Commission Implementing Regulation (EU) 2023/1123 of 7 June 2023 imposing a definitive countervailing 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 18 of Regulation (EU) 2016/1037 of the European Parliament and of the Council

• (152) After the imposition of measures in 2017, imports from China dropped to an insignificant level, with a negligible market share of 0,002 % in 2018. From 2018 to 2020, imports declined even further. During the review investigation period, imports from the PRC, however, spiked in April 2021 in comparison to the low levels in the preceding three years. Market share, however, remained very low at 0,1 %.

• (153) Chinese import prices as reported in Eurostat were exceptionally high during 2018, 2019 and 2020, though they plummeted during the review investigation period. The exceptionally high import prices from 2018 to 2020 are likely connected with the fact that China exported a negligible volume to the Union which cannot be considered reliable.

• (154) The Commission considered that Chinese import prices reported in Eurostat during the period considered are not representative of HRF average prices due to the very low volume of imports from the PRC during that period and that they could not be used to draw meaningful or relevant conclusions.

• (155) The imports of the product under review from other third countries developed as follows:

Table 3

Imports from third countries

Country		2018	2019	2020	Review investigation period
Total of all third countries except the PRC	Volume (000 tonnes)	7 997	7 225	5 879	9 635
	Index	100	90	74	120
	Market share (%)	23	22	21	28
	Average price (EUR/tonne)	532	482	428	765
	Index	100	90	80	144
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (156) Total imports of the product under review from third countries other than the country concerned decreased from 2018 to 2020 by 26 % and sharply increased in 2021 to reach a market share of 28 %, which is 20 % above the 2018 level. Overall, the Union imports HRF from more than 40 countries worldwide. The five biggest exporters of HRF to the EU during the review investigation period were Russia, India, Türkiye, Egypt and Taiwan, representing 18 % of the Union free market and 65 % of all imports of HRF. Individually, Russia was the largest exporter with a market share of 5,8 % whilst the other four countries held a market share between 2 % and 4 %, respectively. No other country holds a market share above 2 %. Among the biggest exporters, imports from Russia ⁵¹ and Türkiye ⁵² are currently covered by anti-dumping measures.

5.4.   Economic situation of the Union industry

5.4.1.   General remarks

• (157) In accordance with Article 8(4) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (158) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data provided by the applicant that 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. Both sets of data were found to be representative of the economic situation of the Union industry.

• (159) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, employment, productivity, magnitude of the amount of countervailable subsidies and recovery from past subsidisation.

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

• (161) As explained in recitals (143) – (144), to provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire production of the product concerned and determined whether the production was destined for the captive or the free market. Where relevant and possible the Commission analysed separately injury indicators related to the free and the captive market.

5.4.2.   Macroeconomic indicators

5.4.2.1.   Production, production capacity and capacity utilisation

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

Table 4

Production, production capacity and capacity utilisation

	2018	2019	2020	Review investigation period
Production volume (000 tonnes)	75 626	70 920	61 096	69 531
Index	100	94	81	92
Production capacity (000 tonnes)	90 923	92 584	91 965	93 249
Index	100	102	101	103
Capacity utilisation (%)	83	77	66	75
Index	100	92	80	90
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (163) The production volume of the Union industry followed a similar trend as total Union consumption and decreased overall by around 8 % during the period considered, with a significant drop in 2020 followed by a recovery due to the reasons explained in recital (146).

• (164) While the production capacity of the Union industry slightly increased during the period considered by 3 %, the capacity utilisation followed the same negative trend as production volume and consumption and decreased by 10 % between 2018 and the review investigation period.

5.4.2.2.   Sales volume and market share

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

Table 5

Sales volume and market share in the free market (000 tonnes)

	2018	2019	2020	Review investigation period
Sales on the free market	26 534	25 185	22 020	25 205
Index	100	95	83	95
Market share (%)	77	78	79	72
Index	100	101	104	99
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (166) The Union industry sales volume on the Union market followed the trend of consumption during the period considered. It decreased between 2018 and 2020 for the reasons explained in recital (146), followed by a rebound in the review investigation period. Yet, the rebound in the review investigation periodwas still below 2018 levels.

• (167) During the period considered, the Union industry’s market share in terms of Union consumption increased slightly from 2018 to 2020 from 77 to 79 % to drop by seven percentage points between 2020 and the review investigation period to 72 %. As shown in table 4, this decline is explained by the fact that the market share of imports from third countries increased by 7 % between 2020 and the review investigation period, which explains the loss of the Union industry on the free market share.

Table 6

Captive volume on the Union market and market share (000 tonnes)

	2018	2019	2020	Review investigation period
Captive volume on the Union market	45 289	42 011	36 989	40 424
Index	100	93	82	89
Total production of Union Industry	75 626	70 920	61 096	69 531
% of captive volume compared to total production	59,9	59,2	60,5	58,1
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (168) The Union industry captive volume (composed of captive use and captive sales on the Union market) decreased by 18 % from 2018 to 2020 and recovered by 7 percentage points in 2021, resulting in an overall decrease of 11 % during the period considered, from about 45 million tonnes to 40 million tonnes from the start to the end of the review investigation period. Overall, the captive and free market followed the same trend. Therefore, the Commission concluded that development of the captive market did not have any significant impact on the Union industry performance on the free market.

• (169) The Union industry’s captive market share (expressed a percentage of total production) remained relatively stable during the period considered, ranging between 58,1 % and 60,5 %.

5.4.2.3.   Growth

• (170) In a context of decreasing consumption and production, the Union industry lost sales volume and market share on the free market. Overall, there was no growth for the Union industry over the period considered.

5.4.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2018	2019	2020	Review investigation period
Number of employees	41 161	38 980	36 207	38 470
Index	100	95	88	93
Productivity (unit/employee)	1 824	1 819	1 687	1 807
Index	100	100	93	99
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (172) Between 2018 and the review investigation period, the number of employees engaged in the production of the product under review followed the trend of the volume of Union production, it decreased sharply between 2018 and 2020 to recover slightly during the review investigation period. Overall resulting in a decrease by 7 % over the period considered.

• (173) The productivity of the Union industry’s workforce, measured as output (tonnes) per employee, remained overall stable during the period considered.

5.4.2.5.   Magnitude of the amount of countervailing subsidies and recovery from past subsidisation

• (174) The Commission concluded that there is sufficient evidence showing that the producers continued receiving countervailable subsidies during the review investigation period. The amount of countervailing subsidies for China, specified above in the subsidy section, is significant.

• (175) The anti-subsidy measures imposed following the original investigation allowed the Union industry to recover from past subsidisation, as is shown by the data for 2018. This was also confirmed by the Commission findings in the anti-dumping investigation against hot-rolled flat products from Türkiye ⁵³.

5.4.3.   Microeconomic indicators

5.4.3.1.   Prices and factors affecting prices

• (176) The average unit sales prices of the sampled Union producers to 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	Review investigation period
Average unit sales price on the free market	549	509	450	734
Index	100	93	82	134
Unit cost of production	518	557	534	669
Index	100	108	103	129
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (177) The Union industry’s average sales prices decreased by 17 % between 2018 and 2020 and increased drastically by 34 % in 2021. The trend of unit sales prices during the period considered was influenced by the severe disruptions caused by the COVID-19 pandemic and the post-pandemic resumption in demand. In 2021, high steel demand, tight supply, and increased cost of production were the factors that influenced the sudden and significant rise in the unit sales price.

• (178) The unit cost of production increased over the period concerned by 29 %. However, in 2019 the cost of production increased whilst the unit sales prices dropped. The inability for the Union industry to reflect the increased cost of production in their sales price was due to large volumes of dumped imports from Türkiye, pushing the prices downwards. In 2020, both cost of production and sales prices dropped, but the former to a smaller extent. This was due to the slump in the market during the COVID-19 pandemic, depressing prices significantly whilst the cost of production was less affected. The unit cost of production surged in 2021 due to a jump in energy and commodity prices. However, due to the post-COVID recovery demand surged as well and consequently, prices also increased significantly (more than 50 % between 2020 and the review investigation period), even more than the increase in production costs in the same period.

5.4.3.2.   Labour costs

• (179) 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	Review investigation period
Average labour costs per employee (EUR/FTE)	64 164	69 352	69 748	78 444
Index	100	108	109	122
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (180) During the period considered average labour costs increased by 22 %. While the number of employees in the review investigation period went down, compared to 2018, the average labour cost per employee increased.

5.4.3.3.   Inventories

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

Table 10

Inventories

	2018	2019	2020	Review investigation period
Closing stocks (tonnes)	631 608	533 200	390 880	522 405
Index	100	84	62	83
Closing stocks as a percentage of production	5,0	4,5	3,8	4,6
Index	100	90	76	92
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (182) During the period considered, the Union industry stock of HRF decreased continuously, with a drastic fall in 2020, which is explained by the effects of the Covid-19 pandemic, and a rebound in 2021. The HRF industry in the Union is characterised by framework contracts (monthly, quarterly, yearly) between producers and customers that fix the quantities and prices. These framework contracts are implemented through purchasing orders according to customers’ needs. As a result, the Union industry can plan its production and inventories. Accordingly, and as also established in the original investigation, stocks are not considered an important injury indicator for this industry, since most types of the like product are produced by the Union industry based on specific orders of the users.

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

• (183) 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	Review investigation period
Profitability of sales in the Union free market (% of sales turnover)	8,4	-7,2	-18,0	14,1
Index	100	-86	- 214	168
Cash flow (EUR)	496 319 788	-6 211 922	- 130 468 840	645 183 908
Index	100	-1,3	-26	130
Investments (EUR)	216 927 207	433 154 031	181 406 902	394 535 083
Index	100	200	84	182
Return on investments (%)	9,1	-6,0	-13,3	17,4
Index	100	-66	- 146	191
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (184) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the free market sales of the like product in the Union as a percentage of the turnover of those sales.

• (185) Profitability fluctuated during the period considered although overall profitability increased by 5,7 percentage points during the period considered. After the imposition of measures in 2017, the industry recovered and recorded a profit in 2018. Losses were, however, incurred in 2019 and profitability reached its lowest level, namely -18 %, in 2020 at the core of the pandemic, while in 2021 profit strongly rebounded to 14,1 %. At the same time, following the imposition of measures against the PRC, dumped imports at low prices from Türkiye rapidly increased, which explains the drop in profitability in 2019. This decrease in profitability was then exacerbated by the shocks caused by the global pandemic in 2020, such as supply chain disruptions and the decline in steel consumption. Spike in steel demand, coupled with increased sales prices, led to unusually high profits in 2021, which marked an exceptional year for the Union industry.

• (186) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in a similar manner to profitability: a drastic fall in 2019-2020, followed by strong rebound in the review investigation period.

• (187) Between 2018 and the review investigation period, investments increased by 82 %. Overall, during the period considered, the investment flows followed a bimodal distribution: investment increased significantly in 2019, followed by a drop in 2020 and a second peak in 2021. In general, the investments were aimed at improving quality and greening of production.

• (188) The return on investments (ROI) is the profit in percentage of the net book value of investments. The return on investment significantly improved during the review investigation period as compared to 2018. In fact, during the period considered, the ROI increased by 8,3 percentage points. It developed in a similar way as the profitability: a drastic fall in 2019 and 2020, followed by strong rebound in the review investigation period.

• (189) The sampled Union producers’ ability to raise capital was not affected during the review investigation period, which saw a speedy recovery from the pandemic.

5.5.   Conclusion on injury

• (190) Following the imposition of countervailing measures against imports of HRF from China in 2017, imports from China decreased and remained below the de minimis level during the period considered, allowing the Union industry to start recovering from the injurious effects of the subsidised imports from China and, as confirmed by in Commission Implementing Regulation (EU) 2021/1100 ⁵⁴ concerning imports of HRF originating in Türkiye, had recovered by the end of 2018. However, the recovery of the Union industry’s economic situation came to an abrupt halt and was reversed in 2019, when the Union industry had to compete with significant volumes of low-priced dumped imports from Türkiye, forcing it to set its prices below costs to keep its market share and thus causing a material injury to the Union industry ⁵⁵. In July 2021, the Commission imposed definitive measures against Türkiye and thanks to various factors at play, as explained in recital (185), the situation of the Union industry improved and recovered by the end of 2021 to an economic situation similar to that of 2018. Hence, during the review investigation period, the Union industry was no longer considered injured.

• (191) More particularly, almost all injury indicators, notably production, capacity utilisation, sales volumes and sales prices, employment and productivity, profit, cash flow and ROI followed a similar trend during the period considered. This trend was characterised by a decrease in 2019, a sharper decrease in 2020 and a rebound in the review investigation period to levels similar to those at the beginning of the period considered in 2018. The reason behind this irregular trend lies largely in the coincidence of a considerable influx of low-priced dumped imports of HRF from Türkiye and the unique dynamics created by the COVID-19 pandemic. Lockdowns and interruptions of industrial activity led to extremely low consumption levels and low demand for steel in 2020, whilst steel demand and prices soared in 2021 during the post-COVID recovery leading, amongst others, to exceptionally high profits for the steel industry during the review investigation period.

• (192) On the basis of the above, the Commission concluded that the Union industry did not suffer material injury within the meaning of Article 8 of the basic Regulation during the review investigation period.

• (193) However, the indicators cannot be analysed without considering the exceptionally favourable steel market conditions of 2021. In 2020, however, the pandemic-induced slowdown of industrial activity and its consequent decrease of steel demand, led to a severe downturn of the performance of the steel industry and global economy in general. In 2021, driven by a rebound in demand, steel consumption strongly bounced back, as did steel prices.

6. LIKELIHOOD OF RECURRENCE OF INJURY

• (194) As explained in recital (192), the Commission concluded that the Union industry did not suffer material injury during the review investigation period. On the other hand, as explained in recital (138), the Commission concluded that the repeal of the countervailing measures is likely to result in a redirection of significant volumes of subsidised imports of the product under review to the Union market. Therefore, the Commission assessed, in accordance with Article 18(2) of the basic Regulation, whether there would be a likelihood of recurrence of injury caused by the subsidised imports from the PRC if the measures were allowed to lapse.

• (195) In this regard, the Commission examined the production capacity and spare capacity in China, the attractiveness of the Union market and likely Chinese import prices and impact on the Union industry.

6.1.   Production capacity and spare capacity in the PRC

• (196) As described in recital (131), the producers in China have significant spare capacity. Indeed, Chinese estimated spare capacity corresponds to 89 % of the size of the EU free market consumption. This spare capacity could be used to produce the product under review for export to the Union if measures were allowed to lapse. Moreover, as stated in recital (132), shrinking Chinese steel demand is, and will be, a key driver of increasing exports. The resulting imbalance between capacity and demand in China is likely to increase pressure on Chinese producers to export.

• (197) In addition, one of main markets, the USA, is protected by anti-dumping measures on the product under review, which reduces access of the Chinese producers.

6.2.   Attractiveness of the Union market

• (198) As described in recital (134), the Union market is among the largest markets of certain hot-rolled flat steel products worldwide. Moreover, the Chinese market cannot absorb the excess steel capacity and major third countries markets are closed for Chinese exports as they have anti-dumping, safeguards or other protective measures in place against the PRC. Also, the price levels in the Union are higher than the average price charged by the Chinese exporters to the rest of the world. Therefore, the Union market represents an attractive target for the existing spare capacity in the PRC if anti-subsidy measures were to be repealed.

• (199) After disclosure, CISA contested the conclusions with regard to the attractiveness of the Union market, arguing that the Chinese steel industry relies on its domestic market, and that Chinese domestic consumption is ten times larger than the EU free market segment. It further highlighted that as of 1 August 2021, certain steel products, including hot-rolled flat steel, are no longer eligible for VAT export rebates, thus having a discouraging effect on exports and redirecting Chinese steel production to the Chinese domestic industry.

• (200) The Commission acknowledged that Chinese domestic HRF consumption is significantly larger the EU free market but as explained in recital (196), the producers in China have significant spare capacity which they are not able to deploy in their domestic market. There is thus nothing that prevent the Chinese producers to use this spare capacity to produce the product under review for export to the Union if measures were allowed to lapse. Besides, as stated in recital (132), shrinking Chinese steel demand is, and will be, a key driver of increasing exports. The resulting imbalance between capacity and demand in China is likely to increase pressure on Chinese producers to export. With regard to the alleged change in the VAT system, the Commission noted that CISA had not provided any evidence supporting the argument that the change of VAT rebates would have led, or will lead, to any significant changes in the export behaviour of Chinese producers. The Commission therefore rejected this claim as unsubstantiated.

6.3.   Likely Chinese import prices and impact on the Union industry

• (201) Taking into account the low volumes of imports from the PRC from 2018 until 2021, the Commission considered that the import prices reported in Eurostat could not be relied on to establish the likely prices of imports of HRF from China in the absence of anti-dumping measures. Instead, the Commission considered as a representative proxy export prices from the PRC to all third countries other than the Union (‘rest of the world’ or ‘ROW’).

• (202) The Commission established that during the review investigation period Chinese exports prices (FOB) to the rest of the world was on average 660 EUR/tonne. Based on that price and to determine a likely price at which Chinese exports would arrive at the Union border, the Commission added cost for insurance and freight. In the absence of cooperation from Chinese exporting producers the Commission resorted to the costs used in the original investigation, i.e. 52 EUR/tonnes, or 7,9 % of the price/tonne, as the best facts available. Accordingly, the Commission concluded that the likely import CIF price of Chinese exports of HRF to the Union would, absent measures, be not more than 712 EUR/tonne.

• (203) Given that statistical data, in the absence of cooperation of Chinese exporting producers, was used, only an average price per tonne for a large variety of product types could be established. Hence, in the absence of information at product type level the Commission could not carry out a precise undercutting calculation but had to limit itself to a price comparison between average prices per tonne.

• (204) The Chinese exports price thus determined was compared with the weighted average sales prices during the review investigation of the sampled Union producers charged to customers on the Union market, adjusted to an ex-works level.

• (205) The price comparison was made at the same level of trade and, in analogy with a precise undercutting calculation methodology, the result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the review investigation period. It showed that on average the Chinese exports to the Union would undercut Union industry’s average prices by around 8 %.

• (206) HRF is a highly price sensitive commodity product and as observed in the original investigation concerning imports of HRF from China and also in the investigation on the identical product from Türkiye, rather modest levels of price undercutting combined with large volumes are susceptible to have significant and immediate impact on the Union industry’s performance ⁵⁶. In both those investigations, undercutting margins below 5 % forced the Union industry to lower sales prices (or lose market share) to such an extent that it incurred material injury in the short term.

• (207) Given that the Union industry during the review investigation period had just rebounded from a turbulent and economically difficult period, including the Covid-19 pandemic, with accumulated losses, it is still in a fragile situation. In addition, the Commission established that various subsidy programmes continue to be offered by the GOC to the HRF industry and the Commission determined that the HRF industry benefited from a number of them during the review investigation period. It is therefore highly likely that the recurrence of low-priced subsidised imports from China in significant volumes that undercut Union prices would have a significant adverse effect on the Union industry’s performance, notably with regard to production, sales volumes and prices, profitability and investment needs, resulting in material injury recurring.

• (208) After disclosure, CISA challenged the selection of the period considered for the injury analysis. It argued that the dumped imports of HRF at increased volumes from Türkiye in 2019, the COVID-induced economic slowdown, and the post-pandemic recovery boom distorted the evidence serving as a basis for the dumping and injury analysis. It claimed that the Commission should have analysed a different period and suggested to examine an extended period, covering one or two years prior to the period considered (2016 – 2018) as well as post-RIP (2022).

• (209) The Commission rejected this claim. It recalled that the various elements listed by CISA as being capable of distorting the evidence during the period considered had been acknowledged and carefully considered in the Commission’s injury analysis. The Commission further observed that even if an extended period prior to the review investigation period would have been considered, as suggested by CISA, the same elements would still have been present. With regard to the review investigation period the Commission recalled that based on Article 6(1) of the basic Regulation, ‘an investigation period shall be selected which in the case of dumping shall, normally, cover a period of no less than six months immediately prior to the initiation of proceedings. Information relating to a period subsequent to the investigation period shall, normally, not be taken into account’. It is established case-law that the Commission cannot be required to incorporate in its calculations factors relating to a period subsequent to the investigation period, unless such factors disclose new developments which make the proposed anti-dumping duty manifestly inappropriate ⁵⁷. The same reasoning, by analogy, should apply to review investigations initiated under Article 11(2) of the basic Regulation. CISA did not provide any evidence tending to show that the developments that followed the review investigation period made the re-imposition of the duty manifestly inappropriate.

6.4.   Conclusion

• (210) On the basis of the above, it is concluded that the absence of measures would, in all likelihood, result in a significant increase of subsidised imports from the PRC at injurious prices and thus material injury would be likely to recur.

7. UNION INTEREST

• (211) In accordance with Article 31 of the basic Regulation, the Commission examined whether maintaining the existing anti-subsidy measures would be against the interest of the Union as whole. The determination of the Union interest was based on an appreciation of all the various interests involved.

7.1.   Interest of the Union industry

• (212) The Union industry is located in 15 Member States (Austria, Belgium, Czech Republic, Finland, France, Germany, Hungary, Italy, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Spain). It employs over 38 000 employees in relation to the product under review.

• (213) In the absence of measures, the Union industry will no longer be protected against the likely increase of subsidised imports from China, which will cause material injury. The effect of anti-subsidy measures will be positive for the Union producers, as measures will help the Union industry to continue its recovery from subsidised imports and effects from the COVID-19 pandemic. It is therefore clearly in the interest of the Union industry to maintain the measures.

7.2.   Interest of users and unrelated importers

• (214) The Commission contacted all known users and unrelated importers. No users or unrelated importers came forward and cooperated in this investigation by submitting a questionnaire reply. Given the lack of cooperation of users and unrelated importers and in the absence of any indications to the contrary, the continuation of the measures is not considered against the interest of users and importers.

• (215) Moreover, the Commission analysed whether measures against China would have a negative effect on the security of supply, as there are also measures in place on HRF against Türkiye, Brazil, Iran and Russia. The Union industry level of capacity utilisation was 75 % during the review investigation period, and the total production capacity exceeded the total Union consumption by 18 million tonnes, according to EUROFER’s macro questionnaire data. In addition, despite measures against some of the major exporters of HRF, almost 40 countries exported the product under review to the Union during the review investigation period, thus showing that the imposition of measures would not impinge upon diversification of supply. For these reasons and in the absence of cooperation by users and importers, the Commission concluded that there were no potential risks at the level of supply for downstream users.

• (216) After disclosure, CISA referred to the EU safeguard on imports of, inter alia, HRF from China, which significantly limits the possibility for Chinese producers to export HRF to the EU market and restrict the free trade flows to the detriment of downstream producers and end users.

• (217) The Commission recalled that the safeguard in question cannot be considered of a lasting nature, and that the measure currently in place ⁵⁸ has no impact on the assessment of the likelihood of increased imports in the absence of countervailing duties. Considering the temporary nature of the steel safeguard, the Commission hence found that they cannot have a bearing on its conclusions in this investigation. On the security of supply, as stated in recital (215), the Union industry’s total production capacity exceeded the total Union consumption, and several other third countries exported HRF to the Union during the review investigation period. Moreover, the safeguard measure is regularly review and adjusted if needed in order to ensure sufficient supply of steel in the Union market. Therefore, safeguards measures would not constitute a risk to the security of supply for downstream users.

• (218) In addition, CISA also claimed that the introduction of the Carbon Border Adjustment Mechanism (CBAM) would deteriorate the access to the EU market given the burdensome reporting obligations and surcharges linked to the CBAM.

• (219) The Commission recalled that the CBAM will only enter into force in October 2023 and that during a transitional period, until 2026, importers will only have to report emissions embedded in their goods without incurring any financial charges. The stated reason for this transnational period is to allow parties time to adjust before the final system is put into place and to reduce the risk of trade disruptions. Accordingly, the Commission considered that it is premature to make any assessment of the potential impact of CBAM on future trade flows of HRF and rejected the claim.

7.3.   Conclusion on Union interest

• (220) On the basis of the above, the Commission concluded that there were no compelling reasons of the Union interest against the continuation of the existing measures on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the PRC.

8. CLAIMS THAT THE MEASURES SHOULD BE SUSPENDED

• (221) Following disclosure, CISA claimed that the current anti-subsidy measures should be suspended in accordance with article 24(4) of the basic Regulation arguing that both conditions set out in the aforementioned Article 24(4) of the basic Regulation are fulfilled. It claimed that market conditions have temporarily changed to such an extent that injury would be unlikely to continue or occur as a result of the suspension. In that view, CISA referred to the expected decrease of the volume of imports from Russia and Ukraine, the supply shortages following incidents at HRF facilities in the European Union, and price increases of the product concerned.

• (222) The Commission rejected CISA’s claim, as it was generic and unsubstantiated. On the other hand, the review investigation has established that injury would be likely to recur in the absence of measures and, mutatis mutandis, also in case of a suspension.

9. ANTI-SUBSIDY MEASURES

• (223) On the basis of the conclusions reached by the Commission on continuation of subsidisation, recurrence of injury and Union interest, the anti-subsidy measures on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the PRC should be maintained.

• (224) To minimise the risks of circumvention due to the high difference in duty rates, special measures are needed to ensure the application of the individual countervailing duties. The companies with individual countervailing duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the countervailing duty applicable to ‘all other companies’.

• (225) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of countervailing duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (226) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting, in itself, a change in the pattern of trade due to the imposition of measures within the meaning of Article 23(1) of the basic Regulation. In such circumstances and provided the conditions are met, an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

• (227) The individual company countervailing duty rates specified in this Regulation are exclusively applicable to imports of the product under review originating in the PRC and produced by the named legal entities. Imports of the product under review produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual countervailing duty rates.

• (228) A company may request the application of these individual countervailing duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission ⁵⁹. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

• (229) All interested parties were informed of the essential facts and considerations on the basis of which it was intended to recommend that the existing measures be maintained. They were also granted a period to make representations subsequent to this disclosure.

• (230) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ⁶⁰ when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

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

HAS ADOPTED THIS REGULATION:

Article 1

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.

Country	Company	Countervailing duty	TARIC additional code
People’s Republic of China	Bengang Steel Plates Co., Ltd.	28,1  %	C157
	Handan Iron & Steel Group Han-Bao Co., Ltd.	7,8  %	C158
	Hesteel Co., Ltd. Tangshan Branch61	7,8  %	C159
	Hesteel Co., Ltd. Chengde Branch62	7,8  %	C160
	Zhangjiagang Hongchang Plate Co., Ltd.	4,6  %	C161
	Zhangjiagang GTA Plate Co., Ltd.	4,6  %	C162
	Shougang Jingtang United Iron and Steel Co. Ltd.	31,5  %	C164
	Beijing Shougang Co. Ltd., Qian’an Iron & Steel branch	31,5  %	C208
	Other cooperating companies listed in the Annex	17,1  %	See Annex
	All other companies	35,9  %	C999

In cases where the countervailing duty has been subtracted from the anti-dumping duty for certain exporting producers, refund requests under Article 21 of Regulation (EU) 2016/1037 shall also trigger the assessment of the dumping margin for that exporting producer prevailing during the refund investigation period. The amount to be reimbursed to the applicant for refund cannot exceed the difference between the duty collected and the combined countervailing and anti-dumping duty established in the refund investigation.

Article 2

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

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

Done at Brussels, 7 June 2023.

For the Commission

The President

Ursula VON DER LEYEN

ANNEX

Country	Name	TARIC additional code
PRC	Angang Steel Company Limited	C150
PRC	Maanshan Iron & Steel Co., Ltd	C165
PRC	Rizhao Steel Wire Co., Ltd.	C166
PRC	Rizhao Baohua New Material Co., Ltd.	C167
PRC	Wuhan Iron & Steel Co., Ltd.	C156