Commission Implementing Regulation (EU) 2023/1444 of 11 July 2023 imposing a provisional anti-dumping duty on imports of steel bulb flats originating in the People’s Republic of China and Türkiye

12.7.2023	EN	Official Journal of the European Union	L 177/63

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 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1.   Initiation

• (1) On 14 November 2022, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of steel bulb flats originating in the People’s Republic of China (‘China’ or ‘the PRC’) and Türkiye (‘the countries concerned’) on the basis of Article 5 of the basic Regulation. The Commission published a Notice of Initiation in the Official Journal of the European Union ² (‘the Notice of Initiation’).

• (2) The Commission initiated the investigation following a complaint lodged on 30 September 2022 by Laminados Losal S.A.U. (‘the complainant’). The complaint was made on behalf of the Union industry of steel bulb flats in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2.   Registration

• (3) Pursuant to Article 14(5a) of the basic Regulation, the Commission should register imports subject to an anti-dumping investigation during the period of pre-disclosure, unless it has sufficient evidence within the meaning of Article 5 that the requirements either under point (c) or (d) of Article 10(4) of the basic Regulation are not met.

• (4) The complainant did not request registration and the Commission found that the requirements under point (d) of Article 10(4) of the basic Regulation were not met. In addition to the level of imports which caused injury during the investigation period, there was no further substantial rise in imports thereafter.

• (5) For the reasons set out in section 4.3.1 below, the Commission decided to cumulate the imports from the countries concerned for the purpose of the analysis described in the recitals above. An analysis of the data extracted from the Surveillance Database and the data supplied by the cooperating exporting producers in the countries concerned, showed that the cumulative volume of imports from the countries concerned decreased by 2 % in the first four full months (i.e. December 2022 to March 2023) after the initiation of the investigation as compared to the same months during the investigation period. The average monthly imports from the countries concerned during the first four months after the initiation of the investigation decreased by 15 % as compared to the average monthly imports during the investigation period. Therefore, the Commission did not make the imports of steel bulb flats subject to registration under Article 14(5a) of the basic Regulation during the period of pre-disclosure.

1.3.   Interested parties

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

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

1.4.   Comments on initiation

• (8) Following initiation, comments were received from the Government of Türkiye, the Turkish exporting producer Özkan Demir Çelik Sanayi A.Ş (‘Özkan Demir’), the Union user Fincantieri S.p.A (‘Fincantieri’) and the unrelated importer Baglietto s.r.l. (‘Baglietto’).

• (9) The Government of Türkiye and Fincantieri both claimed, among other things, that the complaint relied too much on confidential information, especially with respect to the level of detail concerning the microeconomic indicators of the Union industry, as well as certain annexes to the complaint. Both parties claimed that the non-confidential version was therefore insufficient to allow parties to provide meaningful comments on the injury indicators and allegations set out in the complaint.

• (10) 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 significantly adverse effect upon a person supplying the information or upon a person from whom that person has acquired the information. Since the complaint relates to the information of one Union producer only, or the information of that Union producer in combination with publicly available information and statistics, the complainant provided the relevant figures in meaningful ranges for reasons of confidentiality. In the same vein, the complainant provided a non-confidential version of the annexes or a meaningful summary of the information provided. The Commission therefore considered that the non-confidential version of the complaint available in the file for inspection by interested parties contained all the essential evidence and non-confidential summaries of the confidential data which allow interested parties to properly exercise their rights of defence. Therefore, this claim was rejected.

• (11) The Government of Türkiye and Fincantieri both opposed the inclusion in the injury analysis of the data for Laminorul S.A. (‘Laminorul’), a Romanian steel bulb flats producer, which went bankrupt and ceased production during the period considered. According to the information available to the Commission, following its bankruptcy, Laminorul was acquired by another company, but has not restarted its production of steel bulb flats. According to the Government of Türkiye and Fincantieri, the data available for Laminorul should not have been included in the figures presented in the complaint, since that company went bankrupt and no longer produces steel bulb flats. Laminorul should therefore not have been considered part of the Union industry in the complaint.

• (12) The Commission considered, however, that Laminorul was still part of the Union industry during the period considered, albeit not throughout the entire period. For that reason, the complainant was correct in including Laminorul’s data in the complaint and showed an accurate reflection of the situation of the Union industry for the relevant periods. In addition, the data presented in the complaint showed that most indicators showed similar trends, with and without including Laminorul in the analysis. In any case, the Commission has indicated the effect of Laminorul’s data on the Union industry’s injury situation in its analysis for the period considered in this Regulation, where possible.

• (13) The Government of Türkiye and Özkan Demir provided comments on several individual injury indicators presented in the complaint, claiming that some of the indicators did not point to an injurious situation of the Union industry, or that that injury might have been caused by other factors than the imports from the countries concerned.

• (14) In this respect, the Commission recalled the wording of Article 5(2) of the basic Regulation, which states that the complaint shall contain the information on changes in the quantity of the allegedly dumped imports, the effect of those imports on prices of the like product on the Union market and the consequent impact of the imports on the Union industry, as demonstrated by relevant (not necessarily all) factors. The complaint contained this information, which pointed to the existence of injury and a causal link with imports from the countries concerned. Accordingly, the Commission considered that the complaint contained sufficient evidence tending to show injury and a causal link, and therefore rejected the claim.

• (15) Other specific comments on injury, causation and Union interest, which were not directly linked to the initiation, are dealt with in the relevant sections below (Sections 4, 5 and 7).

1.5.   Sampling

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

Sampling of Union producers

• (17) Given the limited number of Union producers of steel bulb flats, the Commission announced in the Notice of Initiation that it would make questionnaires available to the only two known Union producers. Of these two producers, only Laminados Losal, S.A.U. (the complainant) provided a questionnaire reply. The second Union producer, Olifer s.p.l., (‘Olifer’) accounting for [15-25] % of Union production, did not come forward during the investigation. Thus, the Commission did not have recourse to sampling but used the data of the complainant and estimated the data for Olifer and Laminorul where relevant as explained in recital 147.

Sampling of importers

• (18) 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.

• (19) Only one unrelated importer provided the requested information and agreed to be included in the sample. The Commission therefore decided that sampling was not necessary.

Sampling of exporting producers in the PRC

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

• (21) One exporting producer in the PRC, Changshu Longteng Special Steel Co., Ltd. provided the requested information and agreed to be included in the sample. Accordingly, the Commission decided that sampling was not necessary.

Sampling of exporting producers in Türkiye

• (22) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in Türkiye to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of Türkiye to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (23) One exporting producer in Türkiye, Özkan Demir, provided the requested information and agreed to be included in the sample. Accordingly, the Commission decided that sampling was not necessary.

1.6.   Questionnaire replies and verification visits

• (24) The Commission sent a questionnaire concerning the existence of significant distortions in China within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’). No reply was received. Consequently, 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.

• (25) The Commission published online ³ the questionnaires for the exporting producers, the unrelated importers and the Union producers.

• (26) The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, resulting injury and Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

Union producer

• — Laminados Losal S.A.U., Gernika, Spain

User

• — Fincantieri S.p.A, Monfalcone and Trieste, Italy

Exporting producer in Türkiye

• — Özkan Demir Çelik Sanayi A.Ş, Aliağa/İzmir, Türkiye

• (27) In view of the outbreak of COVID-19 and the confinement measures put in place the Commission carried out a remote crosscheck of the following Chinese exporting producer:

• — Changshu Longteng Special Steel Co., Ltd., the PRC

1.7.   Investigation period and period considered

• (28) The investigation of dumping and injury covered the period from 1 October 2021 to 30 September 2022 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2019 to the end of the investigation period (‘the period considered’).

2. PRODUCT UNDER INVESTIGATION, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

• (29) The product under investigation is non-alloy steel bulb flats in the range up to 204 mm width (‘steel bulb flats’). Steel bulb flats are mainly used in the shipbuilding industry for the construction of the steel framework of passengers’ cruises, ferries, military vessels, and merchant vessels. Steel bulb flats can also be used in the construction of offshore platforms and tram rails, but in the Union this application of steel bulb flats concerns only marginal quantities (‘the product under investigation’).

2.2.   Product concerned

• (30) The product concerned is the product under investigation originating in the People’s Republic of China and Türkiye, currently falling under CN code ex 7216 50 91 (TARIC code 7216509110) (‘the product concerned’).

2.3.   Like product

• (31) The investigation showed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses:

• — the product concerned when exported to the Union;

• — the product under investigation produced and sold on the domestic market of the PRC and Türkiye and

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

• (32) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

2.4.   Claims regarding product scope

• (33) No claims regarding product scope were received.

3. DUMPING

3.1.   China

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

• (34) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to China, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

• (35) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in China to provide information regarding the inputs used for producing steel bulb flats. One exporting producer, Changshu Longteng Special Steel Co, Ltd., submitted the relevant information. In addition, 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.

• (36) Moreover, 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 China. The Commission invited the GOC to submit its comment on the application of Article 18. No comments were received.

• (37) In point 5.3.2 of the Notice of Initiation, the Commission also specified that, in view of the evidence available, a possible appropriate representative third country was Türkiye 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 representative countries in accordance with the criteria set out in 2(6a)(a) first indent of the basic Regulation.

• (38) On 24 January 2023, the Commission informed by a note (‘the First Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of steel bulb flats, based on data provided by Changshu Longteng Special Steel Co., Ltd. submission, the sole exporting producer of the product concerned located in the PRC that cooperated. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified Türkiye as an appropriate representative country. The Commission received comments from exporting producer Changshu Longteng Special Steel Co., Ltd. on the First Note.

• (39) On 3 April 2023, and after having analysed the comments received and the additional information provided by Changshu Longteng Special Steel Co., Ltd., the Commission informed by a second note (‘the Second Note’) interested parties on the relevant sources it intended to use for the determination of the normal value, with Türkiye as the representative country. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on a data from a producer in the representative country, namely Kocaer Çelik Sanayi. The Commission invited interested parties to comment and received comments from Changshu Longteng Special Steel Co., Ltd.

• (40) After having analysed the comments and information received on the Second Note, the Commission provisionally concluded that Türkiye was an appropriate choice as representative country from which undistorted prices and costs would be sourced for the determination of the normal value. The underlying reasons for that choice are further described in detail in Section 3.4 below.

3.1.2.   Normal value

• (41) 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’.

• (42) 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’.

• (43) 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 exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

3.1.2.1.   Existence of significant distortions

• (44) In recent investigations concerning the steel sector in the PRC ⁴, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

• (45) 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 ⁵. In particular, the Commission concluded that in the steel sector – steel being the main raw material to produce the product under investigation, 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 ⁶, 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 ⁷. 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 ⁸. 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 ⁹. 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 ¹⁰, 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 ¹¹.

• (46) 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 complaint, as well as the Commission Staff Working Document on Significant Distortions in the Economy of the PRC for the Purposes of Trade Defence Investigations ¹² (‘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 steel bulb flats. 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.

• (47) The complaint 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 and the market, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation.

• (48) More specifically, the complaint 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 Year Plans (‘FYP’) – the GOC’s interventionism takes various forms, namely administrative, financial and regulatory.

• (49) The complaint 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 complainant 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 a free market. With the high level of government intervention in the steel industry, reflected in the 13^th FYP for Adjusting and Upgrading 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, and thus the steel bulb flats sector, are to a significant extent served by enterprises which operate under the ownership, control and policy supervision of the Chinese authorities;

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

• — Almost half of all companies in the Chinese Steel sector are SOEs and four of the ten world’s largest steel producers fall under this category, giving these SOEs a dominant role in the steel market. As a result, there is significant state intervention on the cost of raw materials in the steel sector, more specifically for the steel shipbuilding and steel bulb flats sector, creating distortions in the prices of steel. The 13^th FYP outlined steel shipbuilding as a strategical sector to be supported by the GOC. Considering that a majority of steel bulb flats products are used and manufactured for the steel shipbuilding sector, the steel bulb flats sector can be considered strategic for the GOC and thus receive support from the state. The complaint further points out that the two most important Shipyards in China, namely China State Shipbuilding Corporation and China Shipbuilding Industry Corporation, are SOEs. Both of them are under the supervision of the State-owned Asset Supervision and Administration Commission (‘SASAC’) and are thus affected by public measures and policies favouring domestic producers;

• — 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. Indeed, their lending policy needs to be aligned with the GOC industrial policy objectives rather than primarily assessing the economic environment and merits of a given project.

• — As stated in previous investigations of the Commission on steel, there is substantial government intervention in the Chinese market, resulting in distortions of wages in the steel sector, as well as shortcomings in Chinese bankruptcy and property law.

• (50) 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 complainant, 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.

• (51) Specifically in the sector of the product under investigation, which is a subsector of 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 investigation, the exact ratio of the private and State-owned producers could not be determined.

• (52) 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. Moreover, some key steel bulb flats producing companies such as Hebei Jitai Special Steel Group Co., Ltd., Suqian Nangang Jinxin Rolling Co., Ltd and Hebei Jingye Group Co. Ltd., are subject to government interference. The company Hebei Jitai Special Steel Group Co., Ltd., a fully owned subsidiary of the private company Tangshan Baigong Industry Development co. ¹³, declares among its objectives to ‘contribute to the development of the company, the progress of the times, and the motherland.’ ¹⁴. Furthermore, Suqian Nangang Jinxin Rolling Co., Ltd. is held and controlled by Nanjing Steel, an SOE under Nanjing SASAC. ¹⁵ In the case of Hebei Jingye Group Co. Ltd., various CCP building activities have been organized under the leadership of the Group’s Party Committee deputy secretary. ¹⁶

• (53) In addition, given that CCP interventions into operational decision making have become the norm also in private companies ¹⁷, with CCP claiming leadership over virtually every aspect of the country’s economy, the influence of the State by means of CCP structures within companies effectively results in economic operators being under control and policy supervision of the government, given how far the State and Party structures have grown together in the PRC.

• (54) This is apparent also at the level of the China Iron and Steel Association (‘CISA’). According to Article 3 of its Articles of Association, CISA ‘adheres to the overall leadership of the Communist Party of China’ and ‘accepts the business guidance, supervision and management by the entities in charge of registration and management, by entities in charge of party building, as well as by the relevant administrative departments in charge of industry management’ ¹⁸.

• (55) 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 ¹⁹, 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’ ²⁰, or 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 %.’ ²¹ Concerning more specifically the product under investigation, Shandong and Jiangsu provinces have issued their respective 14^th FYP on developing shipbuilding and marine engineering equipment, explicitly promoting the shipbuilding sector and the related steel production, such as steel bulb flats. ²²

• (56) Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the steel sector can be seen also in other provinces, 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.’ ²³. The influence of the State can also be found on the municipal level, such as in the Hebei Tangshan Municipality 2022 Iron and steel 1+3 action plan, in which different municipal entities are tasked to ‘foster alliances and reorganization of enterprises with similar products in the region’, such as the two large steel groups Shougang (Jingtang, Qiangang) and Tangsteel New District, ‘seek and guide financial institutions to provide iron and steel enterprises with low-interest loans to allow them to switch to new industries, and at the same time […] provide subsidies in the form of interest rate discounts’ as well as ‘support optimization of the products’ structure’ by granting ‘new national-level champion manufacturing enterprises and champion products […] with RMB 1 million and RMB 500 000 respectively, and new provincial-level champion manufacturing enterprises and champion products [with] RMB 300 000 AND RMB 100 000 respectively’ ²⁴.

• (57) Similarly, the Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14^th FYP foresees the ‘construction of specific steel production bases’ that is to ‘build 6 large specific steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhoukou, etc., and ensure expansion, intensification and specialization of the industry. Among them, by 2025, the pig iron production capacity in Anyang will be controlled below 14 million tons, and the production capacity of crude steel will be controlled below 15 million tons.’ ²⁵

• (58) The investigation has further confirmed that the GOC is interfering with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation, establishing the existence of personal connections between producers of steel bulb flats and the CCP. For example, the Chairman of the Board of Directors of the cooperating exporting producer Changshu Longteng Special Steel Co., Ltd. holds in parallel the position of Secretary of the enterprise’s Party Committee. ²⁶ Moreover, the company signed a strategic agreement with SOE Jiangsu Huaneng, a wholly-owned subsidiary of Huaneng, an SOE under central SASAC ²⁷ and signed an agreement of intention to deepen cooperation with the Jiangsu Branch of the Export-Import Bank of China, pointing towards financial support by the State. ²⁸ The interference of the Municipal CCP committee into the work of Longteng is also apparent from the following article published on Changshu Municipality’s website: ‘the Party Committee of the Transportation Bureau will further deepen the pairing work. Thanks to the leadership of the Party building, it will ensure a closer and deeper cooperation with the paired enterprises, so as to better transform the political advantages of Party building in terms of mutual support and mutual promotion into development advantages and practical actions to serve the masses. Together, we will achieve new results, new progress, and new victories in the New Era’s Long March.’ ²⁹ Similarly, the Chairman of the Board of both Suqian Nangang Jinxin Rolling Co., Ltd. and its mother company Nanjing Steel does also hold at the same time the position of Secretary of the Party Committee. ³⁰

• (59) 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 investigation. The investigation identified policy documents showing that the industry benefits from governmental guidance and intervention into the product under investigation as part of the steel sector.

• (60) The steel industry keeps being regarded as a key industry by the GOC ³¹. 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 FYP, the GOC earmarked the steel industry for transformation and upgrade, as well as optimization and structural adjustment ³². Similarly, the 14^th FYP 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. ³³

• (61) The important raw material used for the production of the product under investigation 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.’ ³⁴ 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.’ ³⁵ 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 steel bulb flats. Such measures impede market forces from operating freely.

• (62) The present investigation has not revealed any evidence that 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 steel sector, referred to above in recital 45, would not affect the manufacturers of the product under investigation.

• (63) The steel sector, as referred to above in recital 45, is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation. No evidence was submitted to the effect that the steel sector, including the producers of steel bulb flats, would not be subject to the Chinese labour law system. Those distortions affect the sector both directly (when producing steel bulb flats or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in the PRC) ³⁶.

• (64) Moreover, no evidence was submitted in the present investigation demonstrating that the steel sector, as referred to above in recital 45, 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. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (65) Finally, the Commission recalls that in order to produce steel bulb flats, a number of inputs is needed. When the producers of steel bulb flats 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.

• (66) As a consequence, not only the domestic sales prices of steel bulb flats 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.

• (67) No evidence or argument to the contrary has been adduced by the GOC in the present investigation. However, in its submission of 6 February 2023, Changshu Longteng Special Steel Co., Ltd. argued that allegations on significant distortions should not become a pre-determined conclusion and that the Commission should first verify the alleged distortions and decide whether they are significant before it can search for normal value data from alternative sources. In the company’s view, however, the Commission has prematurely started seeking for alternative normal value sources at an early stage of the investigation.

• (68) This argument cannot be accepted. As indicated in the Notice of Initiation, the Commission considered at the initiation stage that there was sufficient evidence pursuant to Article 5(9) of the basic Regulation tending to show that, due to significant distortions affecting prices and costs, the use of domestic prices and costs in the PRC would be inappropriate, thus warranting the initiation of an investigation on the basis of Article 2(6a) of the basic Regulation. The Commission recalled in this context that according to Article 2(6a)(e) of the basic Regulation, parties to the investigation shall be informed promptly after initiation about the relevant sources that the Commission intends to use for the purpose of determining normal value. Longteng’s argument that the Commission ought to seek for alternative sources of normal value only following a determination on the existence of significant distortions seems therefore be based on a misreading of the basic Regulation. In any event, far from reaching any predetermined conclusions concerning significant distortions as claimed by Longteng, in the course of the present investigation, the Commission has been collecting further information to complement the available sources in order to verify the allegations made at initiation stage and, ultimately, to determine whether significant distortions in the sense of Article 2(6a) of the basic Regulation are present in the steel bulb flats sector. While such determinations will be made only at definitive stage of the investigation, the provisional results of the Commission’s investigation are laid out in recitals 44 to 67 above and interested parties have the opportunity to further comment on them.

3.1.2.2.   Representative country

General remarks

• (69) 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 ³⁷;

• — Production of the product under investigation in that country;

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

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

• (70) As explained in recitals 38 and 39, the Commission issued two notes for the file on the sources for the determination of the normal value: the First Note on production factors of 24 January 2023 and the Second Note on the production factors of 3 April 2023. These notes described the facts and evidence underlying the relevant criteria, and also addressed the comments received by the parties on these elements and on the relevant sources. In the second note on production factors, the Commission informed interested parties of its intention to consider Türkiye 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.

A level of economic development similar to China

• (71) In the First Note on production factors, the Commission identified Türkiye and Russia as countries with a similar level of economic development as China according to the World Bank, i.e. they are all classified by the World Bank as ‘upper-middle income’ countries on a gross national income basis where production of the product under investigation was known to take place. No comments were received concerning the countries identified in that note.

• (72) In the Second Note, following comments received from the cooperating exporting producer Changshu Longteng Special Steel Co, Ltd. on the First Note, the Commission indicated that Malaysia was considered for establishing the following factors of production: nitrogen, oxygen and limestone. No comments were received concerning the countries identified in that note.

Availability of relevant public data in the representative country

• (73) In the First Note, the Commission indicated that for the countries identified as countries where the product under investigation is being produced, namely Russia and Türkiye, the availability of public data needed to be further verified in particular with regard to the public financial data from producers of the product under investigation.

• (74) With regard to Russia, the financial statements of the only company that was identified in the First Note as a producer, namely ‘JSC Omutninsk Metallurgical Plant’, were not readily available. The Commission therefore concluded that it could not use the data of this company in the proceeding.

• (75) Moreover, Russian import statistics data was available for up until January 2022, and thus covering only one third of the investigation period.

• (76) As a result, the Commission concluded that Russia could not be considered as an appropriate representative country for this investigation.

• (77) Concerning Türkiye, the Commission identified readily available financial statements for only one producer of the product under investigation which was, however, lossmaking in 2021. Although the financial statements of the cooperating exporting producer in Türkiye, Özkan Demir, were readily available within the meaning of Article 2(6a) of the basic Regulation, the company was lossmaking in 2021 and thus could not be used to construct the normal value. Therefore, in addition to that company the Commission identified readily available financial statements for producers of a product in the same general category and/or sector in potential representative countries which showed a reasonable level of profitability for a period partially overlapping with the IP. Those producers were either identified in the complaint or in the list of producers that produce products falling under CN code 7216 50 91‘Bulb flat’, which includes both the product under investigation ‘non-alloy steel bulb flat in the range up to 204 mm width’ as defined in the Notice of Initiation and all other types of steel bulb flats products. The Commission also cross-checked the list of producers with those provided by the Turkish authorities at pre-initiation stage.

• (78) In light of the above considerations, the Commission considered Türkiye as an appropriate choice for a representative country.

• (79) In their comments on the First Note, Changshu Longteng Special Steel Co., Ltd. pointed out that some of the Turkish producers listed were not satisfactory as for four out of five producers, only consolidated financial statements were available and thus could not reflect the actual SG&A and profit margins of a steel bulb flats producer. Moreover, the SG&A and profit, calculated on the basis of available data of these five producers, were unreasonably high, according to Changshu Longteng Special Steel Co., Ltd. Finally, Changshu Longteng Special Steel Co., Ltd. claimed that the Commission should disregard Türkiye for establishing the benchmark of some raw materials (i.e. limestone and oxygen).

• (80) In light of the above considerations, the Commission re-examined the SG&A and profits reported by four out of the five identified steel producers in Türkiye and considered it unreasonably high. Therefore, the Commission disregarded these companies and decided to use the SG&A and profit margins reported by only one of the Turkish producers, that is Kocaer Çelik Sanayi for 2022 financial data (i.e. for the period partially overlapping with the IP). Following the Second Note, Changshu Longteng Special Steel Co., Ltd. argued that Kocaer Çelik Sanayi, incurred extremely high financial expenses for which details could not be found. Moreover, Changshu Longteng Special Steel Co., Ltd. claimed that they did not face such high financial expenses.

• (81) The Commission selected a company with readily available financial statements showing a reasonable amount of SG&A and profits margins for steel producing industry, and applied the SG&A and profit of Kocaer Çelik Sanayi in Türkiye. The SG&A expressed as a percentage of the costs of goods sold (‘COGS’) and applied to the undistorted costs of production, amounted to 10,98 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 8,8 %. The Commission used consolidated data, as this was the only data that was publicly available. Moreover, the Commission did not consider these percentages unreasonably high, but rather in line with the cost and profits incurred in this type of industry. Moreover, these percentages are in line with the ones used in previous investigations concerning the steel industry, like for example with regard to steel wind towers ³⁸ and organic coated steel ³⁹. The Commission did not have at its disposal any information pointing to the contrary.

• (82) Therefore, in the absence of any other comments or the submission of any other readily available data, the Commission provisionally concluded that the sources it proposed to use for SG&A and profit are undistorted and reasonable within the meaning of Article 2(6a)(a) last paragraph of the basic Regulation.

Level of social and environmental protection

• (83) Having established that Türkiye was the only available 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.

Conclusion

• (84) In view of the above analysis, Türkiye 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.

Sources used to establish undistorted costs

• (85) In the First Note, the Commission listed the factors of production such as raw materials, energy and labour used in the production of the product under investigation by the exporting producer.

• (86) In order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, the Commission used Global Trade Atlas ⁴⁰ (‘GTA’) and Metal Bulletin ⁴¹ 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 Turkish Statistical Institute for establishing undistorted costs of labour ⁴² and energy ⁴³ and Directorate-General of Izmir Metropolitan Municipality’s statistics for undistorted cost of water ⁴⁴.

• (87) The Commission invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production mentioned in that note.

• (88) In its comments on the First Note, Changshu Longteng Special Steel Co., Ltd claimed that the import prices of ferrochromium in Türkiye varied based on the ratio of weight of carbon and chromium. The Commission verified the actual ratio of weight of carbon and chromium used by the Changshu Longteng Special Steel Co., Ltd. In this regard, to establish the corresponding cost of ferrochromium the Commission decided to use the Metal Bulletin’s independent industry benchmarks for the global metal and mining industry (Fastmarkets’ prices) which reflects different ratios of weight of carbon and chromium.

• (89) Following the First Note, Changshu Longteng Special Steel Co., Ltd. also claimed that the average Turkish prices of certain raw materials (i.e. oxygen and limestone) could not be used due to low volume of imports. In addition, on the basis of the questionnaire reply of Changshu Longteng Special Steel Co., Ltd, the Commission identified an additional factor of production, i.e. nitrogen, which was also imported in non-representative quantities into Türkiye during the investigation period.

• (90) Consequently, the Commission examined the volume of imports into Thailand, Malaysia, Brazil and Mexico since these countries are with similar level of economic development as China and have been previously considered as representative countries in several recent previous investigations in the steel sector such as steel road wheels ⁴⁵, stainless steel hot-rolled flat products ⁴⁶, steel wind towers ⁴⁷, organic coated steel ⁴⁸, tube or pipe fittings, of iron or steel ⁴⁹. The Commission established that, following the exclusion of imports from the PRC and countries which are not members of the WTO, only Malaysia had imports in sufficiently representative quantities of all the three factors of production concerned during the investigation period. On this basis, the Commission informed in the Second Note that when constructing the normal value the Commission intends to use costs of these inputs based on imports to Malaysia.

• (91) Subsequently, in the Second Note, the Commission updated the list of factors of production based on the comments of the parties and information submitted by the cooperating exporting producer in the questionnaire reply.

• (92) Following the Second Note, Changshu Longteng Special Steel Co., Ltd. claimed that the Malaysian import volume of nitrogen and oxygen and the Turkish import volume of argon were not representative because the import volumes were significantly lower than their actual consumption of those raw materials. Furthermore, Changshu Longteng Special Steel Co., Ltd. stated that for each of those raw materials there are some supplying countries with unreasonably high unit prices and high transport costs.

• (93) The Commission rejected this claim since the representativity of import volumes was assessed based on absolute quantity of import volumes. The fact that these volumes were not at the same levels as the consumption of those raw materials of the exporting producer did not change the conclusion that the absolute volumes of these imports were considered representative.

• (94) In the Second Note, the Commission also informed the interested parties that due to the large number of factors of production of the cooperating exporting producer that provided complete information and the negligible weight of some of the raw materials in the total cost of production, these negligible items were grouped under ‘consumables’. Further, the Commission informed that it would calculate the percentage of the consumables on the total cost of raw materials and apply this percentage to the recalculated cost of raw materials when using the established undistorted benchmarks in the appropriate representative country.

Undistorted costs and benchmarks

Factors of production

• (95) Considering all the information submitted by the interested parties and collected during the verification visits, 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 steel bulb flats

Factor of Production	HS code	Source of data that the Commission intends to use	Undistorted value
Raw materials	Raw materials	Raw materials	Raw materials
Limestone	252100	GTA for Malaysia	0,243 CNY/kg
Iron ore	260111	GTA for Türkiye	0,83 CNY/kg
Sintered iron ore	260112	GTA for Türkiye	1,28 CNY/kg
Coal	270111	GTA for Türkiye	1,53 CNY/kg
Coke/Coke powder	270400	GTA for Türkiye	3,35 CNY/kg
Carbon powder	280300	GTA for Türkiye	10,08 CNY/kg
Pure Tourmaline	284910	GTA for Türkiye	8,67 CNY/kg
Ferro-manganese	720211	GTA for Türkiye	10,68 CNY/kg
Ferro-silicon	720221	GTA for Türkiye	15,86 CNY/kg
Silico-manganese	720230	GTA for Türkiye	11,76 CNY/kg
Ferro-chromium	720241	MB-FEC-0005	8,97 CNY/kg
Ferro-molybdenum	720270	GTA for Türkiye	160,64 CNY/kg
Ferro-titanium	720291	GTA for Türkiye	43,32 CNY/kg
Ferro-vanadium	720292	GTA for Türkiye	190,12 CNY/kg
Ferro-niobium	720293	GTA for Türkiye	176,27 CNY/kg
Ferro-aluminium	720299	GTA for Türkiye	19,24 CNY/kg
Steel scraps	720410	GTA for Türkiye	2,15 CNY/kg
Aluminium	760110	GTA for Türkiye	19,67 CNY/kg
Argon	280421	GTA for Türkiye	7,30 CNY/m3
Nitrogen	280430	GTA for Malaysia	5,85 CNY/m3
Oxygen	280440	GTA for Malaysia	2,46 CNY/m3
Water costs		Price of water as charged by Izmir Metropolitan Municipality for industrial users	8,25 CNY/m3
Labour	Labour	Labour	Labour
Labour costs		Turkish Statistical Institute (based on hourly average labour cost in the manufacturing sector)	37,03 CNY/hour
Energy	Energy	Energy	Energy
Electricity		Turkish Statistical Institute – price of electricity for industrial users	0,60 CNY/kWh
Natural gas		Turkish Statistical Institute – price of gas for industrial users	2,75 CNY/m3

3.1.2.3.   Raw materials

• (96) 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 Türkiye and for nitrogen, oxygen and limestone to Malaysia as reported in GTA and Metal Bulletin’s independent industry benchmark for Ferrochromium to which import duties and transport costs 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 1 of Regulation (EU) 2015/755 of the European Parliament and the Council ⁵⁰. The Commission decided to exclude imports from the PRC into the representative country as it concluded in Section 3.3.1 above 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 the imports into the representative country from China and non-market economy countries, the Commission found that imports of the main raw materials from other third countries remained representative.

• (97) The Commission deviated from the above-described methodology for a limited number of raw materials.

• (98) As indicated in recital 88, the Commission decided to use the Metal Bulletin (Fastmarkets’ prices) for establishing the benchmark of ferrochromium.

• (99) As indicated in recital 90, for limestone, nitrogen and oxygen the Commission decided to use cost of these inputs based on imports to Malaysia, excluding imports from the PRC and countries which are not members of the WTO.

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

• (101) For a number of factors of production, the actual costs incurred by the cooperating exporting producer represented a negligible share (cumulatively around 3,3 %) of total raw material costs in the review investigation period. As the value used for these had no appreciable impact on the dumping margin calculations, regardless of the source used, the Commission decided to include those costs into consumables as explained in the recital 94.

Labour

• (102) The Commission used the statistics published by the Turkish Statistical Institute ⁵¹. This institute publishes detailed information on labour costs in different economic sectors in Türkiye. The Commission established the benchmark based on hourly average labour costs for 2020 for the economic activity ‘Manufacture of basic metals’ NACE code 24 according to NACE Rev.2 classification. The values were further adjusted for inflation using the domestic consumer price index ⁵² to reflect the costs for the investigation period.

Energy

• (103) The Commission used the average industrial electricity and gas prices for industrial users in Türkiye published by the Turkish Statistical Institute ⁵³ for the period from July 2021 to June 2022, net of VAT.

Water

• (104) The Commission used the water tariff charged by Directorate-General of Izmir Metropolitan Municipality that is responsible for water supply, sewage collection and treatment in Izmir Metropolitan Municipality where representative company of the product under investigation is located. The information enables to identify tariffs applicable for the industry and benchmark would be average monthly tariff for the investigation period, net of VAT ⁵⁴.

• (105) Regarding water, Changshu Longteng Special Steel Co., Ltd. considered the benchmark used, namely water costs in Izmir not to be representative because Changshu Longteng Special Steel Co., Ltd. is located in a rural area with easy access to water and thus the water cost of Changshu Longteng Special Steel Co. cannot be compared to a tourist city in Türkiye.

• (106) The Commission used as benchmark water tariff for industrial use in the region where the producer of the product under investigation, Kocaer Çelik Sanayi, is located in Türkiye. Furthermore, the selected region has a well-developed industrial base. Consequently, the Commission rejected this claim.

Manufacturing overhead costs, SG&A and profits

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

• (108) The manufacturing overheads incurred by the cooperating exporting producer were expressed as a share of the costs of manufacturing actually incurred by the exporting producer. This percentage was applied to the undistorted costs of manufacturing.

• (109) For establishing an undistorted and reasonable amount for SG&A and profit the Commission relied on the financial data of Kocaer Çelik Sanayi in 2022, as extracted from the Orbis database.

3.1.3.   Calculation

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

• (111) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of the cooperating exporting producer. These consumption rates provided by the cooperating exporting producer were verified during the remote cross-check. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country or by other undistorted costs per unit identified in the table above.

• (112) Second, to arrive at a total undistorted manufacturing cost was established, the Commission applied the manufacturing overheads. Manufacturing overheads incurred by the cooperating exporting producers were increased by the costs of consumables referred to in recital 101 and subsequently expressed as a share of the costs of manufacturing actually incurred by each of the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

• (113) Finally, the Commission added SG&A and profit which were expressed as a percentage of the cost of goods sold and applied to the undistorted total cost of manufacturing (i.e. SG&A amounted to 10,98 % and profit amounted to 8,8 %).

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

3.1.4.   Export price

• (115) The cooperating exporting producer exported to the Union directly to independent customers.

• (116) The export price was therefore the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

3.1.5.   Comparison

• (117) The Commission compared the normal value and the export price of the cooperating exporting producer on an ex-works basis per product type.

• (118) Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport, insurance, handling, loading costs, customs duty, credit costs and bank charges.

3.1.6.   Dumping margin

• (119) For the exporting producer, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

• (120) The level of cooperation in this case was high, because the exports of the cooperating exporting producer constituted all the imports during the IP. Changshu Longteng Special Steel Co. claimed that there was another exporting producer in the PRC of the product concerned. However, no other company came forward, and the Commission did not identify additional exports in the import statistics. On this basis, the Commission considered it appropriate to establish the dumping margin for non-cooperating exporting producers at the same level as that of the cooperating company.

• (121) On this basis, the provisional weighted average dumping margin expressed as a percentage of the CIF Union frontier price, duty unpaid, is as follows:

Company	Provisional dumping margin
Changshu Longteng Special Steel Co., Ltd.	14,7  %
All other companies	14,7  %

3.2.   Türkiye

3.2.1.   Normal value

• (122) The Commission first examined whether the total volume of domestic sales for the exporting producer Özkan Demir was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market per exporting producer represented at least 5 % of its total export sales volume of the product concerned to the Union during the investigation period. On this basis, the total sales by Özkan Demir of the like product on the domestic market were representative.