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Commission Implementing Regulation (EU) 2022/1395 of 11 August 2022 imposing a definitive anti-dumping duty on imports of certain corrosion resistant steels originating in Russia and Turkey

Type Implementing Regulation
Publication 2022-08-12
State In force
Text As published
Department European Commission, TRADE
Source EUR-Lex
articles 5

This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.

Reform history JSON API
  • (130) As mentioned in recital (92), in addition to SDE, PAOS exported to the Union also via Severstal Export GmbH, a related trader located in Switzerland. Severstal Export GmbH performed functions equivalent to that of an agent working on a commission basis within the meaning of Article 2(10)(i) of the basic Regulation. Therefore, the Commission adjusted the export price to ensure fair comparison. The Commission deducted from the export price charged to the first independent customer the SG&A of Severstal Export GmbH and a reasonable profit, based on the profit of an unrelated importer.
  • (131) Following final disclosure, NLMK claimed that its dumping margin should be calculated on a quarterly basis due to the increasing trends of its cost of manufacturing, normal value and export price throughout the IP in conjunction with an uneven distribution of its sales to the Union.
  • (132) The Commission noted that a quarterly calculation would only be warranted in very specific circumstances, for example if the cost of production increased considerably throughout the IP combined with the export sales being concentrated in one part of the IP, and the domestic sales in another. In the present case, the production and the domestic sales were evenly distributed over the whole investigation period. In addition, the unit price on the domestic market (+ 6 – 10 % in the second quarter, +10 – 13 % in the third quarter, +25 – 26 % in the fourth quarter) and the unit cost of production (+ 1 – 4 % in the second quarter, +10 – 13 % in the third quarter, +25 – 26 % in the fourth quarter) followed a similar trend over the IP. The company’s pricing decisions on the Union market followed, however, a completely different trend. The export price increased between the first and second quarter by 28 – 32 %, decreased slightly in the third quarter but continued growing and in the fourth quarter reached +43 – 47 % of its value in the first quarter. This increase was not paralleled by the costs of production that only slightly increased between the first and the second quarter then a bit more sharply in the third quarter and significantly in the fourth quarter. It was the company’s decision to price its exports to the Union at a considerably lower level during a quarter, in which the exported quantities were most concentrated. Therefore, the Commission considered that the request for a quarterly calculation was not justified in the present case and subsequently dismissed the claim.
  • (133) Following the additional final disclosure mentioned in recital (65), NLMK claimed that in accordance with Article 2(10)(j) of the basic Regulation, the Commission should recognise the date of contract as the date when materials terms of trade were established in the present case as far as it concerns the export sales transactions to be used in the dumping calculation. In this respect, the company also referred to a previous investigation 20, in which the contract/purchase order date were used to establish the material terms of trade instead of the invoice date.
  • (134) The Commission noted that Article 2(10)(j) of the basic Regulation concerned currency conversions and the date of exchange rate used where currency conversions were necessary for the purpose of comparison. The Commission noted that those provisions were not applicable to determine which transactions should be included in the dumping margin calculation. In addition, the Commission noted that in the previous investigation, the date of contract/purchase order was decisive only for the purposes of determining the date of the exchange rate to be used. This is the extent to which a potential adjustment under Article 2(10)(j) of the basic Regulation can be made. This provision cannot be used to exclude transactions from the dumping calculation.
  • (135) Consequently the Commission rejected the claim.
3.1.4.   Dumping margins
  • (136) For the 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.
  • (137) As explained in recitals (12) to (14), sampling of the Russian exporting producers was abandoned and the investigation was conducted on all cooperating companies.
  • (138) For all other exporting producers in Russia, 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 is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of the Surveillance 2 database as explained in recital (201).
  • (139) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted around 98 % of the total imports during the investigation period. On this basis, the Commission found it appropriate to establish the dumping margin for non-cooperating exporting producers at the level of the cooperating company with the highest dumping margin.
  • (140) The definitive dumping margins, taking into consideration the changes following final disclosure, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:
Company Dumping margin
PJSC Magnitogorsk Iron and Steel Works 36,6  %
Novolipetsk Steel 12,7  %
PAO Severstal 39,8  %
All other companies 39,8  %

3.2.   Turkey

3.2.1.   Normal value
  • (141) The Commission first examined whether the total volume of domestic sales for each sampled 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. On this basis, the total sales by each sampled exporting producer of the like product on the domestic market were representative.
  • (142) 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.
  • (143) The Commission then examined whether the domestic sales by each sampled exporting producer on its 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.
  • (144) For each of the three exporters, for some product types that were exported to the Union during the investigation period 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.
  • (145) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.
  • (146) The normal value is based on the actual domestic price per product type, irrespective of whether those sales are profitable or not, if:
  • (a) the sales volume of the product type, sold at a net sales price equal to or above the calculated cost of production, represented more than 80 % of the total sales volume of this product type; and
  • (b) the weighted average sales price of that product type is equal to or higher than the unit cost of production.
  • (147) In such situation, the normal value is the weighted average of the prices of all domestic sales of that product type during the investigation period.
  • (148) The normal value is the actual domestic price per product type of only the profitable domestic sales of the product types during the investigation period, if:
  • (a) the volume of profitable sales of the product type represents 80 % or less of the total sales volume of this type; or
  • (b) the weighted average price of this product type is below the unit cost of production.
  • (149) The analysis of domestic sales showed that, depending on the product type, 14 to 100 % of all domestic sales of MMK Turkey, 28 to 100 % of all domestic sales of Tatmetal and 19 to 100 % of all domestic sales of Tezcan were profitable and that the weighted average sales price was higher than the cost of production. Accordingly, the normal value was calculated as a weighted average of the prices of all domestic sales during the investigation period or a weighted average of the profitable sales only.
  • (150) For the product types where the weighted average sales price was lower than the cost of production, the normal value was calculated as a weighted average of the profitable sales of that product type.
  • (151) Where there were no sales of a product type of the like product in the ordinary course of trade or where a product type was not sold in representative quantities on the domestic market, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.
  • (152) Normal value was constructed by adding the following to the average cost of production of the like product of the sampled exporting producers during the investigation period:
  • (a) the weighted average selling, general and administrative (‘SG&A’) expenses incurred by the sampled exporting producers on domestic sales of the like product, in the ordinary course of trade, during the investigation period; and
  • (b) the weighted average profit realised by the sampled exporting producers on domestic sales of the like product, in the ordinary course of trade, during the investigation period.
  • (153) 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, the weighted average SG&A expenses and profit of all transactions made in the ordinary course of trade on the domestic market were added.
  • (154) Following final disclosure, MMK Turkey claimed that the Commission made an error when it excluded part of the company’s financial costs from SG&A expenses while constructing normal value.
  • (155) The excluded financial costs were foreign exchange incomes/losses which were not actual expenses but resulted from the difference in exchange rates between the invoice currency and the accounting currency on the date of transaction and date of payment, and therefore do not reflect the actual SG&A expenses pertaining to the production or sales of the product under investigation. Furthermore, the Commission noted that it took the same approach with respect to all the sampled companies regardless of whether they made losses or gains from foreign exchange. The reason for that approach is that, in extreme cases, not doing so would lead to overall negative SG&A costs which would not reflect actual SG&A expenses. Therefore, this claim was rejected.
  • (156) Following final disclosure Tezcan indicated that there was an error in the calculation of the costs of one of the raw materials due to double counting of its opening stocks. The Commission corrected this error and re-disclosed a revised dumping calculation to Tezcan. The impact of this correction did not change the dumping margin of the company because the final dumping margins are expressed at the level of the first digit after coma.
  • (157) The same company claimed that, in the amendments done to its cost of production, the Commission did not take into account differences in the cost of coils used for the production of exported and domestically sold CRS which allegedly resulted from a duty exemption scheme used by the company.
  • (158) The investigation revealed that the imported and domestically purchased coils cannot be linked directly to the manufacturing of either exported or domestically sold products and that, for the duty exemption system, an exporting producer can use ‘equivalent goods’ instead of the imported goods stated in the authorisation certificate. Therefore, the Commission could not establish any difference in the actual cost of manufacturing of CRS for export and domestic market resulting from the use of the duty exemption scheme. Therefore, this claim was rejected.
  • (159) Finally, in its comments on disclosure and at a hearing with the Commission services, Tezcan claimed that the Commission wrongly used its cost of production for the domestic market (‘DMCOP’) instead of the cost of production for exports to the EU (‘EUCOP’) in the construction of normal value for those product types which were not sold domestically in the IP. The company claimed that this is inconsistent with the Commission’s description of the methodology provided in the specific disclosure, the Commission’s ‘long-standing practice’ and EU jurisprudence. The company further claimed that actually EUCOP should have been used also in the construction of the normal value for those product types which had ‘extremely limited’ domestic sales in the IP.
  • (160) The Commission’s practice is to construct normal value on the basis of DMCOP and the SG&A expenses and profit of transactions made in the ordinary course of trade on the domestic market. EUCOP is used only if there is no DMCOP for specific types of products in the IP. This practice is consistent with the Court case quoted by Tezcan, that states that ‘the purpose of constructing the normal value is to determine the selling price of a product as it would be if that product were sold in its country of origin or in the exporting country 21’. In this investigation, the product types at issue were manufactured in the IP for the domestic market but were not sold, i.e. they remained in stock at the end of the IP. The company rightly reported a DMCOP for these product types. The DMCOP was verified by the Commission. The wording of the methodology provided in the specific disclosure referring to product types ‘not sold domestically’, for which EUCOP is to be used in the construction of normal value, is intended to mean product types ‘where DMCOP did not exist’. The wording is a general description of what the Commission does when constructing normal value and is not tailored for unusual cases where there are specific domestic costs of productions but no sales. However, this wording certainly does not reflect the practice of the Commission which follows the case-law recalled by the exporting producer and which was referred to above, as normal value should first be based on the costs and prices in the domestic market. Therefore, the claim was rejected.
  • (161) As mentioned in recital (35), Tezcan requested the intervention of the Hearing Officer on this issue. Tezcan reiterated the claim described in recital (159) and added that at the hearing with the Commission services, the Commission had orally agreed to accept this claim. The Commission wishes to clarify the situation. Indeed, during the hearing the Commission told the company that the claim and its bases were understood and that they could move on to following points. Still the Commission advised the company to leave the claim in writing in the submission. However, after a closer analysis of the claim after the hearing, the Commission concluded that the claim was not justified for the reasons explained in recital (160). The Commission informed the Hearing Officer of its further reflections and the conclusions.
3.2.2.   Export price
  • (162) All the sampled exporting producers exported to the Union directly to independent customers. 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.
3.2.3.   Comparison
  • (163) The Commission compared the normal value and the export price of the sampled exporting producers on an ex-works basis.
  • (164) 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, commissions and packing expenses.
  • (165) Following final disclosure, MMK Turkey claimed that the Commission wrongly treated some domestic transport costs between the two production sites of the company as internal transport costs and provided evidence that these costs were not internal. The Commission found the claim justified in view of the evidence and re-disclosed a revised dumping calculation to MMK. As a result MMK Turkey’s dumping margin decreased from 10,6 % to 10,5 %.
  • (166) Two sampled exporting producers made a claim under Article 2(10)(b) of the basic Regulation for a duty drawback adjustment, arguing that the existence of a duty drawback scheme for certain input materials in the country concerned implies that all their domestic sales would incorporate an indirect tax compared to the export sales.
  • (167) In Turkey, an import duty applies to hot rolled coils, which are an input in the manufacture of the CRS. Under the inward processing regime (IPR), domestic producers are exempted from the payment of such duty if the imported raw material is used to produce finished products that are finally exported. The two sampled exporters claimed that the amount of duties they would have paid if the finished CRS were sold domestically instead of exported should be taken into account for the purpose of fair comparison of the normal value and the export price.
  • (168) However, the investigation showed that none of the two sampled exporters paid any import duty during the investigation period, neither for domestic sales, nor for export sales as they fulfilled the export commitment linked to each IPR permit. As such, there could be no issue of price comparability between exports of CRS, incorporating hot rolled coils for which a duty was not paid, and domestic sales of CRS, incorporating hot rolled coils for which an import duty was paid (as the latter situation never arose during the investigation period). Neither exporting producer was able to substantiate with any evidence that absent the actual payment of import duties, domestically sold CRS incorporated the cost of the import duty on hot rolled coils in instances were no such import duty was actually paid. This cannot simply be presumed to be the case. For these reasons, the claim was considered unfounded and therefore rejected.
  • (169) Following final disclosure, Tatmetal reiterated its claims with regard to the duty drawback adjustment, but it provided no new evidence that could change the Commission’s conclusion as explained in recital (129). Therefore, this claim is rejected.
  • (170) One sampled producer requested the Commission to use the quarterly method to establish its individual dumping margin due to high inflation in Turkey and the decreasing values of the Turkish lira.
  • (171) The Commission analysed this claim and determined that the average inflation rate and devaluation of the Turkish lira in the investigation period were not of such magnitude as to justify deviating from the Commission’s consistent practice to calculate the dumping margin on an annual basis. Furthermore, the company has almost all domestic sales and all raw-material purchases in USD, so the impact of the exchange rate should be similar on normal value and on export price. Moreover, there was no concentration of domestic or export sales in any particular quarter, but sales were evenly distributed over the investigation period, except for a decline, for all three sampled companies, in export sales in quarter three which was clearly affected by the COVID restrictions. Therefore, the request for a quarterly calculation of dumping margins was rejected.
  • (172) Following final disclosure, Tezcan reiterated its claim that the dumping margin should be calculated quarterly. The company provided no new evidence, but argued that in the previous investigations, several against Turkey, the Commission resorted to this method and that the 12 % inflation rate in Turkey and 37 % devaluation of the Turkish lira against the euro in the IP would justify this approach.
  • (173) The company further argued that in a situation where the costs are weight-averaged for 12 months whereas the profitability of domestic sales is analysed on a transaction by transaction basis, some transactions were treated as loss making while in reality they were profitable, resulting in a distorted dumping margin, and quarterly calculations would result in a more adequate dumping margin.
  • (174) The Commission maintained that in this case neither the level of the inflation nor the Turkish lira devaluation rates justified such an approach. The Commission noted that in the previous investigations against Turkey quoted by Tezcan the inflation rates were significantly higher.
  • (175) Similarly, the Commission maintained its conclusion that in this investigation there was no concentration of domestic or export sales in any particular quarter that would justify quarterly calculations. Quarterly variations of domestic and exports sales are bound to occur, but it is only in exceptional situations that the Commission may set aside its standard methodology, for example in a situation described in the first sentence of recital (132). The Commission did not consider that the variation in the present case was so significant as to justify a quarterly calculation. Indeed, the Commission reiterated that it cannot be under an obligation to deviate from the standard methodology as set out in the basic Regulation whenever an exporting producer requests a different methodology that would improve its dumping margin.
  • (176) Consequently, the Commission upheld its rejection of this claim.
3.2.4.   Dumping margins
  • (177) Following final disclosure, Tezcan claimed that, should the Commission not exclude AluZinc CRS from the product scope, it should recalculate its dumping margin without AluZinc because it stopped producing it as of September 2021. This way Tezcan’s dumping margin would appropriately and adequately reflect present day reality. Tezcan added that the stop in production is manifest, undisputed and lasting. Tezcan also raised this claim at the hearing with the Hearing Officer, although the initial request for a hearing was limited to the claim regarding the use of EUCOP instead of DMCOP and Tezcan only asked to add this part, and submitted its presentation on the issue, one day before the hearing took place.
  • (178) The Commission disagreed with the claim. As provided in Article 6(1) of the basic Regulation, information relating to a period subsequent to the investigation period shall, normally, not be taken into account. Indeed, as per Commission’s practice, events relating to a period subsequent to the IP can only be taken into account if they are manifest, undisputed and lasting. More importantly, as clarified by the General Court in Case T-462/04 22, such events would need to make the anti-dumping duty manifestly inappropriate. That is not the case in this investigation as, based on the facts it verified, the Commission cannot establish with sufficient certainty that Tezcan will not produce AluZinc in the future. Even if this would have been the case, the exporting producer did not present any evidence showing, nor indeed argue, that the proposed duty was manifestly inappropriate. Therefore, the Commission rejected the claim.
  • (179) 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.
  • (180) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the three sampled exporting producers.
  • (181) On this basis, the definitive dumping margin of the cooperating exporting producers outside the sample is 8 %. This margin was not affected by the slight changes in individual dumping margins of MMK Turkey and Tezcan described in recitals (156) and (165).
  • (182) For all other exporting producers in Turkey, 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 is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of the Surveillance 2 database as explained in recital (201).
  • (183) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted 100 % of the total imports during the investigation period. On this basis, the Commission found it appropriate to establish the dumping margin for non-cooperating exporting producers at the level of the sampled company with the highest dumping margin.
  • (184) On this basis, the definitive weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:
Company Dumping margin
MMK Turkey 10,5  %
Tatmetal 2,4  %
Tezcan 11,0  %
Cooperating not sampled companies 8,0  %
All other companies 11,0  %

4. INJURY

4.1.   Definition of the Union industry and Union production

  • (185) The like product was manufactured by 20 producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.
  • (186) Russian exporting producers claimed that Steel Service Centres (‘SSCs’) related to the complainants imported the product under investigation from Russia and Turkey and that such Union producers should be disqualified as complainants.
  • (187) Russian exporting producers submitted no evidence of imports from Russia and Turkey by Union producers nor evidence of such imports in significant volumes by SSCs related to them. The verification visits confirmed that the Russian producers’ claim was groundless as far as sampled Union producers were concerned. The Commission dismissed the claim.
  • (188) Russian producers pointed to links between one of the producers supporting the complaint and Turkish exporters and called on the Commission to exclude the company concerned from the definition of Union industry.
  • (189) At initial stage, the company concerned itself acknowledged to have business interests in Turkey 23. However, the Commission found those interests insufficient to disqualify it as a Union producer in this investigation because they concern rather future plans. Thus, there was no objective reason to exclude this producer.
  • (190) The total Union production during the investigation period was established at 9 797 517 tonnes, including production for the captive market. The Commission established the figure on the basis of the questionnaire replies received from Eurofer and the sampled Union producers.
  • (191) As indicated in recital (7), the four sampled Union producers represented 25 % of the total Union production of the like product.

4.2.   Determination of the relevant Union market

4.2.1.   Captive and free market
  • (192) 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 (i.e., captive use or non-captive use) had to be taken into account in the analysis.
  • (193) The Commission found that a substantial part of the Union producers’ production, ca. 22 %, was destined for the captive market in the Union. CRS is captively used as an intermediate material for the production of organic coated steel.
  • (194) The distinction between captive and free market is relevant for the injury analysis in this case. Products destined for captive use are not exposed to direct competition from imports, but simply transferred to the next stage in production and/or delivered at transfer prices within the same company or groups of companies for further downstream processing according to the various price policies. By contrast, production destined for free market sale is in direct competition with imports of the product concerned and is sold at free market prices.
  • (195) To provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire CRS activity and determined whether the production was destined for captive use or for the free market.
  • (196) The Commission examined certain economic indicators relating to the Union industry on the basis of data for the free market. These indicators are: sales volume and sales prices on the Union market; market share; growth; export volume and prices; profitability; return on investment; and cash flow. Where possible and justified, the findings of the examination were compared with the data for the captive market in order to provide a complete picture of the situation of the Union industry.
  • (197) However, other economic indicators could meaningfully be examined only by referring to the whole CRS activity, including the captive use of the Union industry. These are: production; capacity, capacity utilisation; investments; stocks; employment; productivity; wages; and ability to raise capital. They depend on the whole activity, whether the production is captive or sold on the free market.
4.2.2.   Statistical data
  • (198) Following the request of several exporting producers, the Commission asked the complainant to supplement the information presented in the open version of the complaint as regards import volumes and values. The files supplementing Annex I-1 to the complaint were made available in the case file 24.
  • (199) Pursuant to Article 14(6) of the basic Regulation, in the course of the investigation, the Commission provided information on aggregated import volumes and values per exporting country for the calendar year 2020 for the product under investigation 25.
  • (200) The additional information described in the two recitals above was without prejudice to the final determination of import volumes in the current investigation.
  • (201) During the investigation, the Commission cross-checked the data in the Comext database with those in Surveillance 2 database (‘Surveillance 2’) and noticed some discrepancies at TARIC level. The Commission inquired the issue with Eurostat and it found that some Member States had not reported some of the imports concerned in Comext. The Commission therefore decided to rely on Surveillance 2 data to determine the Union market, import prices and market shares.
  • (202) Some product types covered by the investigation were only attributed a 10-digit TARIC code upon initiation of the anti-circumvention investigation in November 2019 26. As a result, data for those types was not available in Surveillance 2 for the period 2017–2019. Therefore, the Commission established those volumes on the basis of Table 1 of Commission Implementing Regulation (EU) 2020/1156 27.

4.3.   Union consumption

  • (203) The Commission established the Union consumption on the basis of: (a) Eurofer data concerning Union industry’s sales and captive use (including captive sales) of the like product, cross-checked with the sales and captive use volumes reported by sampled Union producers; and (b) imports of the product under investigation into the Union from all third countries as reported in Surveillance 2.
  • (204) Union consumption over the period considered developed as follows:

Table 1

Union consumption (tonnes)
2017 2018 2019 IP
Total Union consumption 11 494 857 11 062 815 11 306 869 10 691 239
Index (2017 = 100) 100 96 98 93
Captive market 2 504 391 2 667 375 2 358 802 2 167 741
Index (2017 = 100) 100 107 94 87
Free market 8 990 466 8 395 440 8 948 067 8 523 498
Index (2017 = 100) 100 93 100 95
Source: Eurofer, sampled Union producers and Surveillance 2 (adjusted) Source: Eurofer, sampled Union producers and Surveillance 2 (adjusted) Source: Eurofer, sampled Union producers and Surveillance 2 (adjusted) Source: Eurofer, sampled Union producers and Surveillance 2 (adjusted) Source: Eurofer, sampled Union producers and Surveillance 2 (adjusted)
  • (205) During the period considered, the Union consumption decreased by 7 %. In the same period, demand on the free market dropped by 5 % while demand in the captive market dropped by 13 %.

4.4.   Imports from the countries concerned

4.4.1.   Cumulative assessment of the effects of imports from the countries concerned
  • (206) The Commission examined whether imports of CRS originating in the countries concerned should be assessed cumulatively, in accordance with Article 3(4) of the basic Regulation.
  • (207) That provision stipulates that the imports from more than one country should be cumulatively assessed only if it is determined that:
  • (a) the margin of dumping established in relation to the imports from each country is more than de minimis as defined in Article 9(3), and the volume of imports from each country is not negligible; and
  • (b) a cumulative assessment of the effects of the imports is appropriate in light of the conditions of competition between imported products and the like Union product.
  • (208) The margins of dumping established in relation to the imports from each of the two countries concerned are summarised under recitals (140) and (184). They are all above the de minimis threshold laid down in Article 9(3) of the basic Regulation.
  • (209) The volume of imports from each of the countries concerned was not negligible within the meaning of Article 5(7) of the basic Regulation. Market shares in the investigation period were 9,3 % for imports from Turkey and 3,5 % for imports from Russia. After final disclosure, GOR submitted that the Russian market share of 3,5 % was insignificant, a claim which however was unsubstantiated.
  • (210) The conditions of competition between the dumped imports from Turkey and Russia and between the dumped imports from the countries concerned and the like product were similar during the period concerned. More specifically, the imported products competed with each other and with CRS produced in the Union in a similar manner, they are sold through the same sales channels and to similar categories of customers. The product concerned is a commodity and competition took place largely based on prices alone.
  • (211) Therefore, all the criteria set out in Article 3(4) of the basic Regulation were met and imports from Turkey and Russia were examined cumulatively for the purposes of the injury determination.
4.4.2.   Volume and market share of the imports from the countries concerned
  • (212) The Commission established the volume of imports on the basis of Surveillance 2, as explained in Section 4.2.2. The market share of the imports from the countries concerned was established by comparing those imports with the Union consumption with the adjustment with regard to imports from China as explained in recital (202) which had a bearing on Chinese and, thus, total import volumes and therefore also on consumption volumes and market shares.
  • (213) Imports into the Union from the countries concerned over the period considered developed as follows:

Table 2

Import volume (tonnes) and market share on free market
2017 2018 2019 IP
Turkey (tonnes) 84 581 166 295 529 087 796 524
Index (2017 = 100) 100 197 626 942
Market share (%) 0,9 2,0 5,9 9,3
Index (2017 = 100) 100 211 629 997
Russia (tonnes) 112 062 175 772 240 240 300 729
Index (2017 = 100) 100 157 214 268
Market share (%) 1,2 2,1 2,7 3,5
Index (2017 = 100) 100 168 215 284
Total countries concerned 196 643 342 067 769 327 1 097 253
Index (2017 = 100) 100 174 391 558
Market share (%) 2,2 4,1 8,6 12,9
Index (2017 = 100) 100 186 393 589
Source: Surveillance 2 (tonnes) and Eurofer Source: Surveillance 2 (tonnes) and Eurofer Source: Surveillance 2 (tonnes) and Eurofer Source: Surveillance 2 (tonnes) and Eurofer Source: Surveillance 2 (tonnes) and Eurofer
  • (214) Imports from the countries concerned as well as their market share increased by more than five-fold over the period considered. The Union market share of imports from the countries concerned was 12,9 % during the investigation period. Such increase took place despite a safeguard measure being in place during most part of the period considered, due to the fact that, under the safeguard measure, both countries exported the product concerned under the residual quota, which was large enough to allow these increased volumes free-of-safeguard duty into the Union market.
4.4.3.   Prices of the imports from the countries concerned and price undercutting/price depression
  • (215) The Commission established the prices of imports on the basis of Surveillance 2, as explained in Section 4.2.2.
  • (216) The weighted average price of imports into the Union from the countries concerned developed as follows over the period considered:

Table 3

Import prices (EUR/tonne)
2017 2018 2019 IP
Turkey 659 657 616 564
Index (2017 = 100) 100 100 93 85
Russia 639 643 598 548
Index (2017 = 100) 100 101 94 86
Total countries concerned 648 650 611 559
Index (2017 = 100) 100 100 94 86
Source: Surveillance 2 Source: Surveillance 2 Source: Surveillance 2 Source: Surveillance 2 Source: Surveillance 2
  • (217) The average import prices from the two countries concerned remained stable between 2017 and 2018 but then fell by 14 % in two years’ time. Throughout the whole period considered, the average import prices from both countries concerned (together or separately) were constantly lower than the prices of Union producers (see Table 7), and the difference between average EU sales prices of the Union industry and average import prices from the countries concerned almost doubled over the period considered.
  • (218) The Commission also established the price undercutting during the investigation period by comparing:
  • (1) the weighted average prices per product type of the imports from the sampled Turkish and the cooperating Russian producers to the first independent customer on the Union market, established on a cost, insurance, freight (CIF) basis, with appropriate adjustments for post-importation costs; and
  • (2) the corresponding 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 28.
  • (219) 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’ theoretical turnover during the investigation period.
  • (220) After final disclosure, Severstal claimed that there is no legal basis nor a rationale for the application of Article 2(9) of the basic Regulation by analogy to establish the export price for the purpose of calculating undercutting (and underselling). In Severstal view, this would be in breach with Article 3(1) of the basic Regulation. It also noted that the Commission had already been condemned by the General Court in Hansol Paper 29 for this practice. In particular, Severstal submitted that the General Court, in that case, had ruled that the Commission had committed an error by deciding to apply by analogy Article 2(9) of the basic Regulation in the context of the determination of injury, in particular ‘by deciding to deduct SG&A costs and a profit margin, for the resales of the product concerned’ to independent customers, as it is the prices of the product concerned charged to independent customers that are in ‘competition with the like product of the Union industry and which inflicts injury on that industry’ and not hypothetically constructed CIF prices. According to Severstal, that principle had been confirmed by the General Court in Giant 30 and CRIA 31 and, most recently, by the Court of Justice in Hansol 32. Severstal held that the prices charged by its related traders to their unrelated customers were by definition reliable, that such prices compete with those of the Union industry and that they should therefore be used for the purpose of calculating undercutting (and underselling).
  • (221) The Commission rejected the claim that using Article 2(9) by analogy to establish the export price for the purpose of calculating undercutting and underselling is in breach of Article 3(1) of the basic Regulation. In fact, contrary to Severstal claim, in its judgement in Hansol 33 the Court of Justice confirmed the legality of the Commission’s methodology, stating that ‘it was open to the Commission, in order to ensure an objective comparison of the prices at the level of the first release for free circulation in the Union of the product concerned, to construct that CIF EU border value by deducting SG&A costs and a profit margin from the price of resale of the product concerned by Schades to independent customers. That application, by analogy, of Article 2(9) of the basic regulation was within the broad discretion which the Commission enjoys when implementing Article 3(2) of that regulation and could not therefore be regarded, in itself, as vitiated by a manifest error of assessment’ 34. Moreover, since in this case the Union industry predominantly sells directly to independent customers, the methodology followed by the Commission did not lead to a manifestly incorrect result 35.
  • (222) The above showed a weighted average undercutting margin of between 4,2 % and 7,1 % by the imports from Turkey and between 5 % and 20,4 % by the imports from Russia 36. The bulk of CRS is a price sensitive commodity, thus the undercutting margins are significant.
  • (223) The Turkish association CIB and some exporting producers asked the Commission to ensure that comparable products were considered. The methodology used during the investigation, when comparing types of the product concerned exported into the Union and the like product manufactured within the Union, as explained in recitals (218) and (219) is sufficiently refined as to ensure a proper price comparison for the undercutting calculations.
  • (224) The Commission further considered other price effects, in particular the existence of significant price depression. During the period considered, the Union industry decreased its prices by 12 %, thus at a higher level than the drop of the cost of production (- 7 % over the same period) (see Table 7). But for the dumped imports, the Union industry would have been able to raise its prices at least at the level to sell without losses. For instance, in 2019, coinciding with the highest increase in dumped imports, the Union industry had to sell at a price close to the price of the dumped imports, but with significant losses. During the investigation period, the Union industry’s sales prices decreased in parallel with the decrease in the costs of production, but to the level of hardly making any profits.
  • (225) After final disclosure, CIB and several exporting producers submitted that the decrease in sales price from 2019 to the investigation period was less than the decrease in cost of production and that the Union industry even managed to make a profit in the investigation period. That would make the finding of price depression caused by the imports concerned doubtful.
  • (226) The Commission rejected this claim. The fact that the Union industry was able to achieve a 0,4 % profit in the investigation period cannot undermine the Commission’s conclusion of significant price depression caused by the dumped imports. A profitability level just above break-even cannot be considered a healthy profit, which would be achievable in the absence of price pressure from dumped imports. It is clear that such profit levels were the result of the strongly increasing import volumes of CRS from the countries concerned. As explained before, CRS is a commodity sensitive to price competition. Thus, the dumped imports were capable of exercising significant price depression on Union industry sales.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks
  • (227) 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.
  • (228) As mentioned in recital (6), sampling was used for the determination of possible injury suffered by the Union industry from the imports of certain corrosion resistant steels from Turkey and Russia.
  • (229) 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 questionnaire reply of Eurofer relating to all Union producers, cross-checked where necessary with the questionnaire replies from the sampled Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the four sampled Union producers. Both sets of data were duly verified 37 and found to be representative of the economic situation of the Union industry.
  • (230) 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.
  • (231) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.
4.5.2.   Macroeconomic indicators
4.5.2.1.   Production, production capacity and capacity utilisation
  • (232) The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 4

Production, production capacity and capacity utilisation
2017 2018 2019 IP
Production volume (tonnes) 10 915 729 10 870 843 10 757 441 9 797 517
Index (2017 = 100) 100 100 99 90
Production capacity (tonnes) 12 110 762 12 107 279 13 240 172 13 340 130
Index (2017 = 100) 100 100 109 110
Capacity utilisation (%) 90 90 81 73
Index (2017 = 100) 100 100 90 81
Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers
  • (233) The Union industry’s production volume was rather stable between 2017 and 2019 but it dropped by 10 % at the end of the period considered, partly due to the pressure exerted by Turkish and Russian imports which increased by almost 330 000 tonnes in the investigation period as compared to 2019 (table 2).
  • (234) After final disclosure, GOR recalculated the Union industry’s production volume on the basis of the data reported in Tables 5a, 5b, 9 and 12 and, by combining the figures in those tables, it concluded that the Commission had miscalculated the Union industry’s production volumes. However, the source of these tables is not the same; in particular, the volumes reported in Table 9 are from the Union industry’s sample whereas the volumes in the three other tables are from the Union industry as a whole. The claim was therefore rejected.
  • (235) Over the period considered, the production capacity of the Union industry increased by 10 %. However, this increase is theoretical. Union producers use their hot dipped galvanising lines to produce CRS but also other products that are not subject to this investigation. Over the period considered, the share of these production lines that was allocated to CRS production changed for certain producers. The drop in production combined with an increase of production capacity led to a plunge of the capacity utilization rate.
  • (236) After final disclosure, CIB and several exporting producers submitted that the increase in production capacity, and the impact thereof on the capacity utilisation rate, in particular in 2019 was the consequence of erroneous investment decisions. However, as explained in recital (235), that increase was only theoretical. This fact was taken into account by the Commission in its analysis, by giving a limited relevance of this negative factor in the injurious situation of the Union industry.
4.5.2.2.   Sales volume and market share
  • (237) The Union industry’s sales volume and market share developed over the period considered as follows:

Table 5 a

Free market sales volume and market share
2017 2018 2019 IP
Free market sales 6 656 755 6 573 138 6 780 245 6 586 657
Index (2017 = 100) 100 99 102 99
Market share of free market sales (%) 74,0 78,3 75,8 77,3
Index (2017 = 100) 100 106 102 104
Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers
  • (238) The Union industry’s sales volume in the free market was rather stable over the period considered. In terms of sales volumes, at the end of the period considered the Union industry managed to compensate for the impact of the sharp increase of imports from the countries concerned by the extension of the measures against China to circumvented imports 38, which enabled the Union industry to regain some of the sales volumes previously lost due to the Chinese circumvention practices. Coupled with the decrease in consumption, this even resulted in an increase in market share over the period considered.
  • (239) After disclosure, CIB and several exporting producers submitted that the above figures demonstrate that the Union industry did not suffer from a material injury on the account of lost sales or market share.
  • (240) Although indeed the Union industry sales volumes as such only declined slightly and its market share increased in view of a drop in consumption, the Commission disagreed as the strong increase of low-priced imports from Russia and Turkey exerted price pressure, depressing prices and preventing the Union industry from taking full advantage of the anti-dumping measures on imports of CRS from China.

Table 5 b

Captive volume and market share
2017 2018 2019 IP
Captive market 2 504 391 2 667 375 2 358 802 2 167 741
Index (2017 = 100) 100 107 94 87
The share of captive market over the total Union production (%) 22,9 24,5 21,9 22,1
Index (2017 = 100) 100 107 96 96
Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers Source: Eurofer, sampled Union producers
  • (241) The captive market of the Union industry (composed of CRS kept by the Union industry for downstream use, in particular for organic coated steel production) in the Union decreased by 13 % in the period considered. The fall is attributable to the decrease in demand of organic coated steel downstream products in the second part of the period considered, despite the rebound of the home appliances sector during the last quarter of 2020 39.The market share of the captive market over the total Union production decreased by 0,8 % percentage points overall during the period considered.
4.5.2.3.   Growth
  • (242) The above figures in respect of production and, less pronounced, sales in the free market show a decreasing trend as from 2017. As already referred to in recital (238), the Union industry’s increase in market share was due to the registration of certain Chinese imports upon initiation of the anti-circumvention investigation concerning such imports 40, which ended the significant imports from China and allowed the Union industry to compensate for part of sales lost to Russian and Turkish imports.
4.5.2.4.   Employment and productivity
  • (243) Employment and productivity developed over the period considered as follows:

Table 6

Employment and productivity
2017 2018 2019 IP
Number of employees 8 389 8 731 9 751 9 238
Index (2017 = 100) 100 104 116 110
Productivity (tonnes/employee) 1 301 1 245 1 103 1 061
Index (2017 = 100) 100 96 85 82
Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers Source: Eurofer and sampled Union producers
  • (244) Over the period considered, the level of Union industry employment related to the production of CRS fluctuated and increased by 10 %. However, some fluctuations are theoretical as they are the result of the methodologies used to allocate the resources starting from a product family broader than CRS (namely all hot dipped galvanised products).
  • (245) The productivity of Union industry decreased by 18 % over the period concerned. This fall is explained by the drop in production volumes and the methodology used to establish the number of employees involved in CRS activities.
4.5.2.5.   Magnitude of the dumping margin and recovery from past dumping
  • (246) All dumping margins were above the de minimis level and most of them significantly higher. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the countries concerned.
  • (247) Corrosion resistant steels have already been subject to anti-dumping investigations. The Commission found that, during the period 1 October 2015 to 30 September 2016, the situation of the Union industry was significantly affected by dumped imports of CRS originating in the People’s Republic of China (‘PRC’). Provisional anti-dumping measures on imports from PRC were imposed in August 2017 41 and definitive measures were confirmed in February 2018 42.
  • (248) In August 2020, an anti-circumvention investigation of the anti-dumping measures of imports originating in the PRC extended the measures to slightly modified certain corrosion resistant steels 43.
  • (249) The recovery of the Union industry from past dumping practices was thus ongoing when the present investigation started.
4.5.3.   Microeconomic indicators
4.5.3.1.   Prices and factors affecting prices
  • (250) The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 7

Sales prices and cost of production in the Union
2017 2018 2019 IP
Average unit sales price on the free market (EUR/tonne) 662 674 616 584
Index (2017 = 100) 100 102 93 88
Unit cost of production (EUR/tonne) 622 664 638 578
Index (2017 = 100) 100 107 103 93
Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers
  • (251) After the imposition of anti-dumping measures against Chinese imports in 2017, the Union producers could increase their sales prices in the Union by 2 % from 2017 to 2018. However, subsequently, the unit sales price on the free market decreased by 14 % between 2018 and the investigation period, resulting in a decrease of overall 12 % over the period considered.
  • (252) The unit cost of production increased by 7 % between 2017 and 2018, but decreased after 2018, resulting in an overall decrease of 7 % over the period considered. The prices of some main raw materials decreased significantly in the second half of the period considered.
  • (253) In its comments to the final disclosure, CIB and several exporting producers pointed at the fact that, from 2019 to the investigation period, the drop in cost of production was more pronounced than the continuing fall in the Union industry’s sales prices. However, the Commission observed that during the period considered, the Union industry decreased its prices by 12 % which is more than the drop of the cost of production (-7 % over the same period). Indeed, the Union industry’s low prices including during the investigation period severely influenced the Union industry’s financial results, as Table 10 below shows.
4.5.3.2.   Labour costs
  • (254) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 8

Average labour costs per employee
2017 2018 2019 IP
Average labour costs per employee (EUR) 32 916 33 372 33 007 31 075
Index (2017 = 100) 100 101 100 94
Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers
  • (255) The average labour costs per employee of the sampled Union producers fell by 6 % at the end of period considered.
4.5.3.3.   Inventories
  • (256) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 9

Inventories
2017 2018 2019 IP
Closing stocks (tonnes) 170 054 166 651 173 225 107 317
Index (2017 = 100) 100 98 102 63
Closing stocks as a percentage of production 5,9 5,3 6,0 3,9
Index (2017 = 100) 100 90 101 65
Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers
  • (257) During the period considered the level of closing stocks decreased by 37 %. The Union producers usually only keep a low level of stock themselves. Therefore, stocks are not considered to be an important injury indicator for this industry. This is also confirmed by analysing the evolution of the closing stocks as a percentage of production. As can be seen above, this indicator remained relatively stable between 2017 and 2019, although it then fell. In the investigation period, temporarily some producers produced less and reduced stocks in an effort to cope with their difficult financial situation in 2019 and 2020 (see Table 9).
4.5.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital
  • (258) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 10

Profitability, cash flow, investments and return on investments
2017 2018 2019 IP
Profitability of sales in the Union to unrelated customers (% of sales turnover) 6,2 2,1 -2,6 0,4
Index (2017 = 100) 100 34 -42 6
Cash flow (EUR) 120 781 208 101 695 104 16 255 709 104 970 075
Index (2017 = 100) 100 84 13 87
Investments (EUR) 16 168 844 22 074 194 27 064 986 39 876 721
Index (2017 = 100) 100 137 167 247
Return on investments (%) 4,1 2,0 -1,1 0,6
Index (2017 = 100) 100 49 -27 16
Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers Source: Sampled Union producers
  • (259) The Commission established the profitability of the sampled Union producers 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. Overall profitability fell from 6,2 % in 2017 to 0,4 % in the investigation period. This drop coincides with the massive increase of import volumes from the countries concerned (see Table 2) at prices lower than the Union industry’s prices (see Tables 3 and 7).
  • (260) After final disclosure, CIB and several exporting producers pointed at the positive development of the Union industry’s profitability between 2019 and the investigation period (2020) and the upward trend in 2020 44. Moreover, these parties underlined that the profitability in the investigation period could not be considered as representative due to the impact of the COVID-19 measures on production volumes at the beginning of 2020 and the drop in the market of automotive CRS, which is outside the product scope in this investigation but produced on the same equipment, in 2020.
  • (261) The Commission noted that, as mentioned in recital (24) above, the choice of the period considered was appropriate bearing in view of the date the complaint was lodged and the applicable rules and that the Commission’s analysis is not made on a comparison of the base year with the investigation period but on trends throughout the period concerned. Fluctuations within a 12 months’ period are not unusual. Moreover, the impact of the COVID-19 pandemic and of the evolution of demand in the automotive sector were fully considered in the causation analysis in Sections 5.2.7 and 5.2.4 of this Regulation.
  • (262) The net cash flow is the ability of the Union producers to self-finance their activities. The net cash flow evolved to a large extent in line with profitability and return on investment. The net cash flow remained rather stable in 2017 and 2018, shrank in 2019 following the losses made by Union producers that year, and then recovered to a level close to the one at the beginning of the period considered.
  • (263) Investments are the net book value of assets. The net investments showed a continuous increase over the period considered and more than doubled over the period considered. In general, the investments aimed at retaining the existing capacities, at improving quality and at making due replacements of necessary production assets. Some related to health, safety and environmental matters. Significant investments in the second half of the period considered concern one sampled Union producer and the upstream phase of its CRS production.
  • (264) CIB and several exporting producers claimed after final disclosure that the increase in investments demonstrates that the Union industry is not injured. The claim was rejected. The investments, even if increasing over the period considered, were overall at low levels and, as mentioned, they were generally limited to necessary expenses to keep operations ongoing. The Commission therefore did not consider that its positive development detracts from the injury found in other areas.
  • (265) The return on investments is the profit in percentage of the net book value of investments which reflects the level of depreciation of assets. It decreased continuously and became negative in 2019, when the sampled Union producers made losses globally. It became slightly positive during the investigation period but was far lower than at the beginning of the period considered.
  • (266) The poor financial performance of the Union industry over the period considered limited its ability to raise capital. The Union industry is capital intensive and requires substantial investments. The return on investment during the period considered was too low to cover for such substantial investments.
4.5.4.   Conclusion on injury
  • (267) The evolution of the micro and macro indicators during the period considered showed that the financial situation for the Union industry deteriorated.
  • (268) The increase of production capacity (+ 10 %) is theoretical and derives from the Union industry allocating more capacity to CRS production as a result of a lower demand of other products manufactured in the same lines as CRS. The same occurred to employment (+ 10 %). As to investments (+ 147 %), the bulk results from allocations of investments made in the upstream phase of CRS production. The increase of the Union industry’s market share (+ 3,2 %) over the period considered is attributable to the initiation and outcome of the anti-circumvention investigation against China referred to in recital (202).
  • (269) The Union industry endeavoured to keep its CRS sales volumes to unrelated customers in the Union (-1 %) in a context of a decreasing consumption in the free market (-6 %). However, the Union industry could only do this and respond to the price pressure exerted by the increasing dumped imports from the countries concerned by lowering its sales prices. During the period considered, the Union industry decreased it prices more than the drop of the cost of production.
  • (270) Such low prices severely influenced the Union industry’s results, which fell from of profit of 6,2 % in 2017 to losses in 2019 and basically no profit at the end of the period considered. Other financial indicators, such as cash flow and return on investment, followed a similar trend.
  • (271) On the basis of the above, the Commission concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

5. CAUSATION

  • (272) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the countries concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the countries concerned was not attributed to the dumped imports. These factors are: imports from other third countries, the export performance of the Union industry, the evolution of demand, captive use, self-inflicted injury, COVID-19 pandemic and hot-rolled coils prices.

5.1.   Effects of the dumped imports

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