Commission Implementing Regulation (EU) 2021/854 of 27 May 2021 imposing a provisional anti-dumping duty on imports of stainless steel cold-rolled flat products originating in India and Indonesia

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) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 30 September 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of stainless steel cold-rolled flat products (‘SSCR’ or ‘the product under investigation’) originating in India and Indonesia ('the countries concerned'), on the basis of Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the Council. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 17 August 2020 by the European Steel Association (‘Eurofer’ or ‘the complainant’) on behalf of producers representing more than 25 % of the total Union production of stainless steel cold-rolled flat products. The complaint contained evidence of dumping from the countries concerned and resulting material injury that was sufficient to justify the initiation of the investigation.

(3) Following a request by the complainant supported by the required evidence, the Commission made imports of the product concerned subject to registration under Article 14(5) of the basic Regulation by Commission Implementing Regulation (EU) 2021/370 (3).

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

(5) Interested parties had the 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 a hearing with the complainant, one exporting producer and one Union user. The Commission received comments that are addressed in Sections 2.3 and 5.2 and 7.2.

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

(7) In the Notice of Initiation, the Commission stated that it had decided to limit to a reasonable number the Union producers that would be investigated by applying sampling, and that it had provisionally selected a sample of Union producers. The Commission selected the provisional 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. The provisional sample thus established consisted of three Union producers accounting for more than 60 % of production and around 70 % of sales in the Union of the like product, and located in four different Member States. Details of this provisional sample were made available in the file for inspection by interested parties, with the possibility for them to make comments. No comments were made.

(8) As a result of the above, the provisional sample of Union producers was confirmed. It consisted of Aperam Stainless Europe (‘Aperam’), Acciai Speciali Terni S.p.A. (‘AST’) and Outokumpu Stainless Oy (‘OTK’). The definitive sample is representative of the Union industry.

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

(10) Three unrelated importers made themselves known as interested parties and provided the requested information. In view of the low number of replies received, sampling was not necessary. No comments were made to this decision. The importers were invited to complete a questionnaire.

(11) In view of the potentially large number of exporting producers in the countries concerned, the Notice of Initiation provided for sampling in India and Indonesia and therefore, the Commission asked all known exporting producers in India and Indonesia to provide the information specified in the Notice of Initiation to decide whether sampling was necessary and, if so, to select a sample.

(12) In addition, the Commission asked the Mission of India to the European Union and the Embassy of the Republic of Indonesia in Brussels to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(13) Upon initiation, seven potential exporting producers in India were contacted by the Commission. Two exporting producers in India provided the information required for sampling and they represented all exports of the product concerned to the Union. The Commission therefore abandoned sampling with regard to exporting producers in India.

(14) Upon initiation, 14 potential exporting producers in Indonesia were contacted by the Commission. Three exporting producers replied to the sampling questions and reported sales to the Union. According to the information provided in the sampling returns, their sales represented 72 % of Indonesian exports to the Union. On that basis, sampling was abandoned also for Indonesia.

(15) The complaint provided sufficient prima facie evidence of raw material distortions in India and Indonesia regarding the product concerned. Therefore, as announced in the Notice of Initiation, the investigation covered those raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation with regard to India and Indonesia. For this reason, the Commission sent questionnaires in this regard to the Governments of India (‘GOI’) and Indonesia (‘GOIS’).

(16) The Commission sent questionnaires to the three sampled Union producers, the complainant, the three unrelated importers, and the five exporting producers in the countries concerned. The same questionnaires had also been made available online (4) on the day of initiation.

(17) Questionnaire replies were received from the three sampled Union producers, the complainant, two unrelated importers, the two exporting producers from India and three exporting producers from Indonesia. Questionnaire replies were also received from the GOI and the GOIS.

(18) 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. The Commission instead cross-checked remotely all the information deemed necessary for its provisional determinations in line with its Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (5).

(20) With regard to the procedure of Articles 7(2a) and 7(2b) of the basic Regulation, RCCs with the GOI and with the GOIS took place.

(21) The investigation of dumping and injury covered the period from 1 July 2019 to 30 June 2020 (‘the investigation period’ or ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2017 to the end of the investigation period (‘the period considered’).

(22) The product concerned by this investigation is flat-rolled products of stainless steel, not further worked than cold-rolled (cold-reduced), currently falling under CN codes 7219 31 00, 7219 32 10, 7219 32 90, 7219 33 10, 7219 33 90, 7219 34 10, 7219 34 90, 7219 35 10, 7219 35 90, 7219 90 20, 7219 90 80, 7220 20 21, 7220 20 29, 7220 20 41, 7220 20 49, 7220 20 81, 7220 20 89, 7220 90 20 and 7220 90 80 and originating in India and Indonesia. The CN codes are given for information only.

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

(25) At a very late stage of the provisional part of the investigation, one Union user came forward as an interested party and sent a submission concerning the product scope. The company requested the exclusion of products with steel grade 200 (‘200 SSCRPs’) from the product scope as, according to the company, those products have no or very limited production in the Union and such products have a specific and niche end use. According to the company, the exclusion of 200 SSCRP on the basis of their steel grade and end use would not risk circumvention of other types of products.

(26) The above claim was opposed by the complainant. Eurofer insisted that the 200 SSCRPs are produced by at least two of the Union producers. Moreover, Eurofer submitted that they can be easily replaced by other steel grades in end use, and are as such in direct competition with these product types. Furthermore, the 200 SSCRPs have the same basic physical, chemical and technical characteristics as well as distribution channels as other steel grades and cannot be easily identified without specialist tests – which, according to the complainant, clearly opens the possibility of circumvention. Considering the claims made by Eurofer, the Commission provisionally concluded that the product types are interchangeable.

(27) Taking into account the very late submission of the product scope request, the fact that there is Union production of the 200 SSCRPs and the interchangeability of 200 SSCRPs with other product types, the product exclusion request is provisionally rejected.

(28) Given the limited number of parties cooperating both in India and Indonesia, the details of certain findings on dumping are confidential and therefore only contained in the bilateral disclosures.

(29) The two co-operating exporting producers in India were Chromeni Steels Private Limited and the Jindal Group.

(30) Chromeni Steels Private Limited produced the product concerned in India and sold it on the domestic market mainly to unrelated and to a few related customers. All exports to the Union were made directly to unrelated customers.

(32) The RCC revealed that a related company of the Jindal Group in a third country was involved in the sales of the product concerned to the Union. Yet the relevant role of this party with regard to the product under investigation had not been reported as such in the correspondence by the Jindal Group, including in the questionnaire replies. Consequently, the Commission informed the Jindal Group, by letter of 23 March 2021, that it intended to apply the provisions of Article 18 of the basic Regulation and use facts available with regard to the information that had not been disclosed relating to the role of the related company. Following that letter, the related company located in a third country submitted comments on 29 March 2021. With their comments, the Jindal group also provided the related company’s reply to the annex to the questionnaire.

(33) These comments were reiterated during a hearing with the Hearing Officer on 16 April 2021.

(34) The comments of the Jindal Group on the March 23 letter were duly assessed but they did not alter the Commission’s appreciation of the facts. In particular, the reply to the annex to the questionnaire which was submitted in reply to the Commission’s letter of 23 March 2021 could not be remotely cross-checked and therefore, the Commission could not assess the completeness of the information provided on behalf of that party.

(35) Consequently, the Commission confirmed its intention to apply the provisions of Article 18 of the basic Regulation at this stage.

(36) The Commission first examined whether the total volume of domestic sales for each cooperating 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.

(37) On this basis, the total sales volume by each cooperating exporting producer of the like product on the domestic market were found to be representative.

(38) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union.

(39) The Commission then examined whether the product types sold by each of the cooperating 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.

(40) 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 or whether to disregard the sales outside of the ordinary course of trade by reason of price, in accordance with Article 2(4) of the basic Regulation.

(42) 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.

(44) Where more than 80% of the domestic sales per product type during the investigation period were profitable, and where the weighted average sales price was equal to or higher than the weighted average unit cost of production, the normal value was calculated as a weighted average of the prices of all actual domestic sales during the investigation period in the situation described in recital (42). Alternatively, the normal value was calculated as a weighted average of the profitable sales in the situation described in recital (43).

(45) When a product type was not sold in representative quantities or not sold at all on the domestic market, and when there were no or insufficient sales of a product type of the like product in the ordinary course of trade, as provided for in Article 2 (2) and (4) of the basic Regulation, the Commission constructed the normal value in accordance with Article 2 (3) and (6) of the basic Regulation.

(47) 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.

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

(49) For the exporting producers that exported the product concerned directly to independent customers in the Union and for exporting producers that exported the product concerned to the Union through related companies located in a third country, 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.

(50) For the exporting producers that exported the product concerned to the Union through related companies acting as an importer, 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.

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

(52) 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 commission of the related trader in a third country (see recital(49)). Adjustments to the normal value and the export price were made for transport, insurance, packing, handling, loading and ancillary costs, credit cost, bank charges and conversion costs when applicable and discounts, including deferred discounts, where they affected price comparability.

(53) The Jindal Group made a claim under Article 2(10)(b) of the basic Regulation for a duty drawback adjustment to the normal value, arguing that the existence of a flat rate ‘Duty Drawback Scheme’ implies that all their domestic sales would incorporate an indirect tax compared to the export sales. However, the Jindal Group failed to establish that the claimed amounts were linked to the imports of incorporated raw materials or to the duties paid on them. The claim was therefore rejected.

(54) In view of the RCC findings with regard to Jindal’s related company located in third country, as explained in recitals (32) to (35) above, the Commission replaced certain information with regard to the allowances applicable to Jindal Group’s sales prices to the Union by facts available under Article 18 of the basic Regulation.

(55) 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.

(56) The level of cooperation in this case was considered high as the exports of the cooperating exporting producers constitute 100% of the total exports to the EU during the IP. No other exporting producers than the cooperating two could be identified. Consequently, the Commission found it appropriate to set the residual dumping margin at the level of the exporting producer with the highest dumping margin.