Commission Implementing Regulation (EU) 2021/9 of 6 January 2021 imposing a provisional anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Turkey

THE EUROPEAN COMMISSION,

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

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

After consulting the Member States,

Whereas:

(1) On 14 May 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel (‘HRFS’ or ‘the product under investigation’) originating in Turkey (‘the country concerned’) on the basis of Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the Council (‘the basic Regulation’). It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 31 March 2020 by Eurofer (‘the complainant’) on behalf of Union producers representing more than 25 % of the total Union production of the product under investigation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) On 12 June 2020, the Commission initiated an anti-subsidy investigation with regard to imports of the same product originating in Turkey and commenced a separate investigation. It published a Notice of Initiation in the Official Journal of the European Union (3).

(4) Following a request by the complainant supported by the required evidence, the Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2020/1686 (4) (‘the registration Regulation’) under Article 14(5) of the basic Regulation.

(5) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the Turkish authorities, known importers, users, as well as associations known to be concerned by the initiation of the investigation and invited them to participate.

(6) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. The Commission held hearings with several users and with representatives of the Turkish exporting producers at initiation stage.

(7) In its Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

(8) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of production and Union sales volumes reported by the Union producers in the context of the pre-initiation standing assessment analysis, taking also into account their geographical location. This sample consisted of three Union producers, located in three different Member States, which accounted for ca. 34 % of the estimated total Union production and over 40 % of the Union sales volume of the producers that came forward. The Commission invited interested parties to comment on the provisional sample.

(9) Only the exporting producer Çolakoğlu Metalurji A.Ş. (‘Colakoglu’) submitted comments within the deadline. Colakoglu claimed that the proposed sample of Union producers is not representative because (i) the companies included in the sample do not represent the largest volume of production nor the largest volume of sales in the Union; (ii) the proposed sample is too small; (iii) it does not ensure a geographical spread; and (iv) the sample is deliberately including “parties that were already in a seemingly unsatisfactory situation due to external circumstances.” Colakoglu thus proposed adding ArcelorMittal Spain, ArcelorMittal Belgium and Acciaieria Arvedi SPA in Italy to the sample.

(10) With regard to the first claim, as mentioned in the note to the file t120.003571, the Commission based its sample on the largest volumes of product and sales in the Union. The fact that certain other producers had high maximum values in the volume provided in ranges in the open version of their standing replies does not mean that they effectively produced and/or sold more.

(11) Secondly, the Commission considers that a sample which accounts for ca. 34 % of the estimated total Union production and over 40 % of the Union sales volume of the producers that came forward is sufficiently representative. The examples provided by Colakoglu of cases where the Commission decided to sample more parties fell under a framework where the Commission could afford longer deadlines. Having more Union producers under the sample would be unduly burdensome and would prevent completion of the investigation in good time.

(12) Thirdly, the Commission considered that the sample represents a good geographical spread as the three sampled parties are located in three different Member States.

(13) Finally, Colakoglu’s last claim was not backed by evidence. As explained above, the criteria used for selecting the sample were the volumes of production and sales in the Union as well as geographical representativity.

(14) In view of the above considerations, the Commission considered Colakoglu’s comments on the representativeness of the sample unwarranted. The provisional sample consisting of three Union producers was thus considered to be representative of the Union industry and was confirmed as the final sample.

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

(16) One unrelated importer provided the requested information and agreed to be included in the sample. In view of the low number of replies, the Commission decided that sampling was not necessary. No comments were made to this decision.

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

(18) Five exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three company groups on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of the country concerned, were consulted on the selection of the sample. No comments were made.

(19) One Turkish exporting producer that returned the sampling form had requested individual examination under Article 17(3) of the basic Regulation. On the day of initiation, the Commission made the questionnaire for exporting producers available online (5). In addition, when announcing the sample, the Commission informed the non-sampled exporting producers that they were required to provide reply to this questionnaire if they wished to be examined individually. However, the company originally requesting individual examination did not provide a questionnaire reply. Therefore, no individual examination was granted.

(20) The Commission sent a questionnaire to the complainant and requested the three sampled Union producers, the unrelated importer that returned a sampling form plus another importer that came forward, several users and the three sampled exporting producers in Turkey to fill in the relevant questionnaires made available online (6).

(21) Furthermore, since the complainant provided sufficient evidence of raw material distortions in Turkey with regard to the product under investigation, the Commission sent an additional questionnaire to the Government of Turkey (‘GOT’) concerning this matter.

(22) Questionnaire replies were received from the three sampled Union producers, the complainant, the user Marcegaglia Carbon Steel S.P.A., the user San Polo Lamiere S.P.A., four users within the Network Steel group, the unrelated importer Network Steel S.L., the three sampled exporting producers and the GOT.

(23) In view of the outbreak of COVID-19 and the confinement measures put in place by various Member States as well as by various third countries, the Commission could not carry out verification visits pursuant to Article 16 of the basic Regulation at provisional stage.

(25) With regard to the provisions of Articles 7(2a) and 7(2b) of the basic Regulation, a consultation with the GOT took place via video conference.

(26) Following the RCC of the Erdemir group, given certain shortcomings of the information on transport costs provided by the group, the Commission decided to replace these costs with facts available pursuant to Article 18(1) of the basic Regulation, as explained in recitals (56) to (59)(59) below.

(27) The investigation of dumping and injury covered the period from 1 January 2019 to 31 December 2019 (‘the investigation period’ or ‘the IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2016 to the end of the investigation period (‘the period considered’).

(28) The product concerned is certain flat-rolled products of iron, non-alloy steel or other alloy steel, whether or not in coils (including ‘cut-to-length’ and ‘narrow strip’ products), not further worked than hot-rolled, not clad, plated or coated, originating in Turkey, currently falling under CN codes 7208 10 00, 7208 25 00, 7208 26 00, 7208 27 00, 7208 36 00, 7208 37 00, 7208 38 00, 7208 39 00, 7208 40 00, 7208 52 10, 7208 52 99, 7208 53 00, 7208 54 00, 7211 13 00, 7211 14 00, 7211 19 00, ex 7225 19 10 (TARIC code 7225191090), 7225 30 90, ex 7225 40 60 (TARIC code 7225406090), 7225 40 90, ex 7226 19 10 (TARIC code 7226191090), 7226 91 91 and 7226 91 99. The CN and TARIC codes are given for information only.

(30) HRFS is used in a wide range of applications in many economic sectors including construction, shipbuilding and energy. It is used for example in the production of agricultural equipment, armour steel, construction and building components, domestic appliances and electrical goods, automotive etc.

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

(33) A manufacturer of forklifts and components for forklift-trucks and construction machines requested the exclusion of hot-rolled long bar steel products from the product under investigation (8). The Commission noted that hot-rolled long bar steel products fall outside the scope of this investigation because a 6-12m long hot-rolled bar is a long product and not a flat steel product.

(34) Three companies were sampled, of which one was a group.

(35) All of Habas’ domestic and export sales to the Union were direct sales to unrelated customers.

(36) Colakoglu sold on the domestic market directly to unrelated customers, while all of Colakoglu’s exports of the product concerned to the Union in the IP were done through a related company, Cotas, located in Turkey.

(37) Erdemir Group consisted of three companies directly involved in the investigation: exporting producers Erdemir and Isdemir, and service centre Ersem. Both Erdemir and Isdemir produced the product under investigation, sold it on the domestic market and exported it to the Union and to third countries in the IP. Ersem purchased the product under investigation from Erdemir and/or Isdemir, resold it on the domestic market with or without further processing (such as cutting and slitting coils into sheets and strips).

(38) The Commission first examined whether the total volume of domestic sales of the like product for each sampled exporting producer was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of the like product 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.

(39) On this basis, the total sales by each sampled exporting producer of the like product on the domestic market were representative.

(40) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union for the exporting producers with representative domestic sales.

(41) The Commission then examined whether the domestic sales by each sampled exporting producer on the domestic market for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union.

(42) For one of the three sampled exporters, all the domestic sales of the product types identical or comparable with those exported to the Union in the IP were representative. For the other two sampled exporters, for some product types that were exported to the Union during the IP there were either no domestic sales at all, or the domestic sales of that product type were below 5 % in volume and thus not representative.

(43) The Commission next defined the proportion of profitable sales to independent customers on the domestic market as compared to the total sales to independent customers on the domestic market for each product type during the investigation period. This was done in order to decide whether the Commission could disregard unprofitable domestic sales as being not in the ordinary course of trade for the calculation of the normal value of each product type, in accordance with Article 2(4) of the basic Regulation.

(46) The analysis of domestic sales of the three sampled exporters showed that 17 % to 100 % of all domestic sales per product type during the IP were profitable, and that the weighted average sales price was higher than the weighted average unit cost of production. Accordingly, depending on the product type, the normal value was calculated as a weighted average of the prices of all domestic sales during the IP in the situation described in recital (44), or as a weighted average of the profitable sales only in the situation described in recital (45).

(47) When a product type was not sold in representative quantities or not sold at all on the domestic market as provided for in Article 2(2) of the basic Regulation, and when there were no or insufficient sales of a product type of the like product in the ordinary course of trade, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

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

(50) The sampled exporting producers exported to the Union either directly to independent customers or through related companies acting as traders, as described in recitals (34) to (37) above.

(51) Two sampled exporting producers exported the product concerned directly to independent customers in the Union during the IP. Therefore, their 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. The third sampled exporting producer exported the product concerned to the Union exclusively through a related company located in Turkey.

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

(53) Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport, insurance, handling, loading and ancillary costs, credit costs, and commissions.

(54) One exporting producer exported the product concerned to the Union through a related company located in Turkey acting as a trader, with whom it claimed to constitute a single economic entity. The Commission recalled that under EU case law, a single economic entity exists where a producer entrusts tasks normally falling within the responsibilities of an internal sales department to a distribution company for its products which it controls economically. However, the investigation revealed that the related trader did not fulfil these criteria, as it did not represent the exclusive sales channel nor the exclusive export sales channel of the producer, who exported both the product concerned and other products directly to third countries’ markets, as well as other products to the Union during the IP. For these reasons, the claim was rejected.

(55) As a consequence, to establish an export price ex-works of that exporting producer, the export price was adjusted pursuant to Article 2(10)(i) of the basic Regulation. Thus, the Commission deducted from the export price the SG&A costs of the related trader that was found not to form a single economic entity with the exporting producer, and a profit equal to the profit of an unrelated importer in the Union established on the basis of the information on the file of this investigation as well as the findings of a previous investigation on imports of products similar to the product under investigation (9).

(56) During the RCC of one sampled exporting producer, the Commission found that the company had omitted important information with regard to its transport costs incurred for sales of the product concerned on the domestic market. Therefore, the Commission was not able to assess whether the transport costs claimed as an adjustment to the normal value were reported correctly.