,99 % of silicon by weight)	2804 61 00	2 365,6	CNY/KG
Silicon (other)	2804 69 00	16,3	CNY/KG
Sulphuric acid	2807 00 00	0,4	CNY/KG
Nitric acid	2808 00 00	23,0	CNY/KG
Phosphoric acid	2809 20 00	5,3	CNY/KG
Sodium hydroxide	2815 11 00	3,2	CNY/KG
Refining agent (anionic)	3402 11 00	n/a	CNY/KG
Energy	Energy	Energy	Energy
Electricity	2716 00 00	0,6	CNY/KWh
Natural gas	2711 11 00	2,1	CNY/m3
Mineral fuel – oil	2710 19 25	6,5	CNY/KG
Water	2201 90 00	7,6	CNY/m3
Labour	Labour	Labour	Labour
Direct and indirect wages in the manufacturing sector	N/A	43,0	CNY/h
By-product / waste	By-product / waste	By-product / waste	By-product / waste
Aluminium scrap	7602 00 90	8,8	CNY/KG

3.5.1.   Raw materials

• (177) For all raw materials and auxiliary materials, 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 China. The Commission decided to exclude imports from China into the representative country 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 these prices. Similarly, import data on imports in the representative country from non-WTO members listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and of the Council ⁸⁹ were also excluded. After excluding those imports, the imports from other third countries remained representative, at 97 % on average of total volumes imported to Turkey for the factors of production listed in the Table above.

• (178) In order to establish the undistorted price of raw materials, as provided by Article 2(6a)(a), first indent of the basic Regulation, the Commission applied the relevant import duties 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 domestic transport costs for all raw materials were based on the verified data provided by the sampled exporting producers.

• (179) For raw materials with negligible impact in terms of costs, which the companies did not report in Annex III of the Notice of Initiation, such costs were included in the manufacturing overheads as explained in recital (189). The factors of production moved to overheads were listed in the company-specific disclosures.

3.5.2.   Labour

• (180) To establish the benchmark for labour costs, as indicated in the Note of 25 June 2020, the Commission used the statistics from the Turkish Statistical Institute.

• (181) With regard to labour costs, in the Note of 25 June 2020 the Commission indicated that it intended to use the hourly labour costs in the manufacturing sector for 2016, for the economic activity C.24 (manufacture of basic metals ⁹⁰). This activity corresponds best to the identified NACE Rev.2 ⁹¹ and NAICS ⁹² codes and the code reported by the selected Turkish companies. These are the most recent statistics available ⁹³. The values were properly adjusted using as deflator the domestic producer price index ⁹⁴ published by the Turkish statistical institute.

3.5.3.   Energy inputs

• (182) To establish the benchmark for electricity and gas costs, the Commission used the statistics from the Turkish Statistical Institute.

• (183) With regard to electricity, in the Note of 25 June 2020 the Commission indicated that it intended to apply the average electricity unit price for industrial users, provided in a press release issued by the Turkish statistical institute ⁹⁵. With regard to gas costs the Commission indicated that it intended to apply the average gas unit price for industrial users, provided in the same press release. For both, electricity and gas, the Commission deducted the VAT and reduced the prices to the net level. In the absence of any comments, the Commission adopted this approach.

• (184) With regard to diesel prices, the Commission applied the average diesel price for the industrial sector in Turkey from OECD sources ⁹⁶.

3.6.   Manufacturing overheads costs, SG&A and profits

• (185) According to Article 2(6a)(a) of the basic Regulation, the constructed normal value should include an undistorted and reasonable amount for administrative, selling and general costs (‘SG&A’) and for profits. In addition, a value for manufacturing overhead costs needed to be established to cover costs not included in the factors of production. In the Note of 25 June 2020, the Commission identified five Turkish companies, listed in recital (168).

• (186) In order to establish an undistorted value of SG&A and profits, the Commission used the proportion of the cost of manufacturing that SG&A represent in the cost structure of these five Turkish companies. The Commission used the figures as reported in the Orbis database for the period 1 January 2018 to 31 December 2018. The Commission made this data available to interested parties as an attachment to the Note of 25 June 2020.

3.7.   Calculation of the Normal Value

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

• (188) First, the Commission established the undistorted costs of manufacturing (covering the consumption of raw materials, labour and energy). 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 and verified by the Commission.

• (189) Second, to arrive at the undistorted costs of production, the Commission added manufacturing overheads. Manufacturing overheads incurred by the cooperating exporting producers were increased by the costs of raw materials and auxiliary materials referred to in recital (179) and subsequently expressed as a share of the costs of manufacturing actually incurred by each of the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

• (190) Finally, to the above calculation the Commission applied the SG&A and the weighted average profit of five Turkish companies as explained in recital (186) above.

• (191) The SG&A expressed as a percentage of the costs of manufacturing and applied to the undistorted costs of manufacturing amounted to 15,16 %.

• (192) The profit expressed as a percentage of the costs of manufacturing and applied to the undistorted costs of manufacturing amounted to 9,07 %, which is higher than the profit margin expressed as a percentage of the revenues in recital (169).

• (193) 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. The Commission constructed the normal value per product type for the two cooperating sampled exporting producers.

3.8.   Export price

• (194) The cooperating exporting producers exported to the Union in three different ways: directly to independent customers, through a related importer in the Union or through a related company acting as a trader.

• (195) For direct sales or sales through a related trader 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.

• (196) For the export sales through a related company acting as an importer, the export price was established based on 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. For these sales, the Commission adjusted the price for all costs incurred between importation and resale, including SG&A expenses, and for profits accruing.

3.9.   Comparison

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

• (198) 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 to the export price were made for transport, insurance, handling and loading, credit costs, bank charges, other import charges, year-end rebates and the commission of the unrelated trader in a third country.

• (199) The Commission also made an adjustment under Article 2(10)(b) of the basic Regulation for the difference in indirect taxes between export sales from China to the Union and the normal value where indirect taxes such as VAT have been excluded. The investigation concluded that in China the exporting producers incur a VAT liability of 17 % at exportation while 0 % (bars and rods) or 13 % (other aluminium extrusions) is refunded. Therefore, the difference in the indirect taxation, in this case the VAT that is partially refunded with regard to export sales, was adjusted in the normal value.

• (200) In addition, the Commission adjusted export price of one exporting producer related to the trader in the third country in accordance with article 2(10)(i) of the basic Regulation. The adjustment amounted to commission comprising of agent’s fees recorded in trader’s SG&A, remainder of the trader’s SG&A and profit.

3.10.   Dumping margins

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

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

Company	Provisional anti-dumping duty
Haomei Group: — Guangdong Haomei New Materials Co., Ltd., — Guangdong King Metal Light Alloy Technology Co., Ltd.	30,4  %
PMI Group: — Press Metal International Ltd., — Press Metal International Technology Ltd.	38,2  %

• (203) For the cooperating exporting producers not included in the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. This margin was calculated as a weighted average on the basis of the margins established for the sampled exporting producers.

• (204) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 34,9 %.

• (205) For all other exporting producers in China, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation was established considering the volume of exports of the cooperating exporting producers to the Union and the total export volume imports – as reported in Eurostat import statistics – from China into the Union.

• (206) The level of cooperation in this case was considered low because the imports of the cooperating exporting producers constituted around 48 % of the total exports to the Union during the investigation period. In addition, an exporting producer deliberately did not cooperate by not replying to the questionnaire, despite agreeing to be included in the sample. On this basis, the Commission considered it appropriate to base the residual dumping margin at the level of 48,0 %. This margin was set at the level of the highest dumping margin established on the basis of the data of the cooperating exporting producers.

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

Company	Provisional anti-dumping margin
Haomei Group: — Guangdong Haomei New Materials Co., Ltd., — Guangdong King Metal Light Alloy Technology Co., Ltd.	30,4  %
PMI Group: — Press Metal International Ltd., — Press Metal International Technology Ltd.	38,2  %
Other cooperating companies	34,9  %
All other companies	48,0  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (208) The like product was manufactured by around 200 producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (209) The total Union production during the investigation period was established at around 3,3 million tonnes. The Commission established the figure on the basis of the Union production data of European Aluminium, which was cross-checked for reliability and completeness with information supplied by Union producers including the data of the sampled Union producers.

4.2.   Determination of the relevant Union market

• (210) 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.

• (211) To provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire aluminium extrusions activity and determined whether the production was destined for captive use or for the free market.

• (212) The Commission found that a very small part of the total Union producers’ production was destined for captive use as shown in Table 1 below. The captive market was stable at only around 2 % of consumption. Where appropriate, the figures for the small captive market are shown, and included in the overall assessment of that indicator. For other indicators, such as production, capacity, productivity, employment and wages, the figures quoted below relate to the whole activity and no separation of figures is appropriate.

• (213) Fuyao Glass argued that, if not excluded from the product scope, the end-use application of aluminium extrusions for automobile decorative use, should be taken into consideration in all aspects of the investigation, including a separate assessment of injury. As explained in recitals (43) to (47), these extrustions have the same basic physical, technical and chemical characteristics as those for other uses and therefore belong to the product concerned, and the assessment of injury is made for the Union industry as a whole. This claim was therefore dismissed.

4.3.   Union consumption

• (214) The Commission established the Union consumption as mentioned at recital (209) on the basis of European Aluminium data for sales on the Union market plus import data from Eurostat.

• (215) Union consumption developed as follows:

Table 1

Union consumption (tonnes)

	2016	2017	2018	Investigation period
Total Union consumption	3 078 972	3 315 536	3 409 292	3 284 766
Index	100	108	111	107
Captive market	61 338	60 455	60 143	56 640
Index	100	99	98	92
Free market consumption	3 017 634	3 255 081	3 349 149	3 228 126
Index	100	108	111	107
Source: European Aluminium and Eurostat	Source: European Aluminium and Eurostat	Source: European Aluminium and Eurostat	Source: European Aluminium and Eurostat	Source: European Aluminium and Eurostat

• (216) The free market consumption in the Union increased by 7 % during the period considered. A detailed analysis shows that from 2016 to 2018 the Union market increased by 11 % from around 3,0 to 3,3 million tonnes and in 2019 it fell by 4 percentage points to around 3,2 million tonnes. The fluctuation and overall increase over the period considered was due to the growth in certain user sectors such as automotive.

4.4.   Imports from the country concerned

4.4.1.   Volume and market share of the imports from the country concerned

• (217) The Commission established the volume of imports on the basis of Eurostat data. The product concerned is mainly imported to the Union market under the following CN codes: 7604 21 00 (hollow profiles), 7604 29 10 (bars and rods), 7604 29 90 (solid profiles), 7608 20 81 and 7608 20 89 (2 types of pipes and tubes, not welded) and 7610 90 90. The latter code covers various structures of aluminium, parts of structures and assembly kits of aluminium (all of which are not the product concerned), plus some types of the product concerned including bars, rods and profiles.

• (218) In the complaint, imports of the product concerned were calculated using all imports of the first 5 codes mentioned above plus 95 % of CN code 7610 90 90 for imports originating in China only. The justification for this methodology is that imports of code 7610 90 90 from China were priced at around 2 900 EUR per tonne in the investigation period which very closely matched the imports from China of the other 5 CN codes. By contrast, imports from other countries were made at an average price of around 6 500 EUR per tonne. This price information suggests that imports from China were the product concerned, whereas for other countries, they were more value added products such as structures, which are not the product concerned. The complainant stated that for reason of prudence 95 % of CN code 7610 90 90 should be counted as the product concerned.

• (219) The Commission investigated the matter initially by examining the trade flows at the level of TARIC codes (10 digit goods codes). This information existed from the date of initiation (14 February 2020). This data supported the complainant’s approach in terms of price. At the same time, a major part of imports from China were being declared under TARIC code 7610909090, which is not the product concerned. The Commission therefore decided to request opinion and data from interested parties in a Note placed on the case file. Also, DG TAXUD and national customs authorities in Member States were contacted to request further data on this code from their records.

• (220) Two unrelated importers and European Aluminium provided certain comments and data following the additional request for information.

• (221) The two unrelated importers indicated that CN code 7610 90 90 should normally include higher value products because the code covers inter alia, aluminium structures. Therefore, the lower than average import prices from China under this code may indicate that a large quantity of unassembled products have been included, to benefit from a lower conventional duty (6 %) in this CN code, than the duty rate for tariff headings 7604 and 7608 (7,5 %).

• (222) European Aluminium argued that imports originating in China under CN code 7610 90 90 are predominantly aluminium extrusions ‘prepared for use in structures’, included in the product scope, because the average price is similar to that for products declared under CN codes 7604 and 7608 (i.e. 2 770 EUR/tonne) and the average price is not in line with that of products declared under CN code 7610 90 90 originating in all other third countries, excluding China, (i.e. 6 000 EUR/tonne) which corresponds to the economic added value of transforming aluminium extrusions into structures.

• (223) Also, the national customs authorities of four Member States and DG TAXUD supplied more detailed information on imports. However, at the provisional stage of the investigation, information from other Member States is pending. It was therefore provisionally decided that the complaint represented the best information available on import volumes, and all data presented and analysed below uses the methodology in the complaint to establish imports to the Union market. However, the Commission again request interested parties to come forward in order that a definitive decision can be made on data which is as complete as possible.

• (224) The market share of the imports was established on the basis of the import volume as compared to the volume of free market consumption shown in Table 1.

• (225) Imports into the Union from the country concerned developed as follows:

Table 2

Import volume (tonnes) and market share

	2016	2017	2018	Investigation period
Volume of imports from the country concerned (tonnes)	209 064	255 347	283 407	309 853
Index	100	122	136	148
Market share on the free market (%)	6,9	7,8	8,5	9,6
Index	100	113	122	139
Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat

• (226) Imports from the country concerned increased from around 210 000 tonnes to around 310 000 tonnes over the period considered, an increase of 48 %.

• (227) The market share of those imports increased from 6,9 % to 9,6 % over the period considered, an increase of 39 %.

4.4.2.   Prices of the imports from the country concerned and price undercutting

• (228) The Commission established the prices of imports on the basis of Eurostat data, using the CN codes and methodology mentioned in recitals (217) to (223).

• (229) The weighted average price of imports into the Union from the country concerned developed as follows:

Table 3

Import prices (EUR/tonne)

	2016	2017	2018	Investigation period
China	2 812	2 733	2 798	2 912
Index	100	97	100	104
Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat

• (230) Import prices from China increased from 2 812 to 2 912 EUR/tonne over the period considered, a rise of 4 %. This development should be seen in the light of the development of world aluminium indices such as the LME quotations for aluminium billets in Table 7. Aluminium billets are the main raw material of the product under investigation. Over the same period the LME price for aluminium billets increased by 10 % as shown in Table 7. During the investigation period, on the basis of the Union average prices in Table 7 below, there was a price difference between the subject imports and the Union prices of around 20 %.

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

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

• (2) the corresponding weighted average prices per product type of the imports from China to the first independent customer on the Union market, established on a cost, insurance, freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs. Where the sale from the Chinese producer to the first independent customer on the Union market was through a related sales company based in the Union, the price of the import was established on a CIF basis, by adjusting the sales price to the first independent customer taking into account all costs incurred between the importation and resale, including the SG&A of the related importer and for profits accruing based on the weighted average profit margin during the investigation period reported by the sampled unrelated importers, in accordance with article 2(9) of the basic Regulation;

• (232) 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 over 25 %. The actual figures calculated are not recorded here for reasons of confidentiality but have been disclosed to the co-operating exporting producers concerned and are withing the range between 15 % to 35 % Around 99 % by volume of the product types imported were found to be undercutting. All sales of the sampled Union producers were made directly to independent customers, without related selling entities. One exporting producer sold to independent customers in the Union, without related selling entities in the Union. As regards the other exporting producer, the majority of its sales were made through a related selling entity in the Union. In any event, since less than half of the total exports of the sampled exporting companies were adjusted pursuant to Article 2(9), the Commission considered that there would be significant undercutting for the country as a whole, also in view of the observed price differences mentioned in recital (230).

• (233) One importer (Kastens and Knauer) claimed that the product under investigation include both low priced, standard and high-priced, non-standard products, which should not be compared with each other. According to this importer these products should not be compared.

• (234) As mentioned a very detailed system of price comparison was used involving product forms and dimensions, various types of finishing and type of raw material alloy. A high degree of matching was found between imported products and those of the Union industry. Therefore, the Commission confirms that accurate price comparisons were possible, based on detailed and objective criteria.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (235) 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.

• (236) As mentioned in recital (9), the Commission used sampling for the determination of possible injury suffered by the Union industry.

• (237) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the response of European Aluminium which included data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

• (238) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.

• (239) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

4.6.   Macroeconomic indicators

4.6.1.   Production, production capacity and capacity utilisation

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

Table 4

Production, production capacity and capacity utilisation