Commission Implementing Regulation (EU) 2023/1122 of 7 June 2023 imposing a definitive anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

8.6.2023	EN	Official Journal of the European Union	L 148/45

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. PROCEDURE

1.1.   Previous investigations and measures in force

• (1) By Commission Implementing Regulation (EU) 2017/649 ², the European Commission (‘the Commission’) imposed definitive anti-dumping duties on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel, originating in People’s Republic of China (‘the PRC’ or ‘the country concerned’ or ‘China’) (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’. The anti-dumping duties currently in force are ranging between 0 % and 31,3 % ³. The duty rates were established based on the injury margin in accordance with the lesser duty rule, as provided for in Article 9(4) of the basic Regulation.

1.2.   Request for an expiry review

• (2) Following the publication of a notice of impending expiry ⁴ the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation.

• (3) The request for review (‘the request’) was submitted on 4 January 2022 by EUROFER, the European Steel Association (‘the applicant’), on behalf of the Union industry of certain hot-rolled flat products of iron, non-alloy or other alloy steel in the sense of Article 5(4) of the basic Regulation. The request for review was based on the grounds that the expiry of the measures would be likely to result in recurrence of dumping and recurrence of injury to the Union industry.

• (4) China Iron and Steel Association (‘CISA’) claimed that EUROFER exercised excessive confidentiality in the review request, to the extent that interested parties were not able to comment on it meaningfully and that the request therefore should have been rejected. According to CISA, the deliberate use of excessive confidentiality prevented them from gaining any reasonable understanding of the situation during the period of investigation. In particular with reference to the cost template of Union producers, CISA argued that the WTO Anti-dumping Agreement (‘ADA’), in particular Article 6.5.1 thereof, as well as the basic Regulation, in particular Article 19 thereof, contain a similar wording with regard to interested parties’ obligation to disclose non-confidential information.

• (5) Article 19 of the basic Regulation allows for the safeguarding of confidential information in circumstances where disclosure would be of significant competitive advantage to a competitor or would have a significant adverse effect upon the person providing the information or upon a person from whom that person has acquired the information. The information provided in the limited annexes to the request falls under these categories. In particular, with regard to the Union producers’ specific consumption ratios of the factors of production (‘FOPs’) needed to produce the product under review provided in the expiry review request, the Commission observed that this data contains business secret information and is not liable to summary. The consumption ratios of the FOPs were used by the applicant to construct the normal value. At the same time, the non-confidential version of the expiry review request contained sufficient evidence regarding the FOPs actually used for the construction of the normal value. Similarly, in the course of the investigation, cooperating exporting producers are not required to disclose or summarise certain confidential information such as the actual recipe for their product types containing the consumption ratios of the FOPs. The Commission thus considered that the version open for inspection by interested parties of the request contained all the essential evidence, and that the information provided in the non-confidential version of the complaint was sufficient for interested parties to exercise their rights of defence. Therefore, the claim was rejected.

1.3.   Initiation of an expiry review

• (6) 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 initiated, on 5 April 2022, an expiry review with regard to imports into the Union of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the PRC on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ⁵ (‘the Notice of Initiation’).

• (7) CISA claimed that the Union industry profitability levels as reported in the request should have prompted the Commission to reject the request, and that the request did not demonstrate that the expiry of measures could reasonably lead to the continuation of injury. According to CISA, the state of the Union industry is not as fragile as EUROFER claimed. It argued that not a single injury indicator during the entire period considered has declined to a level below the consumption decline index and that the Union industry, to some extent, had been able to recover during the time it enjoyed the protection of the measures in place. Finally, CISA also noted that imposing measures would be against the Union interest because of the impact of EU sanctions, as well as inter-related supply chain disruptions and the post COVID-19 recovery.

• (8) The Commission recalled that the request was based on the grounds of a likelihood of recurrence of injury and not a continuation of injury. Thus, the profitability figures indicated in the review request did not preclude the initiation of a review investigation, which is forward looking. In any event, profitability is only one of many indicators used to analyse the economic situation of the Union industry. Contrary to CISA’s view, the Commission’s analysis of the request showed that the applicant had provided sufficient evidence at initiation stage pointing to a likelihood of recurrence of injury should the anti-dumping measures applicable to imports from the PRC be allowed to lapse. In this regard the Commission recalled that there is no legal obligation to consider the Union interest when assessing the merits of an expiry review request. Hence, the initiation of the review investigation was warranted.

1.4.   Review investigation period and period considered

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

1.5.   Interested parties

• (10) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. The Commission specifically informed the applicant, all known Union producers, the known producers in the People’s Republic of China and the authorities of the People’s Republic of China as well as known importers, users and traders about the initiation of the expiry review and invited them to participate.

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

1.6.   Sampling

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

1.6.1.   Sampling of Union producers

• (13) 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 the largest volume of production of the like product in the Union during the review investigation period that could reasonably be investigated within the time available. This sample consisted of three Union producers. The sampled Union producers accounted for around 29 % of the estimated total production in the Union during the review investigation period. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No comments were received, and the Commission confirmed the provisionally selected sample. The sample is representative of the Union industry.

• (14) Although no comments were provided during the sample selection procedure, CISA argued in a later submission that the level of representativeness was low, especially compared to the sample selected in the original investigation, which accounted for 45 % of Union production. CISA invited the Commission to consider in detail whether the low figure does not affect the level of representativeness of the domestic industry.

• (15) The Commission recalled first that differences in the sample between the original investigation and the expiry review investigation do not invalidate the representativity of the sample. Second, the Commission noted that CISA did not put forward any substantive elements, other than a comparison with the sample in the original investigation, showing that the sample was unrepresentative. Given that the sample was selected pursuant to Article 17 of the basic Regulation, on the basis of production volumes of the like product in the Union during the review investigation period, as well as geographical representativity, and was limited to a number of Union producers which can reasonably be investigated within the time available, the Commission re-affirmed that the sample was considered representative.

1.6.2.   Sampling of importers

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

• (17) No unrelated importer, however, came forward and provided the requested information.

1.6.3.   Sampling of exporting producers in the People’s Republic of China

• (18) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known producers in the People’s Republic of China to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Chinese authorities to identify and/or contact other producers, if any, that could be interested in participating in the investigation.

• (19) At initiation, the Commission made available a copy of the questionnaires in the file for inspection by interested parties and on DG TRADE’s website ⁶.

• (20) No Chinese producers provided the requested information and/or agreed to be included in the sample. The Commission informed the Mission of the People’s Republic of China to the European Union about its intention to apply facts available in accordance with Article 18 of the basic Regulation. No comments were received.

• (21) Therefore, since there was no cooperation from the exporting producers from the PRC, the findings with regard to the imports from the PRC were made on the basis of the facts available pursuant to Article 18 of the basic Regulation, in particular using trade statistics on imports and exports (Eurostat, the Global Trade Atlas (‘GTA’) ⁷ and the expiry review request).

• (22) The Commission sent a questionnaire concerning the existence of significant distortions in the People’s Republic of China within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’) ⁸. No reply was received. Consequently, the Commission informed the Mission of the PRC to the European Union about its intention to apply facts available in accordance with Article 18 of the basic Regulation. No comments were received.

1.7.   Replies and verification

• (23) Questionnaire replies were received from the sampled Union producers.

• (24) The Commission sought and verified all the information deemed necessary for the determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

• — Union producers

• — Arcelor Mittal Poland (Dąbrowa Górnicza, Poland)

• — Tata Steel Ijmuiden (IJmuiden, The Netherlands)

• — ThyssenKrupp Steel Europe AG (Duisburg, Germany) and its related company ThyssenKrupp Material Processing (Krefeld, Germany).

1.8.   Disclosure

• (25) On 4 April 2023, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

• (26) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. The parties who so requested were granted a hearing. CISA requested and was granted a hearing with the Commission services on 12 April 2023.

2. PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under review

• (27) The product subject to this review is certain flat-rolled products of iron, non-alloy steel or other alloy steel, whether or not in coils (including ‘cut-to-length’ and ‘narrow strip’ products), not further worked than hot-rolled, not clad, plated or coated (‘HRF‘ or ‘product under review‘).

The following products are not covered by this review:

• (i) products of stainless steel and grain-oriented silicon electrical steel,

• (ii) products of tool steel and high-speed steel,

• (iii) products, not in coils, without patterns in relief, of a thickness exceeding 10 mm and of a width of 600 mm or more, and

• (iv) products, not in coils, without patterns in relief, of a thickness of 4,75 mm or more but not exceeding 10 mm and of a width of 2 050 mm or more.

The product under review is currently falling under CN codes 7208 10 00, 7208 25 00, 7208 26 00, 7208 27 00, 7208 36 00, 7208 37 00, 7208 38 00, 7208 39 00, 7208 40 00, 7208 52 10, 7208 52 99, 7208 53 10, 7208 53 90, 7208 54 00, 7211 13 00, 7211 14 00, 7211 19 00, ex 7225 19 10 (TARIC code 7225191090), 7225 30 90, ex 7225 40 60 (TARIC code 7225406090), 7225 40 90, ex 7226 19 10 (TARIC codes 7226191091, 7226191095), 7226 91 91 and 7226 91 99. The CN and TARIC codes are given for information only, without prejudice to a subsequent change in the tariff classification.

• (28) Hot-rolled flat steel products are produced through hot rolling. This is a metal forming process in which hot metal is passed through one or more pairs of hot rolls to reduce the thickness and to make the thickness uniform, whereby the temperature of the metal is above its recrystallization temperature. They can be delivered in various forms; in coils (oiled or not oiled, pickled or not pickled), in cut lengths (sheet) or in narrow strips.

There are two main uses of the hot-rolled flat steel products. First, they are the primary material for the production of various value-added downstream steel products, starting with cold-rolled flat and coated steel products. Second, they are used as an industrial input purchased by end users for a variety of applications, including in construction (production of steel tubes), shipbuilding, gas containers, cars, pressure vessels and energy pipelines.

2.2.   Product concerned

• (29) Product concerned by this investigation is the product under review originating in the People’s Republic of China.

2.3.   Like product

• (30) As established in the original investigation, this expiry review investigation confirmed that the following products have the same basic physical characteristics as well as the same basic uses:

• — the product concerned, exported to the Union;

• — the product under review produced and sold on the domestic market of the People’s Republic of China; and

• — the product under review produced and sold in the Union by the Union industry.

• (31) These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

3.1.   Preliminary remarks

• (32) During the review investigation period, imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel from the PRC continued albeit at lower levels than in the investigation period of the original investigation (i.e. from 1 January 2015 and 31 December 2015). According to Eurostat data, imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel from the PRC accounted for less than 0,1 % of the Union market in the review investigation period compared to 4,32 % ⁹ market share during the investigation period of the original investigation. In absolute terms, China exported about 28 743 tonnes to the Union during the review investigation period, which is a significant decrease compared to about 1 519 304 tonnes ¹⁰ that it exported to the Union during the investigation period of the original investigation.

• (33) As mentioned in recital (20), none of the exporters/producers from the PRC cooperated in the investigation. Therefore, the Commission informed the authorities of the PRC that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.

• (34) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the likelihood of continuation or recurrence of dumping with regard to the PRC were based on facts available, in particular the information contained in the request for the expiry review and in the submissions by the interested parties, combined with other sources of information, such as trade statistics on imports and exports (Eurostat, the GTA ¹¹).

3.2.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation

• (35) Given the sufficient evidence available at the initiation of the investigation tending to show, with regard to the PRC, the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission initiated the investigation on the basis of Article 2(6a) of the basic Regulation.

• (36) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC.

• (37) In point 5.3.2 of the Notice of Initiation, the Commission also specified that, in view of the evidence available, it had provisionally selected Mexico as an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. The Commission further stated that it would examine other possibly appropriate countries in accordance with the criteria set out in first indent of Article 2(6a) of the basic Regulation.

• (38) On 29 August 2022, the Commission informed the interested parties, by means of a Factors of Production (FOP) Note of the relevant sources it intended to use for the determination of the normal value, with Mexico as the representative country. In the FOP Note the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of certain hot-rolled flat products of iron, non-alloy or other alloy steel. It also informed the interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on available information for the company Ternium S.A., a producer in the representative country.

• (39) CISA came forward with their comments on 16 September 2022. CISA argued that the GTA import data do not reflect domestic prices but the import ones, which are usually affected by many factors such as the quantity of imports of a particular product, the availability of such product and the distance between the exporting and importing countries. The Commission acknowledged that GTA import data indeed reflects import prices. However, nothing on the file suggested that those prices did not reflect domestic prices in the representative country, or that the quality or quantity of the import data used would render it unfit for constructing the normal value in accordance with Article 2(6a)(a) of the basic Regulation. Consequently, the claim was rejected.

• (40) In addition to that, CISA questioned whether the use of weighted average unit price would be able to reflect a meaningful unit cost of raw materials such as ferroalloys, as there were significant differences in unit price depending on the grade of raw materials and/or country of origin. As the producers in the PRC chose not to cooperate with the investigation, the Commission was unable to single out the grade of ferroalloys used by them specifically in the manufacturing of HRF. Therefore, an import price in the representative country was determined as a weighted average import unit price of all grades from all third countries, excluding the PRC and countries which are not members of the WTO, listed in Annex I of Regulation (EU) 2015/755 of the European Parliament and the Council ¹².

• (41) Furthermore, CISA raised an issue of the accuracy of the CIF duty paid unit price of each factor since the GTA import data reported by Mexico is at FOB level rather than at CIF level. In the context of an expiry review the Commission is not obliged to calculate a precise dumping margin but rather to establish whether there is likelihood of either continuation or recurrence of dumping. Given that, as explained in recital (118) below, the findings that the price difference between the normal value and the export price to the rest of the world was above 100 %, even if using another conversion coefficient based on the actual origin of the goods imported, would not have changed the conclusions reached by the Commission. Therefore, the claim was rejected.

3.3.   Normal value

• (42) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

• (43) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’ (‘administrative, selling and general costs’ is referred hereinafter as ‘SG&A’).

• (44) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the producers, the application of Article 2(6a) of the basic Regulation was appropriate.

3.4.   Existence of significant distortions

• (45) In recent investigations concerning the steel sector in the PRC ¹³, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

• (46) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles ¹⁴. In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation ¹⁵, but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation ¹⁶. The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces ¹⁷. Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC ¹⁸. In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation ¹⁹, as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC ²⁰.

• (47) Like in previous investigations concerning the steel sector in the PRC, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, as well as the Commission Staff Working Document on Significant Distortions in the Economy of the PRC for the Purposes of Trade Defence Investigations ²¹ (‘Report’), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC, as also found by its previous investigations in this respect.

• (48) The request alleged that the Chinese economy as a whole is widely influenced and affected by various all-encompassing interventions by the GOC or other public authorities on various levels of government, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation. To support its position, the request referred to the Commission’s recent investigations of the Chinese steel sector ²² or the conclusions of the G20 Global Forum on Steel Excess Capacity ²³.

• (49) More specifically, the request pointed out that against the background of the ‘socialist market economy’ doctrine enshrined in the PRC Constitution, the omnipresence of the Chinese Communist Party (‘CCP’) and its influence over the economy by means of strategic planning initiatives – such as the 13th and 14th Five-Years Plans ²⁴ – the GOC’s interventionism takes various forms, namely administrative, financial and regulatory.

• (50) The request provided examples of elements pointing to existence of distortions, as listed in the first to sixth dash of Article 2(6a)(b) of the basic Regulation. In particular, referring to previous Commission investigations in the steel sector, to the Report, as well as to additional sources, the applicant submitted that:

• — The Chinese State engages in an interventionist economic policy in pursuance of goals that coincide with the political agenda set by the CCP rather than reflect the prevailing economic conditions in free market. With the high level of government intervention in the steel industry and a high share of State-owned enterprises (‘SOEs’) in the sector, even privately owned steel producers are prevented from operating under market conditions. As such the steel market is to a significant extent served by enterprises which operate under the ownership, control and policy supervision of the Chinese authorities;

• — The Chinese State does not only actively formulate and oversee the implementation of general economic policies by individual SOEs, but it also claims its rights to participate in operational decision-making in SOEs. This is typically done through the rotation of cadres between government authorities and SOEs, through presence of party members in SOEs’ executive bodies and of party cells in companies, as well as by shaping the corporate structure of the SOE sector. In exchange, SOEs enjoy a particular status within the Chinese economy. This status entails a number of economic benefits, in particular the shielding from competition and the preferential access to relevant inputs, including financing;

• — The steel industry is regarded as a fundamental sector of the Chinese economy, a national cornerstone ²⁵ by the Chinese government, and as such is a particularly supported industry ²⁶. The current problem of overcapacity ²⁷ is arguably the clearest illustration of the implications of the Chinese Government’s policies for the industry and the resulting distortions;

• — The Chinese bankruptcy system appears to be inadequate to deliver on its own main objectives such as to settle claims and debts fairly and to safeguard the lawful rights and interests of creditors and debtors;

• — The Chinese government is controlling raw materials’ prices as export volumes are restricted through export quotas and exporters need to apply for an export license. In a previous investigation ²⁸ the Commission has found that ‘coke (together with iron ore, the major raw material to produce steel) is subject to quantitative restrictions on exports and to an export duty’;

• — The shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in China. All land is owned by the Chinese State (collectively owned rural land and State-owned urban land). Its allocation remains solely dependent on the State ²⁹;

• — Workers and employers are impeded in their rights to collective organisation and mobility is restricted by the household registration system, which limits access to the full range of social security and other benefits. This leads to wage costs being distorted since they do not result from normal market forces or negotiation between companies and the work force;

• — The Chinese financial system is characterised by the strong position of State-owned banks, which, when granting access to finance, take into consideration criteria other than economic viability of a project. Prudential rules such as the need to examine the creditworthiness of the borrower may exist formally, however, the overwhelming evidence, including findings made during trade defence investigations, suggests that these provisions play only a secondary role in the application of the various legal instruments;

• — The banks comply with an explicit legal obligation to conduct their business in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State. Furthermore, borrowing costs have been kept artificially low to stimulate investment growth, which has led to the excessive use of capital investment with ever-lower returns on investment.

• (51) The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the Report and the additional evidence provided by the applicant, on the existence of significant distortions and/or appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.

• (52) Specifically in the sector of the product under review, i.e. the steel sector, a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation. Since there was no cooperation from Chinese exporters of the product under review, the exact ratio of the private and state-owned producers could not be determined. However, the investigation confirmed that the two largest producers in the steel sector, namely Angang Steel Group (‘Ansteel’) and China Baowu Steel Group (‘Baowu’) are either fully State-owned or the State holds a controlling stake. In any event, even when specific information may not be available for the product under review, the sector represents a sub-sector of the steel industry and the findings concerning the steel sector are therefore deemed indicative also for the product under review.

• (53) Both public and privately owned enterprises in the steel sector are subject to policy supervision and guidance. The latest Chinese policy documents concerning the steel sector confirm the continued importance which GOC attributes to the sector, including the intention to intervene in the sector in order to shape it in line with the government policies. This is exemplified by the Ministry of Industry and Information Technology’s draft Guiding Opinion on Fostering a High Quality Development of Steel Industry, which calls for further consolidation of the industrial foundation and significant improvement in the modernization level of the industrial chain ³⁰, by the 14^th FYP on Developing the Raw Material Industry according to which the sector will ‘adhere to the combination of market leadership and government promotion’ and will ‘cultivate a group of leading companies with ecological leadership and core competitiveness’ ³¹, or also by the 14^th FYP on Developing Scrap Steel Industry whose key objectives is to ‘continuously increase the application ratio of scrap steel, and by the end of the 14^th FYP, the comprehensive scrap ratio of national steel making will reach 30 %.’ ³²

• (54) Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the sector can be seen at the provincial level, such as in Hebei which plans to ‘steadily implement the group development of organizations, accelerate the reform of mixed ownership of state-owned enterprises, focus on promoting the cross-regional merger and reorganization of private iron and steel enterprises, and strive to establish 1-2 world-class large groups, 3-5 large groups with domestic influence as the support’ and to ‘further expand the recycling and circulation channels of scrap steel, strengthen the screening and classification of scrap steel.’ ³³. Moreover, Hebei’s plan in the steel sector specifically includes several references to hot-rolled steel products: ‘Encourage plate production enterprises to speed up the implementation the transformation of low-level hot-rolling mills (…) and strive to ensure that by 2022 hot-rolled primary plates account for more than 30 % of deep processing operations ³⁴ ‘. Furthermore: ‘Consolidate the advantages of the wire and bar market. Encourage wire and bar manufacturers to carry out R & D and production of hot-rolled ribbed steel bars over 500 MPa, and lead product upgrades. Support special steel enterprises to combine technology and equipment transformation and upgrade and develop bearing steel, gear steel and other special steel products’.

• (55) Similarly, the Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14^th FYP foresees the ‘construction of characteristic steel production bases […], build 6 characteristic steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhouou, etc., and improve the scale, intensification and specialization of the industry. Among them, by 2025, the production capacity of pig iron in Anyang will be controlled within 14 million tons, and the production capacity of crude steel will be controlled within 15 million tons.’ ³⁵ The Henan Implementation Plan also includes specific references to hot-rolled products: ‘Support independent hot-rolling enterprises to participate in the merger and reorganization of iron and steel enterprises, and improve the resilience and concentration of the industrial chain. ³⁶ ’ Further industrial policy objectives can also be seen in the planning documents of other provinces, such as Jiangsu ³⁷, Shandong ³⁸, Shanxi ³⁹, or Zhejiang ⁴⁰ or municipalities, such as Liaoning Dalian ⁴¹.

• (56) As to the GOC being in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation, due to the lack of cooperation from the side of the exporting producers, it was impossible to systematically establish the existence of personal connections between producers of the product under review and the CCP. However, given that the product under review represents a subsector of the steel sector, information available with respect to steel producers is relevant also to the product under review.

• (57) For instance, Ansteel’s Chairman serves at the same time as the Secretary of the Party Committee. Similarly, the Director and General Manager of Ansteel occupies the position of the Party Committee’s Deputy Secretary ⁴². In the case of Baowu, the Chairman of Baosteel, which is a subsidiary held at 100 % by Baowu, holds at the same time the position of Secretary of the Party Committee, whereas the Managing Director serves also as the Deputy Secretary of the Party Committee and the Deputy General Manager serves as a Member of the Standing Committee of the Party Committee ⁴³.

• (58) Further, policies discriminating in favour of domestic producers or otherwise influencing the market in the sense of Article 2(6a)(b), third indent of the basic Regulation are in place in the sector of the product under review. As described above in recital (54) concerning the Hebei’s action plan and in recital (55) concerning Henan’s action plan, the investigation could identify some documents guiding specifically the development of the hot rolled flat steel subsector. Moreover, the investigation identified other documents showing that the industry benefits from governmental guidance and intervention in the steel sector, given that the product under review represents one of its subsectors.

• (59) The steel industry keeps being regarded as a key industry by the GOC ⁴⁴. This is confirmed in the numerous plans, directives and other documents focused on steel, which are issued at national, regional and municipal level. Under the 14^th Five Years Plan adopted in March 2021, the GOC earmarked the steel industry for transformation and upgrade, as well as optimization and structural adjustment ⁴⁵. Similarly, the 14^th Five Years Plan on Developing the Raw Materials Industry, applicable also to the steel industry, lists the sector as the ‘bedrock of the real economy’ and ‘a key field that shapes China’s international competitive edge’ and sets a number of objectives and working methods which would drive the development of the steel sector in the time period 2021-2025, such a technological upgrade, improving the structure of the sector (not least by means of further corporate concentrations) or digital transformation ⁴⁶.

• (60) The important raw material used for the production of hot rolled flat steel is iron ore. Iron ore is also mentioned in the 14^th FYP on Developing the Raw Materials Industry, in which the State plans to ‘rationally develop domestic mineral resources. Strengthen the exploration of iron ore […], implement preferential tax policies, encourage the adoption of advanced technology and equipment to reduce the generation of mining solid waste.’ ⁴⁷ In provinces, such as Hebei, the authorities foresee the following for the sector: ‘new project investment discount subsidy; explore and guide financial institutions to provide low-interest loans for iron and steel enterprises to switch to new industries, and at the same time, the government will provide discount subsidies.’ ⁴⁸ In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of the main raw materials used in the manufacturing of the product under review. Such measures impede market forces from operating freely.

• (61) The present investigation revealed some evidence of the discriminatory application or inadequate enforcement of bankruptcy and property laws according to Article 2(6a)(b), fourth indent of the basic Regulation in the hot rolled flat steel sector. In particular, concerning the factory of Chaoyang Iron & Steel, which was incurring losses for 5 consecutive years (from 2010 to 2015) and was on the verge of bankruptcy. It was also identified as a ‘zombie enterprise’ by the State-owned Assets Supervision ⁴⁹.

• (62) The hot rolled flat steel sector is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation, as also referred to above in recital (46). Those distortions affect the sector both directly (when producing the product under review or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in the PRC) ⁵⁰.

• (63) Moreover, no evidence was submitted in the present investigation demonstrating that the sector of the product under review is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, as also referred to above in recital (46). Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (64) Finally, the Commission recalls that in order to produce the product under review, a number of inputs is needed. When the producers of hot rolled flat steel purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

• (65) As a consequence, not only the domestic sales prices of hot rolled flat steel are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout the PRC. This means, for instance, that an input that, in itself was produced in the PRC by combining a range of factors of production, is exposed to significant distortions. The same applies for the input to the input and so forth.

• (66) On 19 May 2022 ⁵¹ and on 16 September 2022 ⁵², CISA submitted a number of arguments concerning the allegations on significant distortions. First, CISA claimed that the Report relied on by the Commission failed to meet the standards of impartial and objective evidence and evidence of sufficient probative value, given in particular that it was prepared by the Commission with the specific purpose of facilitating Union industries to lodge a complaint in the area of trade measures. Furthermore, CISA claimed that since the Report was published in 2017, it could not reflect the alleged distortions for the investigation period covering the 2021 calendar year.

• (67) The Commission disagreed. The Commission noted that the Report is a comprehensive document based on extensive objective evidence, including legislation, regulations and other official policy documents published by the GOC, third party reports from international organisations, academic studies and articles by scholars, and other reliable independent sources. It was made publicly available since December 2017, so that any interested party would have had ample opportunity to rebut, supplement or comment on it and the evidence on which it is based, and neither the GOC nor other parties have submitted arguments or evidence rebutting the sources included in the Report. Likewise, regarding the argument that the Report was outdated, the Commission noted in particular that the main policy documents and evidence contained in the Report, including the relevant five-year plans and legislation applicable to the product under review were mostly still relevant during the review investigation period, and that no parties have proven that this was no longer the case. China only started publishing new five-year plans throughout year 2021 and a lot of those plans were only made public in the second half of the year. This was further confirmed through the case-specific research undertaken by the Commission, as summarised above.

• (68) Second, CISA submitted that the WTO Anti-Dumping Agreement (‘ADA’) does not recognize the concept of significant distortions in Article 2.2 of ADA. Instead, the provision allows the construction of the normal value in a limited number of specific conditions, with significant distortions not featuring among such conditions. Moreover, CISA submitted that Article 2.2 of ADA only permits using the cost of production in the country of origin plus a reasonable amount for administrative, selling and general costs and profits whereas, Article 2(6a) of the basic Regulation allows the use of data from and appropriate representative country, thereby being WTO inconsistent. Furthermore, CISA claimed that any constructed value would need to be calculated in accordance with Article 2.2.1.1 of ADA and in line with the interpretation by WTO Appellate Body given in the EU – Biodiesel (DS 473) case, as well as by the WTO Panel in the EU – Cost Adjustment Methodologies II (Russia) (DS494) case, which do not mention the concept of significant distortions nor the possibility to disregard the exporting company’s data.

• (69) The Commission considered that the provisions of Article 2(6a) of the basic Regulation are fully consistent with the European Union’s WTO obligations and the jurisprudence cited by CISA. Furthermore, it is the Commission’s view that, in accordance with the decision of the WTO Panel and the Appellate Body in DS473, the provisions of the basic Regulation that apply generally with respect to all WTO Members, such as Article 2(5), second subparagraph, permit the use of data from a third country, duly adjusted when such adjustment is necessary and substantiated. The existence of significant distortions renders costs and prices in the exporting country inappropriate for the construction of normal value. In these circumstances, Article 2(6a) of the basic Regulation envisages the construction of costs of production and sale on the basis of undistorted prices or benchmarks, including those in an appropriate representative country with a similar level of development as the exporting country. In relation to the DS 494, the Commission recalled that both the EU and the Russian Federation appealed the findings of the Panel, which are not final and therefore, according to standing WTO case-law, have no legal status in the WTO system, since they have not been endorsed by the Dispute Settlement Body through a decision by the WTO Members. In any event, the Panel Report in this dispute specifically considered the provisions in Article 2(6a) of the basic Regulation to be outside of the scope of that dispute. Therefore, the Commission rejected this claim.

• (70) Third, CISA argued that the practice of referring to past investigations as ‘evidence’ of certain allegations, as done by the applicant in the request in the present investigation, would likely not withstand the Appellate Body’s approach on the burden of proof, as set out in the WTO Appellate Body’s ruling in the US – Definitive Antidumping and Countervailing Duties on Certain Products (China) (DS 379) case. In particular, CISA referred to the findings made by the Commission in its anti-subsidy investigation as regards HRF ⁵³.

• (71) The Commission disputes that argument. On the one hand, the request did not only rely on the HRF CVD but also added additional sources to substantiate the claim regarding the distortions in the HRFS market ⁵⁴. On the other hand, the Commission is not making its conclusions about applicability of 2(6a) on the basis of the request but on the basis of all evidence available, as collected during the investigation and presented in its entirety in this section.

• (72) Fourth, CISA raised the issue of the 14^th FYP, pointing out that, on the one hand, the 14^th FYP indeed references the steel sector but only in a general context, noting the importance of generally transforming and upgrading traditional industries and that on the other hand, the plan should not be considered binding law but rather a guiding document expressing policy views for the future. Furthermore, CISA considered that such plans exist also in the EU with the publication of the European Commission’s ‘White Papers’, ‘Green Papers’ etc.

• (73) This argument could not be accepted. First of all, the FYPs published by the GOC are not merely general guidance documents, but are of a legally binding nature. In this respect, the Commission referred to the detailed analysis of the plans in Chapter 4 of the Report, with a section specifically dedicated to the binding nature of plans in Section 4.3.1. The 14^th FYP explicitly reminds all authorities to diligently implement the plans: ‘We will strengthen planning management systems such as catalogues and lists, compilation and archival, and alignment and coordination, develop lists and catalogues such as the “14th Five-Year” National-Level Special Plans, promote plan archival relying on the national planning integrated management information platform, and bring various plans under unified management. We will establish and improve planning alignment and coordination mechanisms, align plans approved by the CCP Central Committee and the State Council and provincial development plans with this plan before submission for approval, ensure that national-level spatial planning, special planning, regional planning, and other levels of planning are coordinated with this plan in terms of main goals, development directions, overall layout, major policies, major projects, and risk prevention and control.’ ⁵⁵ Furthermore, the 14^th FYP on Developing the Raw Materials Industry stipulates that ‘all localities need to better themselves with this Plan, and include the main contents and major projects herein in their primary local tasks’, while ‘steel and other key sectors shall formulate specific implementation opinions based on the objectives and tasks of this Plan.’ ⁵⁶

• (74) No evidence or argument to the contrary has been adduced by the GOC in the present investigation.

• (75) After disclosure, CISA further emphasised that the Report fails to meet the standards of impartial and objective evidence and evidence of sufficient probative value. In relation to the above, CISA further referred to the various ‘Five-Year Plans’ which, according to CISA, should be seen as a general policy document setting various priorities in terms of public investments and not as binding law.

• (76) As explained in recitals (67) and (73) these claims were rejected and since no additional evidence or argument was submitted upon disclosure the Commission decision remained unchanged.

• (77) In sum, the evidence available showed that prices or costs of the product under review, 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, as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as described in the following section.

3.4.1.   Representative country

3.4.1.1.   General remarks

• (78) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:

• — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank ⁵⁷;

• — Production of the product under review in that country ⁵⁸;

• — Availability of relevant public data in the representative country.

• — Where there is more than one possible representative country, preference should be given, where appropriate, to the country with an adequate level of social and environmental protection.

• (79) As indicated in recital (38), on 29 August 2022, the Commission issued a note for the file on the sources for the determination of the normal value (the ‘FOP Note’). The note described the facts and evidence underlying the relevant criteria and informed interested parties of the intention to consider Mexico as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

• (80) In line with the criteria listed under Article 2(6a) of the basic Regulation, the Commission identified Mexico as a country with a similar level of economic development as the PRC. Mexico is classified by the World Bank as ‘upper-middle income’ country on a gross national income basis. Furthermore, Mexico was identified as a country where the product under review is being produced and where relevant data was readily available.

• (81) Finally, given the absence of cooperation and having established that Mexico was an appropriate representative country, based on all of the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.

3.4.1.2.   Conclusion

• (82) In the absence of cooperation, as proposed in the expiry review request and given that Mexico met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation, the Commission selected Mexico as appropriate representative country.

3.4.2.   Sources used to establish undistorted costs

• (83) In the note on relevant sources to use for the determination of the normal value, the Commission explained that, due to the absence of cooperation, it would need to rely on facts available according to Article 18 of the basic Regulation. The choice of representative country was based on the information contained in the expiry review request, combined with other sources of information deemed appropriate according to the relevant criteria laid down in Article 2(6a) of the basic Regulation, in accordance with Article 18(5) of the basic Regulation, including Global Trade Atlas (‘GTA’) to establish the undistorted cost of most of the factors of production, notably the raw materials. In addition, the Commission stated that it would use the following sources for establishing undistorted costs of energy: for the electricity, the latest available data on electricity industrial prices applicable in Mexico, as published by Globalpetrolprices.com ⁵⁹ and for the gas the price published by Indices de Referencia de Precios de Gas Natural (IPGN) ⁶⁰. Moreover, the Commission stated that for establishing undistorted costs of labour it would use the last publicly available data from International Labour Organisation Department of Statistics (ILOSTAT) ⁶¹ to determine the wages in Mexico.

• (84) The Commission included a value for manufacturing overhead costs in order to cover costs not included in the factors of production referred to above. The Commission established the ratio of manufacturing overheads to the direct costs of manufacturing, based on data of Union producers provided by the applicant, which provided specific information for that purpose.

• (85) In the FOP Note the Commission indicated that for the country identified as country where product under review is being produced, i.e. Mexico, the Commission identified the company Ternium S.A. as a producer of the product under review, with recent public financial data showing profits and reasonable amount for SG&A for establishing the undistorted normal value.

• (86) The analysis of import data showed that Mexico could be used as an appropriate representative country as their imports of the main factors of production were not materially affected by imports from PRC or any of the countries listed in Annex I to Regulation (EU) 2015/755 ⁶².

• (87) In light of the above considerations, the Commission informed the interested parties that it intended to use Mexico as an appropriate representative country and the company Ternium S.A, in accordance with Article 2(6a)(a), first ident of the basic Regulation, in order to source undistorted prices or benchmarks for the calculation of normal value.

• (88) Interested parties were invited to comment on the appropriateness of Mexico as a representative country and of Ternium S.A as producers in the representative country.

• (89) In their comments, CISA argued that among the several representative countries which the Commission has recently chosen, Mexico is the only one that is unable to report import prices on a CIF level and challenged the Commission’s approach to add 5 % to the FOB price in order to convert the FOB price into a CIF one. The Commission observed that even if that conversion ratio was not applied, the price difference between the normal value and the export price to the rest of the world established in recital (118) below would have been significant. Consequently, it rejected the claim.

• (90) CISA also argued that the benchmark for ferroalloys was not reliable because the HS codes used consisted of several different alloys with very different unit prices. The Commission observed that CISA failed to indicate which type(s) of alloys should be removed from the aggregated data for that benchmark price. Furthermore, the Commission considered that this claim was without object because even if no benchmark price was established for this input, as explained in recital (118) below, the price difference between the normal value and the export price to the rest of the world established would remain significant. Consequently, it rejected the claim.

• (91) CISA also challenged the appropriateness of the financial results of Ternium S.A. since they are reported at a consolidated level covering several countries and other products.

• (92) The Commission considered that in the case at hand the use of Ternium S.A.’s consolidated data was appropriate in the absence of more detailed data limited to Ternium Mexico and to the product under review. In addition, the company produces predominantly steel products. Therefore, its data was considered representative for the steel sector and the product under review. Moreover, Article 2(6a)(a) of the basic Regulation requires that the amount for SG&A costs and for profits included in the constructed normal value should be undistorted and reasonable. CISA neither argued nor substantiated the argument that the amount used was either distorted or unreasonable. This claim was therefore rejected.

• (93) CISA alleged that the use of Ternium S.A.’s financial data from 2020 was incompatible with the review investigation period that is 2021. The Commission considered the figures of Ternium S.A. as reasonable since the company was profit-making during the review investigation period, its financial statements were readily available and Mexico represents 52 % of its consolidated sales. Furthermore, the Commission considered that, in the context of this investigation, use of 2020 as reference year is justified as it is the most recent year when Ternium S.A. was profitable and showed a reasonable level of SG&A and profit. As explained in the FOP note, in financial year 2021 the profit was exceptionally high, i.e. 58,25 %, likely reflecting the post COVID-19 recovery. Consequently, the Commission considered that using the data for 2020 was more appropriate and rejected the claim.

• (94) After disclosure, CISA claimed that the Commission did not provide the disclosure of ‘Benchmarks used for the purpose of determining the normal value’ which, according to CISA, may lead to an imminent breach of the basic principle of anti-dumping law and procedure, in particular Article 20 of the basic Regulation, and the rights of defence of CISA with respect to fundamental aspects of the expiry review investigation. Furthermore, CISA stated that providing detailed benchmark prices (and the calculations) for the purpose of determining the normal value is a consistent practice of the Commission, both in original investigations and in expiry reviews, and therefore requests the Commission to align its practice in similar proceedings.

• (95) The Commission noted that it provided benchmark prices i.e. unit values of the main factors of production in the FOP Note from 29 August 2022 as well as their sources. CISA, as an interested party, was notified when the FOP Note was placed on the file and had access to it. None of the benchmarks quoted in that Note had been subsequently modified. Furthermore, the Commission used the same methodology to calculate the normal value as in the request which was made available to all interested parties. Finally, the Commission recalled that no company-specific disclosure took place given the lack of cooperation by any of the producers in the PRC. Consequently, the claim was rejected.

3.4.2.1.   Conclusion

• (96) In view of the above analysis, Mexico met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country.

3.4.3.   Undistorted costs and benchmarks

3.4.3.1.   Factors of production

• (97) Considering all the information based on the request and after analysing the comments from interested parties, the following factors of production and their sources have been identified in order to determine the normal value, in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of certain hot rolled flat products of iron, non-alloy or other alloy steel

Factor of Production	Commodity Code	Undistorted value in CNY	Unit of measurement
Raw materials	Raw materials	Raw materials	Raw materials
Steel scrap	72041001 ; 72042101 ; 72042999 ; 72044101 ; 72044999	3 135,04	Tonne
Iron ore	26011101 ; 260112	3 364,05	Tonne
Coal	270119 ; 27011201	757,98	Tonne
Coke	27040003 ; 27131101	1 249,21	Tonne
Ferroalloys	72022102 ; 72022199 ; 72022999 ; 72023001 ; 72024101 ; 72024999 ; 72027001 ; 72029104 ; 72029202 ; 72029301 ; 72029999	18 560,08	Tonne
Slabs	720712 ; 72072002 ; 72241006 ; 722490	4 980,54	Tonne
By-product:	By-product:	By-product:	By-product:
Credits & By-products valued as scrap	72041001 ; 72042101 ; 72042999 ; 72044101 ; 72044999	3 135,04	Tonne
Labour	Labour	Labour	Labour
Labour		13,00	per man hour
Energy	Energy	Energy	Energy
Electricity		1 058,69	MWH
Natural gas		34,42	GJ
Oxygen	280440	514,52	Km3

3.4.3.2.   Raw materials

• (98) In order to establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA, to which import duties were added. An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries, excluding the PRC and countries which are not members of the WTO, listed in Annex I of Regulation (EU) 2015/755. The Commission decided to exclude imports from the PRC into the representative country as it concluded in recital (77) that it is not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions, in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices. 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.

• (99) Normally, domestic transport prices should also be added to these import prices. However, considering the finding in section 3.4 as well as the nature of this expiry review investigation, which is focused on finding whether dumping continued during the review investigation period or could reoccur, rather than finding its exact magnitude, the Commission decided that adjustments for domestic transport were unnecessary. Such adjustments would only result in increasing the normal value and hence the dumping margin.

3.4.3.3.   Labour

• (100) ILOSTAT publishes detailed information on wages in different economic sectors in Mexico. The Commission used the latest available statistics for 2021, for average labour cost and average weekly hours worked in Mexico.

3.4.3.4.   Electricity

• (101) The price of electricity for companies (industrial users) in Mexico is published by Globalpetrolprices.com. The Commission used the data on the industrial electricity prices for September 2021.

3.4.3.5.   Natural gas