Commission Implementing Regulation (EU) 2023/935 of 11 May 2023 imposing a definitive anti-dumping duty on imports of high tenacity yarns of polyesters originating in the People’s Republic of China and produced by Zhejiang Hailide New Material Co., Ltd

• (118) Hailide claimed in its response to the Notes that the GTA data concerning the main raw materials for HTYP production is inaccurate, when compared to the statistics from the official data portal of the Turkish Statistical Institute. The Commission noted that the data reported in GTA system for Türkiye is based on the general trade view while the data that was gathered from the official Turkish statistics is based on a special trade view (which excludes goods that enter or exit a free trade zone or bonded warehouse). Hence the differences in figures are duly justified and cannot render the GTA data unreliable. Therefore, Hailide cannot validly claim that the GTA data are inaccurate and its argument has to be dismissed.

• (119) Hailide further submitted in response to the Second Note that the prices for raw materials in Türkiye, disclosed in Annex I (List of factors of production and their prices in Türkiye) are inconsistent with the prices disclosed for Türkiye in Annex II (Comparison of import statistics for potential representative countries). The Commission noted that the statistics in Annex II are only raw data for the purposes of comparison between different countries aggregated at the common HS6 level without including the applicable customs duties for individual importing countries. The data in Annex I on the other hand outlines values at the level of Turkish national tariff codes and includes the customs duties as well. Therefore, the price levels in Annex I and Annex II are not intended to be identical and the argument of the party has to be dismissed as unfounded. Further to the final disclosure, Hailide claimed that no calculation worksheet was provided in relation to the adjustment for import duties in Annex I, which led to an inadequate disclosure by the Commission. It was observed by the Commission that the data including prices of factors of production in Türkiye has been generated automatically from GTA at the level of Turkish national tariff codes (including all conventional and preferential customs duties based on the Market Access Map database – MacMap), it was duly disclosed and was used in this case by the Commission without further modification. It was noted that no additional calculation worksheet or the like was produced by the Commission for this purpose. Hence, Hailide’s claim has to be dismissed.

• (120) Hailide claimed that Türkiye is not appropriate to be selected as a representative country. The company submits that, first, the currency depreciation and high inflation led to abnormal market conditions in Türkiye which inevitably impacted the local costs and which in turn made Türkiye manifestly unsuitable as a representative country. Hailide reiterated its claim in response to the final disclosure, adding that local prices and/or import prices affected by significant local currency depreciation into Türkiye cannot reflect undistorted prices or benchmarks. Second, according to Hailide, Kordsa Türkiye cannot be considered a producer of HTYP destined to the open market, as its limited polyester yarn production capacity is mainly, if not exclusively, used for captive use in its own downstream tire cord fabric production. In the same vein, a group of users claimed that Kordsa Türkiye uses HTYP mostly for its own production for materials used in tires. Hailide claimed that HTYP is only marginal and subordinate business in support of cord fabric and that the biggest majority, if not all, of the external revenues in the segment “Industrial yarn and cord fabric” relate to revenue from sales of industrial fabrics and nylon yarn, and not of HTYP. Hailide reiterated this argument in its response to the final disclosure. The parties concluded that the financial result of the company is thus not representative of a HTYP producer and hence there is no financial information readily available for HTYP operation in Türkiye. Third, Hailide maintained that Kordsa Türkiye produces only one specific type of HTYP (high value-added HMLS for automotive use), which makes it unsuitable for representative country purpose, as the operational result from one single product type is not representative of that concerning Chinese HTYP producers which produce a wide range of product types. In conclusion, Hailide submitted that the Commission should disregard the profit margin of Kordsa Türkiye and use a more reasonable profit margin representative of Chinese HTYP producers. Hailide maintained in its response to the final disclosure that the profit level of 15,3 % established by the Commission is excessively high for an HTYP producer and that a maximum of 6 % (equal to the target profit margin for sampled Union producers in the present case, established by applying Article 7(2c) of the basic Regulation) is thus a reasonable proxy for the undistorted and reasonable profit that an HTYP producer can normally achieve.

• (121) The Commission observed that the choice of the representative country was based on the three criteria: level of economic development, production of the product concerned and availability of relevant public data. A potential impact of a devaluing currency or inflation level is not among those criteria. In any event, the submitting party has not demonstrated how the depreciation of the Turkish Lira and high inflation would actually have affected the prices of inputs sourced in Türkiye, and if so what the real impact on the normal value that is calculated in CNY would be. Moreover, the parties did not provide any information indicating that (and to what extent) Turkish lira would be used in import transactions for raw materials forming a basis for establishing the undistorted cost benchmarks in this case. In addition, when establishing benchmarks on the basis of import prices for the calculation of normal value under Article 2(6a)(a) of the basic Regulation, the import values into the representative countries are ultimately converted into the currency of the exporting country, i.e. in this case CNY. Therefore, the Commission found that this claim was unsubstantiated and rejected it.

• (122) Regarding Kordsa Türkiye’s product portfolio and source of revenues, the Commission noted that in the event when no financial information is readily available specifically and solely in relation to product concerned by investigation (in this case HTYP), which is rarely the case, the Commission seeks to identify the closest readily available proxy, including consolidated information of producer(s) active, among others in the business of the product concerned. In this case, as outlined in recital (112), approximately 86 % of Kordsa Türkiye’s external revenues in 2021 were generated in the segment covering HTYP. Furthermore, contrary to what the parties submit, Kordsa Türkiye does indeed generate external revenue by producing and selling also polyester yarn ⁷⁹. In fact, Kordsa is “[o]ne of the leaders of the […] HMLS polyester yarn market”, with “a portfolio of yarns that are suitable for use in such applications as cord fabrics, heavy-duty textiles, industrial fabrics, chafer fabrics, single-end cords and ropes” ⁸⁰, hence for use also in industries other than the automotive industry. This makes the parties’ argument on captive use of HTYP unfounded. Moreover, tire reinforcement is one of the main applications for HTYP and the Chinese HTYP producers, including Hailide also produce HMLS yarn and serve customers in the automotive industry. Hence it would be misleading to state that Kordsa Türkiye’s HTYP business is unrepresentative of the business activities of the Chinese HTYP producers. Lastly, the parties did not propose as an alternative to Kordsa Türkiye any other suitable HTYP producer with readily available financial data specifically and solely for HTYP, let alone a HTYP producer with wider HTYP portfolio than that of Kordsa Türkiye.

• (123) In these circumstances, the consolidated SG&A and profit identified for Kordsa Türkiye are therefore deemed sufficiently representative and suitable to be applied for the purposes of the present investigation and the arguments of the parties have to be dismissed. It was further observed that, the target profit of 6 % proposed to be used by Hailide and the profit in the representative country refer to different concepts governed by different rules prescribed in different legal provisions. In particular, the target profit is the profit achieved by the Union industry for domestic sales in the Union under normal conditions of competition and it is used to calculate the injury margin under Article 9(4) of the basic Regulation. The profit in the representative country is used in the calculation of normal value by reference to the appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation. This profit must reflect the profit achieved by a company producing the product under investigation or a similar product, in a representative country. Since the concept of the target profit and of profit in a representative country are not comparable, the claim of Hailide was dismissed as irrelevant. Moreover, Hailide provided no evidence suggesting that the amount for profit included in the constructed normal value was not undistorted and reasonable within the meaning of Article 2(6a)(a).

• (124) Hailide took the view that the Commission should select Brazil as the suitable representative country instead of Türkiye, given that financial data are readily available for Kordsa group company in Brazil and because Brazil had hardly any imports from China concerning the key inputs for production of the HTYP (PTA, MEG, PET chips) compared to Türkiye in 2021 and therefore is less likely affected by the alleged distortions. Hailide reiterated this argument in its response to the final disclosure, adding that if Kordsa Türkiye’s annual report for 2021 at company group consolidated level is acceptable as source for establishing the undistorted SG&A and profit in Türkiye, the same equally applies to Kordsa Brazil since the consolidated accounts also include the operational result of Kordsa Brazil.

• (125) First, financial data for Kordsa Brazil is only available for 2019, while the period under investigation in the present case, which is of primary relevance, covers the year 2021. In addition, as outlined above, readily available and profitable data exist in relation to Kordsa Türkiye for 2021. While the financial statement of Kordsa Türkiye for 2021 used for the purposes of this case consolidates also the data of its subsidiaries, including Kordsa Brazil, it is evident that the profit and SG&A figures in the consolidated statement are more representative of Kordsa Türkiye’s operations rather than operations of Kordsa Brazil. This is because the revenue generated by the Europe-Middle East-Africa geographical segment (covering solely operations in Turkey) is almost three times higher than the revenues generated by Kordsa Brazil (representing the South American segment) ⁸¹. In any event, Article 2(6a)(a) of the basic Regulation requires that the amount for administrative, selling and general costs and for profits included in the constructed normal value is undistorted and reasonable. Hailide adduced no evidence demonstrating that this is not the case. Second, while the proportion of undistorted import quantities on the total imports for PET chips, PTA and MEG into Türkiye was lower than that of the undistorted imports into Brazil, the total quantity of undistorted imports for each of these inputs into Türkiye was significantly higher than the total quantity of undistorted imports into Brazil. In fact, while Brazil may have sufficiently representative data on PET chips and MEG imports available, this does not apply to the PTA imports, which were insignificant compared to Türkiye and accounted only for around 7 % of the PTA imports into Türkiye. The argument submitted by Hailide therefore has to be rejected.

• (126) Regarding the SG&A of Kordsa Türkiye, which is to be applied in the present case to construct the normal value, Hailide submitted that to ensure fair comparison between the constructed normal value and the export price, the packaging expenses, which according to Hailide form part of the SG&A (based on the Note 21 to the Kordsa Türkiye financial statements) should be excluded.

• (127) First, the Commission took the profit and loss statement and operating items listed therein as a basis for calculating the SG&A costs for Kordsa Türkiye. Note 21 to the financial statements, referred to by Hailide lists ‘Expenses by nature’, which evidently cover not only the operating expenses, but also the material costs, including packaging costs included in the cost of goods sold. Simple comparison of the total of operating expenses in the profit and loss statement and of the total of the expenses in Note 21 also shows that the latter amount is significantly higher. It would therefore be manifestly wrong to extrapolate from the mere reference to Note 21 in the profit and loss statement part listing operating items that all expenses outlined in Note 21 correspond to the operating expenses. In view of the above, the argument made by Hailide has to be rejected.

• (128) Furthermore, a group of users urged the Commission to use Chinese exporting producers’ own SG&A and profit to calculate the normal value.

• (129) The Commission noted that once the existence of significant distortions for the exporting country is established in accordance with Article 2(6a)(b) of the basic Regulation, the normal value is constructed by reference to undistorted prices or benchmarks in an appropriate representative country (in this instance Türkiye) for each exporting producer according to Article 2(6a)(a). The Commission underlines that this provision also specifically requires that the constructed normal value includes a reasonable amount for undistorted SG&A costs and profit in the appropriate representative country. Once the Commission establishes the existence of the significant distortions affecting the product under investigation in the exporting country, it is prevented from using the actual SG&A costs and profit of individual exporting producers as, as a result, they were found to be distorted. Hailide did not provide any evidence that its actual SG&A costs and profit were undistorted. Therefore, this claim is rejected.

3.3.4.   Sources used to establish undistorted costs

• (130) On the basis of the information submitted by interested parties and other relevant information available on the file, the Commission established, in the First Note, an initial list of factors of production such as materials, energy and labour, used for the production of the product under investigation.

• (131) In accordance with Article 2(6a)(a) of the basic Regulation, the Commission also identified sources to be used for establishing undistorted prices and benchmarks. The main source that the Commission proposed to use included the Global Trade Atlas (‘GTA’). Finally, the Commission identified the Harmonised System (‘HS’) codes of the FOPs which in the First Note were initially considered to be used for the GTA analysis on the basis of information provided by the interested parties.

• (132) The Commission invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production (‘FOP’) mentioned in the First Note. Subsequently, in the Second Note, the Commission updated tariff classification information on and expanded the list by a number of FOPs based on the comments received from the interested parties.

• (133) In view of the above, the following FOPs and their sources were identified with regard to Türkiye, in order to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of HTYP

Factor of Production	Tariff line	Source of data the Commission intends to use Raw materials	Prices (CNY)	Prices (CNY)
Purified terephthalic acid (PTA)	291736 00 0011	Global Trade Atlas (GTA)82 Market Access Map, International Trade Centre (MacMap)83	4,91 CNY/Kg	4,91 CNY/Kg
Mono-ethylene glycol (MEG)	290531	Global Trade Atlas (GTA) Market Access Map, International Trade Centre (MacMap)	4,73 CNY/Kg	4,73 CNY/Kg
Poly(ethylene terephthalate) (PET) chips	390769	Global Trade Atlas (GTA) Market Access Map, International Trade Centre (MacMap)	7,14 CNY/Kg	7,14 CNY/Kg
Spinning Finish Oil	340311 340391	Global Trade Atlas (GTA) Market Access Map, International Trade Centre (MacMap)	17,41 CNY/Kg	17,41 CNY/Kg
Labour	Labour	Labour	Labour	Labour
Labour	[N/A]	Turkish Statistical Institute84	37,83 CNY/Manhour	37,83 CNY/Manhour
Energy	Energy	Energy	Energy	Energy
Electricity	[N/A]	Turkish Statistical Institute	Consumption band (MWh)	Consumption band (MWh)
Electricity	[N/A]	Turkish Statistical Institute	T > 150 000	0,47 CNY/kWh
Gas	[N/A]	Turkish Statistical Institute	Consumption band (m3 ) 2 610 000 ≤ T < 26 100 000 1,63 CNY/m3	Consumption band (m3 ) 2 610 000 ≤ T < 26 100 000 1,63 CNY/m3
By-product/Waste	By-product/Waste	By-product/Waste	By-product/Waste	By-product/Waste
Waste yarn	550510 30 0011 550510 30 0019	Global Trade Atlas (GTA) Market Access Map, International Trade Centre (MacMap)	3,15 CNY/Kg	3,15 CNY/Kg

3.3.5.   Raw materials used in the production process

• (134) In order to establish the undistorted price of raw materials, the Commission used as a basis the weighted average import price (CIF) to the representative country, as reported in the GTA, from all third countries excluding China and countries that are not members of the WTO and listed in Annex I of Regulation (EU) 2015/755 ⁸⁵. The Commission decided to exclude imports from China as it concluded that it is not appropriate to use domestic prices and costs in China due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation (see recital (97) above). In the absence of any evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected exports. The weighted average import price was adjusted for import duties, where applicable. After excluding imports from the PRC and countries which are not members of the WTO into the representative country, the volume of imports from other third countries remained representative.

• (135) The Commission expressed the transport cost incurred by the cooperating exporting producer for the supply of raw materials as a percentage of the actual cost of such raw materials and then applied the same percentage to the undistorted cost of the same raw materials in order to obtain the undistorted transport costs. The Commission considered that, in the context of this investigation, the ratio between the exporting producer’s raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory.

• (136) For a small number of FOPs, due to their insignificant share in the total raw material costs in the IP, regardless of the source used, the Commission treated those FOPs as consumables, as explained in recital (146).

3.3.5.1.   Labour

• (137) To establish the benchmark for labour costs the Commission used the most recent statistics published by the Turkish Statistical Institute ⁸⁶. This institute publishes detailed information on labour costs in different economic sectors in Türkiye. The Commission established the benchmark based on hourly labour costs for 2020 for the economic activity Manufacture of chemicals’ NACE code 20 according to NACE Rev.2 classification. The values were further adjusted for inflation using the domestic consumer price index ⁸⁷ to reflect the costs for the investigation period. Compared to the Second Note and following a claim raised by Hailide, the benchmark value for labour was modified to take account of the annual average inflation rate.

3.3.5.2.   Energy

• (138) To establish the benchmark price for electricity and gas, the Commission used prices for companies (industrial users) in Türkiye published by the Turkish Statistical Institute ⁸⁸. The benchmark was established based on the price for electricity and gas, published on 31 March 2022. The price referred to is the average for 2021. The Commission used the data on the industrial electricity and gas prices in the corresponding consumption bands, net of VAT.

• (139) Hailide argued that in addition to the VAT applied on electricity and gas prices identified for Türkiye, the electricity prices include additional taxes and fees (consumption tax, TRT and Energy Fund fees), which should be deducted by the Commission for the purposes of establishing benchmark cost of electricity. First, it was noted that there is no evidence on the file showing that (and to what extent, if any) companies in Türkiye would have recovered any of the said taxes and fees, hence meriting any deduction from the benchmark costs. Moreover, Hailide failed to substantiate its claim specifically with respect to the dataset published by the Turkish Statistical Institute and used for the purposes of this case.

• (140) CIRFS submitted in response to the final disclosure that the Commission should explain, why the 2021 price of gas in Türkiye selected for the purpose of the normal value calculation has significantly decreased, while according to the Turkish Statistical Institute, the average unit price of natural gas in Türkiye sharply increased in 2021 compared with 2020. As already outlined in the disclosed Second Note, the Commission sourced the data on gas prices directly from the database of the Turkish Statistical Institute, using average prices for 2021 for the respective consumption bands, while converting the figures from Turkish Lira to the RMB using the applicable official exchange rate in order to construct the normal value for the exporting producers.

• (141) Furthermore, CIRFS stated in response to the final disclosure that the Commission should explain with respect to gas the methodology used to select the most appropriate consumption band for each Chinese producer. It was noted in this respect that, as outlined in recital (138), the Commission attributed to Hailide the gas cost in the consumption band corresponding to its actual total gas consumption over the IP.

3.3.6.   SG&A and profits

• (142) According to Article 2(6a)(a) of the basic Regulation, “the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits”. In addition, a value for manufacturing overhead costs needs to be established to cover costs not included in the factors of production referred to above.

• (143) For establishing an undistorted and reasonable amount for SG&A and profits, the Commission used the SG&A (6,6 %) and profit (15,3 %) of the HTYP producer in Türkiye, Kordsa Türkiye, for which figures relating to 2021 financial data (i.e. for the period fully overlapping with the IP) were readily available.

3.3.7.   Calculation of the normal value

• (144) Based on the undistorted prices and benchmarks described above, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

• (145) First, the Commission established the undistorted costs of manufacturing for Hailide based on the factors of production purchased by the company and identified in Table 1. The Commission then applied the undistorted unit costs to the actual consumption of the individual factors of production of Hailide. The Commission reduced the costs of manufacturing by the undistorted revenues generated for by-product (in this case waste yarn) resold.

• (146) Second, to arrive at a total undistorted cost of manufacturing, the Commission added manufacturing overheads. Manufacturing overheads incurred by Hailide were increased by the costs of consumables referred to in recital (136) and subsequently expressed as a share of the costs of manufacturing actually incurred by Hailide. This percentage was applied to the undistorted costs of manufacturing.

• (147) Finally, the Commission added SG&A and profit, determined on the basis of the Turkish HTYP producer (see recital (143)). SG&A and profit, both expressed as a percentage of the cost of goods sold and applied to the undistorted total cost of manufacturing, amounted to 6,6 % and 15,3 % respectively.

• (148) On that basis, the Commission determined the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

• (149) Hailide claimed in response to the final disclosure that the Commission groundlessly linked the value of consumables and manufacturing overheads to that of other inputs. According to Hailide, the Commission shall identify the benchmark for the consumables and manufacturing overheads separately from other inputs or, otherwise accept the company’s actual cost for consumables and manufacturing overheads. Similar claim was raised by Hailide with respect to the construction of the transport cost for the supply of raw materials.

• (150) As explained in recital (97) the investigation found that prices or costs of the product under investigation, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation. Hailide failed to demonstrate that the prices of its consumables, its manufacturing overheads or its transport cost are not distorted. It could not be positively established that these costs are not distorted and therefore, in view of third indent of the second paragraph of Article 2(6a)(a) they cannot be used in the construction of the normal value. The Commission was unable to find any reasonable benchmark for these costs, nor any reasonable benchmark for these costs were suggested by Hailide or any other interested party. When appropriate benchmarks cannot be found for a cost, the Commission may in principle establish them as a ratio to the cost group they relate to (be it cost of all raw materials or the manufacturing costs). Once the undistorted costs of raw materials or manufacturing costs are established, the Commission will apply the benchmark to estimate the undistorted cost in question, thereby preserving the exporting producer’s cost structure. This means that if, for instance, consumables represent 1 % of all raw materials costs in the accounts of an exporting producer, following construction of the normal value they will still represent 1 % of the raw material costs.

• (151) As set out in recital (146), in order to arrive at undistorted cost of consumables and overheads, Hailide’s share of cost of consumables as well as manufacturing overheads on the costs of manufacturing actually incurred was applied to the undistorted costs of manufacturing. As explained in recital (150), in the absence of a specific data concerning undistorted overhead in the available financial data of the producer(s) in the representative country, the Commission determined the undistorted overhead data for the exporting producer following this method. Furthermore, given that numerous factors of production typically accounting for an insignificant share on the total raw material costs were identified in this case, the Commission deemed it reasonable to include such inputs (again using Hailide’s actual costs) among consumables and treat them accordingly. Moreover, regarding the transport costs, as outlined in recital (135) and in the absence of data in the file on the undistorted transport costs in the representative country, the Commission considered the ratio between the exporting producer’s raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory. Hailide’s claim was therefore rejected.

3.4.   Export price

• (152) Hailide exported the product concerned directly to independent customers in the Union as well as through a related company located in Hong Kong. The export price for Hailide 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. Regarding the sales via the related company in Hong Kong, please see recitals (162)-(163) below for further details.

• (153) Furthermore, Hailide also sold the product concerned to the Union through an additional related company in the Union acting as an importer. For these sales, the export price was constructed 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. The adjustments made related to all costs incurred between importation and resale, including the SG&A expenses of the related importer located in the Union, and a reasonable profit (established at 6,89 % in the recent polyvinyl alcohols (‘PVA’) investigation ⁸⁹ for another chemical product and used in the present investigation given the similarity of the industry and the lack of cooperation from unrelated importers), in order to establish a reliable export price at the Union frontier level.

• (154) Hailide stated in response to the final disclosure that the application of the notional profit level of 6,89 % from recent investigation concerning PVA is groundless and overstated. Hailide submitted that PVA and HTYP do not share similar chemical or physical characteristics, they have different end use and end users and the markets for the two products are distinct. Therefore, according to Hailide, the profit in PVA sector is in no way representative of what a company can achieve in trading HTYP. Furthermore, Hailide argued that if the profit level that Union HTYP producers can obtain in the normal market conditions without dumped imports is less than 6 %, it would be odd that traders of this product can achieve higher profit in the same market.

• (155) Furthermore, CIRFS also considered that the notional profit used is not an appropriate benchmark for the HTYP case, arguing contrary to Hailide’s position that such profit margin largely underestimates profit of importers in the HTYP sector. Instead, CIRFS suggested that there is a more recent case involving man-made fibres, which would better represent the profit margin of unrelated importers, namely the optical fibre cables (‘OFC’) case ⁹⁰ which was between 15-25 %. Moreover, CIRFS submitted that the Commission should not encourage the non-cooperation from unrelated importers by underestimating the profit margin. Instead, the Commission should according to CIRFS adopt a proactive approach by accessing the financial reports of the known importers and relying on these reports as the best facts available.

• (156) First, as stated in recital (153), in the absence of cooperation from unrelated importers in the present case, the Commission resorted to the use of a notional profit from a recent investigation in the chemical industry, establishing that such profit was considered reasonable. Second, Hailide’s comparison of a trader’s profit with a profit that Union producers could obtain is unfounded given the fundamental differences in the activities of a manufacturing company as opposed to a trading company.

• (157) Further to the similarity of PVA and HTYP, while it is not disputed that PVA and HTYP have different chemical and physical characteristics, uses, users and markets it is an established fact that both products are part of a chemical industry. Moreover, Hailide failed to substantiate why the nominal profit used would not be representative of a profit achieved by a trader of HTYP. Therefore, the Commission concluded that the profit in PVA sector is representative of what a company can achieve in trading HTYP. On the other hand, the optical fibre cables as well as the main raw material used in their production (optical fibre) are used in telecommunication industries without even a remote link to chemical industry. Therefore, it would be inappropriate to apply in the present HTYP investigation profit margins for unrelated importers used in the OFC case.

• (158) Moreover, contrary to what CIRFS suggested, the Commission only resorted to use of a notional profit from PVA case after it encouraged unrelated importers to come forward and cooperate with the investigation (whether by specifically inviting the known importers to take part in a sampling exercise or by publishing on the website dedicated questionnaire intended for the unrelated importers willing to cooperate) and following the absence of any such cooperation. Hence, the Commission could not possibly encourage non-cooperation from unrelated importers by underestimating the profit margin ultimately used.

• (159) With respect to the identification and use of importers’ publicly available financial data, as an established practice, the Commission uses for determining a reasonable profit (for instance under Article 2(9)) duly verified Union profitability data compiled and collected specifically for the purposes of its investigations. Such data, if available, is usually considered to be more reasonable. Therefore, the arguments raised by Hailide and CIRFS have to be dismissed.

3.5.   Comparison

• (160) The Commission compared the normal value and the export price of Hailide on an ex-works basis.

• (161) In order to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments to the export price were made for transport, insurance, handling and loading, discounts, commission, credit costs, bank charges and other import charges.

• (162) Furthermore, Hailide exported part of its HTYP to the Union through a related trader located outside the Union, in Hong Kong, namely through HALEAD (H.K.) CO., LIMITED (‘Halead’).

• (163) Consequently, in order to ensure a fair comparison in accordance with the chapeau of Article 2(10) of the basic Regulation, an adjustment under Article 2(10)(i) in particular was made for sales through this related trading company of Hailide group. The adjustment consists of the deduction of SG&A of the trading company and of a notional 6,89 % profit identified for this case (see recital (153) above).

• (164) Hailide argued in its response to the final disclosure that the export price of Halead shall not be adjusted by deducting the SG&A of the trading company and a notional profit of 6,89 %. Hailide claimed that the related trader shall be treated as part of Hailide and that the role played by it has nothing similar to the functions of an agent working on a commission basis, outlining number of reasons in the sensitive version of its response to the final disclosure in support of the claim.

• (165) In this respect, the Commission noted that, pursuant to Article 2(10) of the basic Regulation, a fair comparison must be made between the export price and the normal value. That provision states that, where the normal value and the export price are not on such a comparable basis, due allowance, in the form of adjustments, is to be made, on the merits, for differences in factors which are claimed, and demonstrated, to affect prices and price comparability. Among the factors for which adjustment can be made, Article 2(10)(i) of the basic Regulation provides in particular that an adjustment is to be made for differences in commissions paid in respect of the sales under consideration. That provision states that the term ‘commissions’ is to be understood to include the mark-up received by a trader of the product or the like product if the functions of such a trader are similar to those of an agent working on a commission basis. However, an adjustment under Article 2(10)(i) of the basic Regulation cannot be made where the producer established in a third State and its related distributor responsible for exports to the European Union form a single economic entity (‘SEE’).

• (166) In the analysis of whether there is a single economic entity between a producer and its related distributor, it is crucial to consider the economic reality of the relationship between that producer and that distributor. In view of the requirement of a conclusion reflecting the economic reality of the relationship between that producer and that distributor, the Commission is required to take account of all factors relevant to the determination as to whether or not that distributor carries out the functions of an integrated sales department within that producer or, in turn performs other type of functions. In accordance with the need to have regard to all relevant factors and the general discretion afforded to the Commission to assess complex economic situations, the Commission must carry out its assessment on a case-by-case basis and in a holistic manner.

• (167) In terms of the burden of proof, where the Commission has adduced consistent indicia to establish that a trader affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it will be for that trader or that producer to adduce evidence that an adjustment under Article 2(10)(i) of the basic Regulation is not justified.

• (168) The Commission found that Halead should be considered to be acting as an agent working on a commission basis rather than the internal sales department of Hailide. In its assessment the Commission took into consideration the relationship between the two companies in view of the ownership structure of the group as well as provisions of the contracts regulating the relationship of the two companies. The Commission analysed sales activities of both Hailide and Halead with particular attention to the existence of an internal sales department in Hailide. The Commission adduced consistent indicia to establish that Halead carried out functions comparable to those of an agent working on a commission basis. Hailide, on the other hand, failed to adduce evidence that an adjustment under Article 2(10)(i) of the basic Regulation is not justified. The claim was therefore rejected. Detailed analysis, due to its confidential nature, was provided to Hailide upon publication of this Regulation.

• (169) In view of the above, and considering that a transfer of funds occurs between two related entities, the Commission was justified in examining whether the actual value of the mark-up differs from what an unrelated trader would obtain. Based on the nominal profit identified in this case, as explained in recital (153), the Commission did not consider the mark-up to sufficiently reflect a commission that would have been due in an arm’s length transaction. As mentioned in recital (163), the Commission therefore considered that an adjustment should be based on the SG&A of the trader and a nominal profit identified in this case.

• (170) In its response to the final disclosure, Hailide requested an adjustment to constructed normal value to ensure fair comparison with the export price under Article 2(10) of the basic Regulation. According to Hailide, elements such as freight and insurance that could have been included in the SG&A used in the construction of the normal value should be removed from, as the same were deducted from the export price thereby creating asymmetry between the two.

• (171) The Commission noted that Hailide failed to demonstrate that freight and insurance have been included in the SG&A used for the construction of the normal value. It follows that the requested adjustment was neither substantiated nor quantified and thus the request was rejected.

3.6.   Dumping margin

• (172) 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 to calculate the dumping margin, in accordance with Article 2(11) and (12) of the basic Regulation.

• (173) In response to the final disclosure, Hailide raised a number of specific claims regarding the export sales via Hailide’s related importer in the Union. These claims related to adjustments for allowances attributable to the related importer, a clerical error in exchange rate used for conversion of CIF amounts, as well as deductible SG&A percentage and were accepted as valid. Moreover, the Commission noted and corrected a clerical error in the exchange rate used for conversion of allowances amount with respect to the sales of the related importer. As a result, Hailide’s dumping margin was recalculated and the revised calculations were subject to an additional disclosure.

• (174) The definitive dumping margin thus established, expressed as a percentage of the CIF Union frontier price, duty unpaid, is 6,9 % for Hailide.

• (175) The Commission considered that the provisions of Article 7(2) were applicable to set the level of the definitive duty.

4. INJURY

4.1.   Definition of the Union industry and Union production

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

• (177) The total Union production during the investigation period was established at around 117 000 tonnes. A part of the production, 22 322 tonnes, is subject to captive consumption. The Commission established the figure on the basis of all the available information concerning the Union industry, such as figures provided by the Union producers. As indicated in recital (12), three Union producers were selected in the sample representing more than 50 % of the total Union production of the like product.

4.2.   Union consumption

• (178) The Commission established the Union consumption on the basis of the sales volume of the Union industry on the Union market, plus the volume of imports of HTYP from all third countries. Since imports of HTYP from China were subject to measures during the period considered, the Commission used the statistics collected pursuant to Article 14(6) ⁹¹ of the basic Regulation (‘Article 14(6) database’) to establish the volume and average prices of imports from this country during the period considered, as it contained sufficiently detailed information at the level of the 10-digit TARIC codes and TARIC additional codes per company.

• (179) Union consumption developed as follows:

Table 2

Union consumption (tonnes)

	2018	2019	2020	Investigation Period
Total Union consumption	244 112	228 168	208 516	253 039
Index	100	93	85	104
Captive market	16 046	13 911	16 563	22 322
Index	100	87	103	139
Free market	228 065	214 256	191 953	230 717
Index	100	94	84	101
Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers, Eurostat and Article 14(6) database	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers, Eurostat and Article 14(6) database	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers, Eurostat and Article 14(6) database	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers, Eurostat and Article 14(6) database	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers, Eurostat and Article 14(6) database

• (180) The Union free market consumption within the period considered first decreased by 6 percentage points from 2018 until 2019, followed by a steep decrease of 10 percentage points due to Covid-19 in 2020. However, consumption then recovered and in the IP was 1 percentage point higher than in 2018.

4.3.   Imports from Hailide China

• (181) The Commission established the volume of imports as well as the market share of the imports on the basis of the Article 14(6) database which provides data per 10-digit TARIC Code and per exporting producer (TARIC additional code).

• (182) Imports into the Union from the country concerned developed as follows for Hailide:

Table 3

Import volume (tonnes) and market share

	2018	2019	2020	Investigation Period
Volume of imports into the Union from Hailide China (tonnes)	[50 000 – 55 000 ]	[51 000 – 56 000 ]	[43 000 – 48 000 ]	[43 000 – 48 000 ]
Index	100	102	86	86
Market share	[20  % – 25  %]	[23  % – 28  %]	[21  % – 26  %]	[18  % – 23  %]
Index	100	109	102	85
Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.

• (183) Hailide’s exports from China to the Union decreased by 14 % over the period considered. Also, Hailide’s market share decreased over the period considered. Nevertheless, in the IP Hailide still maintained a high market share of [18 % – 23 %] of the Union market.

4.4.   Prices of the imports from Hailide

• (184) The Commission established the prices of imports on the basis of the import statistics of the Article 14(6) database. Price undercutting of the imports was established on the basis of the comparison of the figures in the Article 14(6) database with the verified prices of the sampled Union producers.

• (185) The weighted average price of imports into the Union from Hailide developed as follows:

Table 4

Import prices (EUR/tonne)

	2018	2019	2020	Investigation Period
Hailide	[1 700 – 1 800 ]	[1 600 – 1 700 ]	[1 300 – 1 400 ]	[1 500 – 1 600 ]
Index	100	96	77	91
Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.

• (186) The import price of Hailide was volatile, decreasing by 23 % to a price of [1 300 – 1 400] EUR/ton in 2020 and then increasing by 14 percentage points in the IP. Despite the price recovery in the IP to [1 500 – 1 600] EUR/ton, this still shows an overall decrease of 9 % throughout the period considered. The increase in the IP was caused by increased transport costs and the post-Covid-19 recovery resulting in a high demand in the IP.

• (187) The Commission determined the price undercutting during the IP by comparing:

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

• (b) the corresponding weighted average prices per product type of the imports from Hailide to the first independent customer on the Union market, established on a Cost, Insurance, Freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs.

• (c) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ turnover during the investigation period.

• (d) It showed a weighted average undercutting margin of [17 % – 20 %] done by Hailide on the Union market. In addition, as further described in recital (203), the Union industry was unable to raise its prices above the level of its Cost of Production because of the price pressure from Hailide, whose prices remained below the Union industry’s cost of production during the entire period concerned.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (188) In accordance with Article 3(5) of the basic Regulation, the assessment of the economic situation of the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (189) As mentioned in recital (12), sampling was used for the assessment of the economic situation of the Union industry.

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

• (191) 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.

• (192) 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

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

Table 5

Production, production capacity and capacity utilisation

	2018	2019	2020	Investigation Period
Production volume (tonnes)	104 834	100 373	90 470	116 803
Index	100	96	86	111
Production capacity (tonnes)	128 826	133 544	134 426	133 517
Index	100	104	104	104
Capacity utilisation	81 %	75 %	67 %	87 %
Index	100	92	83	108
Production volume on the free market (tonnes)	88 788	86 462	73 907	94 481
Index	100	97	83	106
Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.

• (194) The production volume first decreased by 14 % from 2018 to 2020 and then increased by 25 percentage points in the IP showing an overall increase of 11 % over the period considered. The production volume on the free market first decreased by 17 % from 2018 to 2020 and then increased by 23 percentage points in the IP, showing an overall increase of 6 % over the period considered. The capacity utilisation decreased from 2018 to 2020 by 17 %, but increased overall 8 % over the period considered.

4.5.2.2.   Sales volume and market share

• (195) The Union industry’s sales volume and market share developed over the period considered as follows:

Table 6

Sales volume and market share (tonnes)

	2018	2019	2020	Investigation Period
Sales volume on the Union market (tonnes)	70 753	64 150	59 880	67 335
Index	100	91	85	95
Market share	31 %	30 %	31 %	29 %
Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.

• (196) Total sales volume of the Union industry on the Union market decreased by 5 % during the period considered. The Union industry’s market share decreased by 2 percentage points during the period considered. The market share shows a declining trend over the period considered, interrupted by an intervening upward trend in 2020, which can be explained by the Covid-19 pandemic and the container shortage in 2020, which made shippings from East Asian countries more difficult.

4.5.2.3.   Growth

• (197) During the period considered, the free market consumption increased by 1 %, the sales volume of the Union industry decreased by 5 %, which translated into a loss in market share of 2 percentage points over the period considered.

4.5.2.4.   Employment and productivity

• (198) Employment and productivity developed over the period considered as follows:

Table 7

Employment and productivity

	2018	2019	2020	Investigation Period
Number of employees	1 024	1 014	993	1 034
Index	100	99	97	101
Productivity (tonnes/employee)	102	99	91	113
Index	100	97	89	110
Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.	Source: Verified data provided by the Union industry and verified questionnaire replies of the sampled Union producers.

• (199) Due to the recovery of the demand in the IP, the employment of the Union industry increased by 1 % during the period considered, despite showing a negative trend from 2018 to 2020. Similarly, the productivity also decreased from 2018 to 2020 and turned positive for the period considered only due to the IP.

4.5.2.5.   Magnitude of the dumping margin

• (200) Hailide’s dumping margin was above the de minimis level. The impact of the magnitude of the actual margin of dumping on the Union industry was substantial, given the volume and prices of Hailide’s imports from China. As mentioned above, Hailide’s prices undercut the Union industry prices by [17 % – 20 %]. Furthermore, Hailide’s import price as displayed in Table 4 was at least 23 % lower than the average import price from South Korea, at least 12 % lower than the import price from Taiwan and at least 42 % lower than the average import price from other third countries.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

• (201) 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 8

Sales prices and cost of production in the Union (EUR/tonne)

	2018	2019	2020	Investigation Period
Average unit sales price in the Union (EUR/tonne)	2 042	1 974	1 713	1 957
Index	100	97	84	96
Unit cost of production (EUR/tonne)	2 371	2 357	2 039	2 246
Index	100	99	86	95
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (202) The Union industry’s average unit sales price to unrelated customers in the Union decreased from 2018 to 2020 by 16 % and only partially recovered 12 percentage points in the IP reaching 1 957 EUR/tonne. The decline of the sales price is mostly linked to the pricing pressure from Chinese imports. In addition, in 2019 and 2020, the global economic slowdown has been affecting the prices of raw materials and, as a consequence, of industrial polyester yarn.

• (203) The cost of production developed in a similar trend, partially due to decreasing raw material prices during the global economic slowdown in 2019 and 2020 and partially due to rationalisations like reducing staff during these years. In 2019 and 2020 the Unit cost decreased by 1 percentage point and 13 percentage points respectively. However, the prices decreased at a higher rate of 16 percentage points over these two years. This shows that the Union industry could not benefit from these cost decreases. In the IP, unit costs increased by 9 percentage points whereas the sales price increased by 12 percentage points. However, compared to the beginning of the period considered the prices decreased almost at the same percentage as the unit costs, showing that the prices were suppressed. The Union industry was not able to benefit from the cost decrease, it could not raise prices, and could not even maintain prices at their original level.

4.5.3.2.   Labour costs

• (204) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 9

Average labour costs per employee

	2018	2019	2020	Investigation Period
Average labour costs per employee (EUR)	48 153	49 499	46 821	51 680
Index	100	103	97	107
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (205) The average labour costs per employee increased by 7 % over the period considered. This trend was only interrupted in 2020, partially due to rationalisations and partially due to Covid-19 pandemic specific measures like short-time work.

4.5.3.3.   Inventories

• (206) Stock levels of the sampled Union producers developed over the period considered as follows:

Table 10

Inventories

	2018	2019	2020	Investigation Period
Closing stocks (tonnes)	7 721	8 052	6 510	6 991
Index	100	104	84	91
Closing stocks as a percentage of production	14	16	13	12
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (207) The level of closing stocks of the sampled Union producers decreased by 9 % over the period considered. In the IP, the level of stocks represented around 12 % of their production.

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

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

Table 11

Profitability, cash flow, investments and return on investments

	2018	2019	2020	Investigation Period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	-10	-15	-17	-8
Index	- 100	- 153	- 174	-86
Cash flow (EUR)	-8 902 195	-4 318 803	-2 067 021	-5 374 726
Index	- 100	-49	-23	-60
Investments (EUR)	12 926 148	7 405 795	2 087 298	4 495 812
Index	100	57	16	35
Return on investments	-4  %	-6  %	-6  %	-4  %
Index	- 100	- 158	- 154	- 101
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (209) 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. The profitability of the Union industry was negative throughout the period considered. It started at -10 % in 2018 and extended the loss until 2020 at -17 %. In the IP, it could slightly improve to -8 % due to high demand.

• (210) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow was negative throughout the period considered. While it gradually improved from 2018 to 2020, it dropped again in the IP. While it showed a 40 % improvement over the period considered it continued to be negative. Consequently, the improvement in cash flow does not indicate a stabilizing of the financial situation of the Union industry as it still remains negative.

• (211) Investments decreased by 65 % over the period considered. Investments related to compliance improvements in relation to health, safety and environmental requirements, increase in the capacity and effectiveness of the production plants. While in 2018, investments in a capacity increase were possible, in the following years this was no longer possible.

• (212) 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 followed similar trend as the profitability. It dropped from 2018 to 2020 and then in the IP returned to a level closer to 2018. It stayed negative throughout the entire period considered. Consequently, the return on investment indicates a negative financial situation of the Union industry over the entire period considered.

4.5.4.   Conclusion on injury

• (213) The investigation showed that the overall situation of the Union industry on a macro level did not improve over the period considered as would be expected in a situation of increasing demand in the IP. Despite being protected as regards other exporters, exports of Hailide at low prices still were made under conditions which did not allow the Union industry to recover from injurious dumping. The volume of imports from Hailide were substantial throughout the period considered ([43 000 – 56 000]) resulting in an equally substantial market share ([18 %-28 %]), making Hailide the single biggest exporting producer on the Union market. Prices of Hailide were consistently below costs of production of the Union industry throughout the period considered and were found to undercut the Union industry’s prices by [17 % – 20 %] in the IP. Faced with such volume and price pressure, the Union industry’s prices were consistently below its cost of production making losses throughout the entire period considered. Even the fact of an increased demand in the IP did not lead to higher sales on the EU market than in the beginning of the period considered. Despite investments into a capacity increase, the Union was not able to even maintain its market share.

• (214) The investigation has also shown that the situation of the industry on a micro level was not reaching a sustainable level and the industry incurred losses in the IP despite the fact that in the IP the demand had recovered from the economic downfall of the previous two years. The economic situation of the Union industry was thus injurious.

• (215) On the basis of the above, the Commission concluded that the Union industry was suffering material injury within the meaning of Article 3(5) of the basic Regulation during the investigation period.

5. CAUSATION

• (216) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from Hailide 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 Hailide was not attributed to the dumped imports.

5.1.   Effects of the dumped imports

• (217) During the entire period considered, Hailide’s exports represented a substantial share of the imports to the EU. Even though, Hailide’s market share decreased during the period considered by 3 percentage points, Hailide’s exports during the IP still represented [18 % – 23 %] of the Union market share. The price level of Hailide’s exports decreased by 9 % over the period considered: during the IP at [1 500 – 1 600] EUR/tonne it undercut the Union industries’ price by at least 17 %. As displayed in Table 8, the Union producers were able to decrease the unit cost of production by 5 % over the period considered. However, due to the pressure from Hailide’s low prices they were not able to increase their pricing level or even to maintain it to improve their profitability. Hailide thereby depressed the price level for the Union industry, contributing to a situation of continued losses over the period considered for the Union industry. There was a clear coincidence in time between the price pressure of Hailide’s imports representing an important market share of [18 % -23 %] and the injury of the Union industry. Therefore, due to the significant volume and price pressure exercised by Hailide’s exports there was a genuine and substantial relationship of cause and effect between the imports of HTYP from Hailide and the injury suffered by the Union industry.

5.2.   Effects of other factors

5.2.1.   Imports from Hangzhou Huachun Chemical Fiber

• (218) Hangzhou Huachun Chemical Fiber ceased to exist in 2021. Its exports have decreased by 99 % during the period considered and were below 1 % of the Union market share in the IP. Furthermore, the export price was significantly above of the Union industry price. Therefore, these exports did not contribute to the injury.

5.2.2.   Imports from the other exporting producers subject to duties

• (219) The imports from the other exporting producers subject to duties developed as follows:

Table 12

Import volume (tonnes) and market share

	2018	2019	2020	Investigation Period
Volume of imports from exporters currently subject to duties (tonnes)	[58 000 - 63 000 ]	[59 000 – 64 000 ]	[58 000 – 63 000 ]	[69 000 – 74 000 ]
Index	100	101	99	117
Market share	[25  % - 30  %]	[27  % – 32  %]	[30  % – 35  %]	[29  % – 34  %]
Index	100	107	118	115
Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.	Source: Article 14(6) database.

• (220) Their import prices developed as follows:

Table 13

Import prices without duties (EUR/tonne)

	2018	2019	2020	Investigation Period
China (exporters currently subject to duties)	1 655	1 531	1 195	1 440
Index	100	92	72	87