Commission Implementing Regulation (EU) 2023/1102 of 6 June 2023 imposing a definitive anti-dumping duty on imports of certain graphite electrode systems originating in India following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 11(2) thereof,

Whereas:

(1) Following an anti-dumping investigation, the Council imposed a definitive anti-dumping duty on imports of certain graphite electrodes systems originating in India (‘the original investigation’) by Regulation (EC) No 1629/2004 (2). The Council, following an anti-subsidy investigation, by Regulation (EC) No 1628/2004 (3), also imposed definitive countervailing duties on imports of certain graphite electrodes systems originating in India.

(2) Following an ex-officio partial interim review of the countervailing measures, the Council by Regulation (EC) No 1354/2008 (4) amended Regulation (EC) No 1628/2004 and Regulation (EC) No 1629/2004.

(3) Further to an expiry review pursuant to Article 11(2) of the basic Regulation, the Council by Implementing Regulation (EU) No 1186/2010 (5) extended the anti-dumping measures. Further to an expiry review of the countervailing measures, the Council by Implementing Regulation (EU) No 1185/2010 (6) extended the countervailing measures.

(4) Following the expiry review pursuant to Article 11(2) of the basic Regulation, the European Commission (‘Commission’) extended the anti-dumping measures by the Implementing Regulation (EU) 2017/422 (7). Following the expiry review of the countervailing measures, the Commission extended the countervailing measures by the Implementing Regulation (EU) 2017/421 (8).

(5) The anti-dumping measures currently in force are 9,4 % and 0 % on imports from individually named exporters, and a duty rate of 8,5 % on imports from all other companies from India.

(6) Following the publication of a Notice of impending expiry (9), the Commission received a request for review pursuant to Article 11(2) of the basic Regulation.

(7) The request for review was submitted on 9 December 2021 by the Union producers, representing around 90 % of the total Union production of certain graphite electrodes systems (‘the applicants’). The request for review was based on the grounds that the expiry of the measures would be likely to result in continuation of dumping and recurrence of injury to the Union industry.

(8) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, the Commission, on 9 March 2022, by Notice published in the Official Journal of the European Union (10) (‘the Notice of Initiation’), initiated an expiry review with regard to imports of certain graphite electrode systems originating in India (‘the country concerned’) on the basis of Article 11(2) of the basic Regulation.

(9) By a notice published in the Official Journal of the European Union on 9 March 2022 (11), the Commission also initiated an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 (12), of the definitive anti-subsidy measures in force with regard to imports into the Union of certain graphite electrode systems originating in India.

(10) The investigation of a likelihood of continuation or recurrence of dumping covered the period from 1 January 2021 to 31 December 2021 (‘the review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment of a likelihood of continuation or recurrence of injury covered the period from 1 January 2018 to the end of the review investigation period (‘the period considered’).

(11) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the applicants, other known Union producers, the known exporting producers and the Indian authorities, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(12) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

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

(14) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of production and sales volumes of the like product in the Union. This sample consisted of three Union producers. The sampled Union producers accounted for around 61 % of the estimated total Union production and 64 % of the estimated sales volume of the like product in the Union. The Commission invited interested parties to comment on the provisional sample. The Commission received no comments. The sample is representative of the Union industry.

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

(16) No importers came forward.

(17) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in India to provide the information specified in the Notice of Initiation. The Commission has received in due time a sampling response from two graphite electrode systems producers in India: HEG Limited and Graphite India Limited, therefore, sampling was not necessary. The Commission decided to investigate the two exporting producers that provided the requested information.

(18) At the initiation the questionnaires were made available in the file for inspection by interested parties and on DG Trade’s website (13).

(19) Questionnaire replies were received from the three sampled Union producers. None of the exporting producers provided a questionnaire reply. None of the users provided a questionnaire or came forward during the investigation.

(21) The product under review is graphite electrodes of a kind used for electric furnaces, with an apparent density of 1,65 g/cm3 or more and an electrical resistance of 6,0 μ.Ω.m or less, and nipples used for such electrodes, whether imported together or separately (‘the product under review’), currently falling under CN codes ex 8545 11 00 and ex 8545 90 90 (TARIC codes 8545110010 and 8545909010) ‘the product under review’, or ‘GES’).

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

(24) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether the expiry of the measure in force would be likely to lead to a continuation or recurrence of dumping from India.

(25) In accordance with Article 11(2) of the basic Regulation, it was examined whether the expiry of the existing measures would be likely to lead to a continuation or recurrence of dumping.

(26) As mentioned above in recital (19), none of the exporting producers provided a questionnaire reply. Due to the lack of cooperation from the cooperating exporting producers, and in accordance with Article 18 of the basic Regulation, the Commission’s analysis had to be made of facts available in accordance with Article 18 of the basic Regulation.

(27) The Indian authorities were duly informed that due to the non-cooperation of the Indian exporting producers, the Commission may apply Article 18 of the basic Regulation. No comments were received in this respect.

(28) The findings in Section 3 and 4 were thus based on facts available. For this purpose, the information provided in the request for expiry review and the statistics available in Eurostat and the Global Trade Atlas (14) (‘GTA’) databases as well as other publicly available sources were used.

(29) On the basis of the above, the Commission constructed the normal value on an ex-works basis in accordance with Article 2 of the basic Regulation.

(30) The normal value was based on the data provided by the applicants, from (i) Mordor Intelligence (15) and (ii) Valuates Reports (16). The two sources indicated a similar average domestic price of GES in India of 3 788 EUR per tonne at ex-works level in the review investigation period. This price was cross-checked and was in line with the estimates made, based on the publicly available price charts published by SteelMint.com (17) during the same period, indicating an average price of EUR 3 630 per tonne.

(31) The Commission used the average price of the two sources provided by the applicants to establish a normal value at 3 788 EUR per tonne.

(32) In the absence of cooperation by the exporting producers from India, the export price was determined based on CIF prices in Eurostat data corrected to ex-works level. As seen in recital (44), the import volumes from India in the review investigation period were significant and thus the prices were considered as representative. The CIF price of 2 747 EUR per tonne (18) was adjusted for the sea freight and insurance cost, domestic transport costs in India and EU customs handling to arrive at 2 558 EUR per tonne at the ex-works level. The adjustments were based on OECD data (19) and information provided in the review request.

(33) The Commission compared the normal value and the export price on an ex-work basis as established above.

(34) On this basis, the weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, was 44,7 % for India. It was therefore concluded that dumping continued during the review investigation period.

(35) Further to the finding of the existence of dumping during the review investigation period, the Commission investigated, in accordance with Article 11(2) of the basic Regulation, the likelihood of continuation of dumping, should the measures be allowed to lapse.

(36) The investigation showed that during the RIP Indian imports continued to enter the Union market at significantly dumped prices and maintained their quantities and market shares as in the last two review investigations. Furthermore, the analysis of production volume and spare capacity in India, export volumes and prices from India to the other third country markets, existing measures in the other third countries, and attractiveness of the Union market provided in recitals (107) – (115) also shows that it is likely that the dumped exports would further increase their already substantial presence in the Union market should the current measures be allowed to lapse. Consequently, it is concluded that there is a likelihood of continuation of dumping should measures be allowed to lapse.

(37) The like product was manufactured by seven producers in the Union during the review investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

(38) The total Union production during the review investigation period was established at 219 330 tonnes. The Commission established the figure on the basis of the verified questionnaire replies of the sampled Union producers and the data provided by the non-sampled producers and the applicants (20). As indicated in recital (14) the three sampled Union producers represented more than 61 % of the total Union production of the like product.

(39) The Commission established Union consumption on the basis of the sales volumes of the Union industry’s own production destined for the Union market and the import volumes obtained from Eurostat statistics.

(41) The Union consumption of GES decreased by 10 % over the period considered. The year 2018 showed a high consumption driven by high demand of the EU steel industry, which was in the process of recovering from the steel crisis. In addition, in a situation of a sudden GES price increase, steelmakers were building up stocks of GES in the expectation of an additional increase.

(42) In 2019, the production of steel from electric arc furnaces decreased, as compared to 2018 (by 6,6 % according to Eurofer figures). Consequently, the demand for GES dropped. As the price of GES went down significantly, building up stocks was no longer considered necessary for the downstream industry as users were not anymore concerned by a further price increase. As a consequence, steel producers started destocking their GES inventories. Moreover, demand dropped further – but this time on a temporary basis in 2020, following the COVID-19 outbreak.

(43) As mentioned in recital (39), the Commission established the volume of imports from India on the basis of Eurostat statistics. The market share was established based on of the Union consumption as set out in recital (40).

(45) Imports of the product under review from the country concerned had decreased in 2019 and 2020, following the decrease of EU consumption, and recovered during the review investigation period. Overall, during the period considered the volume of imports increased from 5 802 tonnes in 2018 to 6 540 tonnes in the review investigation period, i.e. by 13 %. Imports of GES from India represented around 16 % of total GES imports to the Union during the review investigation period corresponding to a market share of 5 %.

(46) Overall, the imports from India and their market share increased over the period considered. Despite the Union consumption decrease, the volume of dumped imports from India kept increasing during the period considered (by 13 %), whereas the Union industry’s sales decreased.

(48) The average import price (22) of GES from India went down by 80 % throughout the period considered, from 13 756 EUR/tonne in 2018 to 2 747 EUR/tonne in the review investigation period.

(49) Due to the high global demand for GES, the Indian prices surpassed the Union industry prices in the first half of the period considered, but then dropped by 60 % between 2018 and 2020 and remained consistently lower than the Union prices in 2020 and in the review investigation period.

(51) This resulted in the average undercutting margin of 33,2 %. These prices were also considered as a reasonable indicator of future possible price levels should measures be repealed.

(52) After disclosure the Government of India (GOI), argued that the undercutting margin calculated by the Commission is not representative as it is not based on actual market prices in the Union. In GOI’s view the fact that sales sourced from GrafTech Iberica were made pursuant to long-term contracts (‘LTAs’) have resulted in an artificially high selling price which is not indicative of the market price of GES in the Union.

(53) The Commission disagrees with this assessment. LTAs are not an uncommon commercial practice and a business decision in which a customer accepts to tie itself to a particular price level in exchange for a security of supply. Considering that LTAs were being used in dealings on the relevant market their presence in the sample does not render the sample not representative. Moreover, Only part of the sales made by GrafTech were covered by LTAs while the sales of the other two sampled Union producers in the review investigation period were not covered by similar LTAs. Therefore, in the Commission’s view, whilst representative of a part of the market, overall the LTAs used by GrafTech Iberica did not significantly affected the undercutting calculation. Therefore, this claim was dismissed.

(54) The imports of the product under review from other third countries were mainly from China, Mexico and Russia.

(56) The impact of imports from other third countries has been analysed since they represented around 84 % of total GES imports to the Union during the RIP. Despite the decreasing consumption, volume of imports from other third countries increased by 19 % from almost 29 000 tonnes in 2018 to around 35 000 tonnes in the RIP.

(57) Imports from third countries followed partially the decrease in consumption in 2019 and 2020 yet rapidly recovered and reached the highest level in the RIP, with 19 % increase compared to 2018. The average price of imports from other third countries followed the global trend, decreasing by 72 % between 2018 and the RIP.

(58) The large majority of these imports in the RIP, 76 %, were imports from China. The import volumes from the other third countries except China and India increased over the period considered by 22 %. Import volume of GES from India increased from 5 800 tonnes in 2018 to 6 500 tonnes during the RIP, while China increased from 22 054 tonnes in 2018 to 26 065 tonnes during the RIP, with a market share gain of 25 % and 31 %, respectively.

(59) Over the same period import prices from China were lower than the prices of both the Indian exporters and the prices of the Union producers (except in 2018).

(60) Furthermore, as of 7 April 2022 (23) the Commission made the imports of GES from China subject to anti-dumping duty (ranging from 23 % to 74,9 %) (24).

(61) 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.

(62) As mentioned in recital (14), sampling was used for the assessment of the economic situation of the Union industry.

(63) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators based on data contained in the replies to the anti-dumping questionnaire by the sampled producers as well as macroeconomic data provided by the non-sampled producers and the applicants, crosschecked with the data in the review request. The data related to all Union producers. The Commission evaluated the microeconomic indicators based on data contained in the questionnaire replies from the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

(64) 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.

(65) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

(67) Following the decrease in consumption, the production volume of the Union industry dropped by 34 % between 2018 and 2020, and partially recovered in the RIP, remaining below the 2018 level. Overall, the production volume decreased by 13 % during the period considered.