Commission Implementing Regulation (EU) 2022/1305 of 25 July 2022 imposing a definitive anti-dumping duty on imports of molybdenum wire originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

• (129) The Union industry’s average unit sales price to unrelated customers in the Union remained stable over the period considered, with the exception of 2019 when the average price went up by 8 percentage points in comparison with 2017.

• (130) The average cost of production of the Union industry remained relatively stable over the period considered, although intermittently, in 2018, the unit cost increased by 7 percentage points and in 2019 by another 11 percentage points in comparison with 2017.

5.5.3.2.   Labour costs

• (131) The average labour costs of the Union industry developed over the period considered as follows:

Table 10

Average labour costs per employee

• (132) The average labour costs per employee increased by 15 % over the period considered, however with a sharp intermittent increase of 42 % in 2018.

5.5.3.3.   Inventories

• (133) Stock levels of the Union industry developed over the period considered as follows:

Table 11

Inventories

• (134) Inventories represented only a very small percentage of total production during the period considered. This factor was therefore not considered meaningful for the assessment of the economic situation of the Union industry.

5.5.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

• (135) Profitability, cash flow, investments and return on investments of the Union industry developed over the period considered as follows:

Table 12

Profitability, cash flow, investments and return on investments

• (136) The Commission established the profitability of the Union industry by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales.

• (137) The profitability of the Union industry dropped from 2017 to 2018 by 44 percentage points, then in 2019 deceased a further 9 percentage points and finally increased during the review investigation period 38 percentage points. All in all, profitability decreased by 17 % during the period considered.

• (138) Although the profitability dropped during the period considered, it remained at high levels.

• (139) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed positively during the period considered, however in comparison with 2017, in 2018 it was 13 % lower, in 2019 39 % lower and in the review investigation period it ended up 12 % higher.

• (140) The investments increased substantially in comparison with 2017 and especially during 2019 and the review investigation period, mainly because of the upgrade of a production line of Plansee SE.

• (141) The return on investments is the profit in percentage of the net book value of investments. The return on investment from the production and sale of the like product decreased over the period considered. However, there was a more pronounced decrease through the years 2018 and 2019 and the indicator recovered considerably ending up 40 % lower than in 2017.

5.6.   Conclusion on injury

• (142) During the period considered, the Union consumption decreased by 29 % and, although the market share of the Union industry was close to 100 %, this decline in demand had a negative impact on a number of injury indicators.

• (143) Although profitability remained at healthy levels in the review investigation period, it fell by 17 % during the period considered and some of the other injury indicators like production, production capacity, capacity utilization and sales volume experienced a negative development during the period considered. Specifically, the production volume dropped by 30 %, the production capacity by 20 %, the capacity utilisation by 13 % and the sales volume by 29 %, all of which due to the contracting market demand in the Union. Other indicators, such as number of employees (by 25 %) and cash flow (by 12 %), improved over the period considered.

• (144) The volume of imports from the PRC or from other countries into the Union were very low. In the previous expiry review the market share of the imports from China increased mainly due to circumvention practices that had stopped in the meantime following the imposition of anti-circumvention measures in 2013 and 2015.

• (145) On the basis of the above, the Commission concluded that the Union industry did not suffer material injury within the meaning of Article 3(5) of the basic Regulation during the review investigation period.

• (146) Therefore, the Commission further examined the likelihood of recurrence of injury originally caused by dumped imports from the PRC if the measures were repealed.

6. LIKELIHOOD OF RECURRENCE OF INJURY

• (147) The Commission concluded in recitals (145) that the Union industry did not suffer material injury during the review investigation period. Therefore, the Commission assessed, in accordance with Article 11(2) of the basic Regulation, whether there would be a likelihood of recurrence of injury if the measures were allowed to lapse.

• (148) In this regard, the Commission examined the production capacity and spare capacity in the PRC, the attractiveness of the Union market as well as the likely price levels of imports from the PRC in the absence of anti-dumping measures and their possible impact on the Union industry.

6.1.   Production capacity and spare capacity in the PRC

• (149) Based on the request, the PRC producers have a production capacity of approximately 3 500 tonnes per year, over 19 times higher than the Union consumption.

6.2.   Attractiveness of the Union market and pricing behaviour in third countries

• (150) The Union market is attractive in terms of its size and prices as well as due to the importance of the EU automotive industry. In the past Chinese producers repeatedly showed their interest in the Union market by attempting to circumvent the anti-dumping measures. Also, average import prices from the PRC to the Union were lower than the export prices from the PRC to other countries during the review investigation period.

• (151) In the absence of significant quantities sold by Chinese exporting producers to the Union, the Commission also analysed their pricing behaviour when exporting to third countries. The PRC producers sell on average at prices which are [28-37] % lower than the average price charged by the Union industry. Consequently, exporting producers have strong incentive to redirect their sales to the Union market should the measures be allowed to lapse.

• (152) The Union market is hence considered very attractive for Chinese producers, and it can be concluded that available spare capacities in China would, at least partially, be used to significantly increase exports to the Union market at dumped prices should the measures expire.

6.3.   Possible scenarios in the case of lapsing of measures

• (153) The attractiveness of the Union market, as described in recitals (93) and (150), would probably lead to a significant increase of dumped imports from the PRC. As molybdenum wire is a rather homogenous product in terms of quality, the price level is the most important factor when deciding on whether to buy from the Union producers or from the Chinese exporting producers. Furthermore, and as analysed in the previous expiry review, the sudden decrease in Chinese imports in response to the anti-dumping and anti-circumvention measures indicates that customers can easily switch to the supplier with the most competitive price (i.e. from the Chinese exporting producers to the Union producers or vice-versa in case the measure lapse).

• (154) For these reasons, the Union industry will then be likely forced to either reduce its sales prices at the expense of their profitability or to keep the sales prices level and most likely lose sales volume and market share to the Chinese exporters. A combination of these scenarios seems even more realistic. Ultimately, this would lead to downward price pressure, losses and the imports from the PRC likely regaining their pre-measures market share.

• (155) To assess quantitatively the likely impact of imports from the PRC on the financial situation of the Union industry, the Commission performed a simulation. Two scenarios were modelled, namely a surge of imports from the PRC (i) at the level of the PRC import volumes during the investigation period of the original case in 2009 (i.e. from 1 April 2008 to 31 March 2009), but at the same price level as charged to unrelated customers by the Union industry and (ii) at the level of the PRC exporting producers’ market share during the investigation period of the original case back in 2009, while undercutting the Union industry’s prices by 15 %. Given that the exporting producers’ prices to third countries were on average [28-37] % lower than the prices charged by the Union industry during the review investigation period, the figure chosen for undercutting (15 %) is very conservative since the actual undercutting found was [52-67] % during the review investigation period. Moreover, for the determination of the hypothetical cost of production, the Commission took into account the share of the fixed costs to the total costs of production of the sampled Union producers.

• (156) In the first scenario, the profitability of the Union industry would fall to – [15 – 24] %.

In the second scenario, the profitability of the Union Industry would even fall to –[25 – 33] %.

• (157) In both conservative scenarios, the impact of Chinese imports would render the Union industry highly unprofitable.

• (158) On this basis, the Commission concluded that the absence of measures would in all likelihood result in a significant increase of dumped imports from the PRC at injurious prices, which will lead to recurrence of material injury.

7. UNION INTEREST

• (159) In accordance with Article 21 of the basic Regulation, the Commission examined whether maintaining the existing anti-dumping measures would be against the interest of the Union as a whole. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.

• (160) All interested parties were given the opportunity to make their views known pursuant to Article 21(2) of the basic Regulation.

• (161) On this basis, the Commission examined whether, despite the conclusions on the likelihood of continuation of dumping and recurrence of injury, compelling reasons existed which would lead to the conclusion that it was not in the Union interest to maintain the existing measures.

7.1.   Interest of the Union industry

• (162) The anti-dumping measures in force had a positive effect on the Union industry and allowed it to recover from the past dumping during the review investigation period.

• (163) However, should the measures be allowed to lapse, the Commission concluded that there is a strong likelihood of recurrence of injury given the attractiveness of the Union market, the spare capacities available in the PRC, the pricing behaviour of the exporting producers in the PRC and the history of circumvention.

• (164) The Commission thus concluded that maintaining the anti-dumping measures on imports of the product under review originating in the PRC is in the interest of the Union industry.

7.2.   Interest of unrelated importers, traders and users

• (165) The Commission invited unrelated importers, traders and users to come forward but did not receive any questionnaire reply.

• (166) The Commission did not receive any comments indicating that maintaining the measures would have a significant negative impact on the importers and users, outweighing the positive impact of the measures on the Union industry.

• (167) Therefore, the Commission concluded that maintaining the measures would not have any important impact on importers, traders and users of the Union.

7.3.   Conclusion on Union interest

• (168) In view of the above, the Commission concluded that there are no compelling reasons of Union interest against maintaining the existing measures on imports of the product under review originating in the PRC. Maintaining measures would be in the interest of the Union industry and would not harm the situation of users and importers in the Union.

8. FINAL PROVISIONS

• (169) It follows from the above considerations that, under Article 11(2) of the basic Regulation, the anti-dumping measures applicable to imports of certain molybdenum wires originating in the PRC, imposed by Regulation (EU) 2016/1046 should be maintained. As a consequence, the extension of the measures following anti-circumvention investigations mentioned in recital (2) should also be maintained.

• (170) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ⁵⁴, when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

• (171) The measures provided for in this regulation are in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

The duty set out in Article 1(2) is hereby extended to imports of molybdenum wire, containing by weight at least 99,95 % of molybdenum, of which the maximum cross-sectional dimension exceeds 1,35 mm but does not exceed 4,0 mm, currently falling under CN code ex 8102 96 00 (TARIC code 8102960011), consigned from Malaysia, whether declared as originating in Malaysia or not.

Article 3

The duty set out in Article 1(2) is hereby extended to imports into the Union of molybdenum wire, containing by weight at least 97 % but less than 99,95 % of molybdenum, of which the maximum cross-sectional dimension exceeds 1,35 mm but does not exceed 4,0 mm, originating in the People’s Republic of China, currently falling within CN code ex 8102 96 00 (TARIC code 8102960030).

Article 4

The duty set out in Article 1(2) is hereby extended to imports of molybdenum wire, containing by weight at least 97 % of molybdenum, of which the maximum cross-sectional dimension exceeds 4,0 mm but does not exceed 11,0 mm originating in the People’s Republic of China, currently falling under CN code ex 8102 96 00 (TARIC codes 8102960020 and 8102960040).

Article 5

Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 6

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 25 July 2022.

For the Commission

The President

Ursula VON DER LEYEN