Commission Implementing Regulation (EU) 2023/1450 of 13 July 2023 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406,4 mm, originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

14.7.2023	EN	Official Journal of the European Union	L 179/9

THE EUROPEAN COMMISSION,

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

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

Whereas:

1. PROCEDURE

1.1.   Previous investigations and measures in force

• (1) By Commission Implementing Regulation (EU) 2017/804 ², the European Commission imposed anti-dumping duties on imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406,4 mm, originating in the People’s Republic of China (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

• (2) The anti-dumping duties currently in force are at rates ranging between 29,2 % and 41,4 % on imports from the sampled exporting producers, 45,6 % on the non-sampled cooperating companies and a duty rate of 54,9 % on all other companies from the People’s Republic of China (‘PRC’ or ‘China’).

1.2.   Request for an expiry review

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

• (4) The request for review was submitted on 10 February 2022 by the European Steel Tube Association (‘the applicant’ or ‘ESTA’) on behalf of the Union industry of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406,4 mm in the sense of Article 11(2) of the basic Regulation. The request for review was based on the grounds that the expiry of the measures would be likely to result in continuation or recurrence of dumping and continuation or recurrence of injury to the Union industry.

1.3.   Initiation of an expiry review

• (5) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 12 May 2022 the Commission initiated an expiry review with regard to imports into the Union of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406,4 mm, originating in the People’s Republic of China (‘the country concerned’) on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ³ (‘the Notice of Initiation’).

1.4.   Comments on initiation

• (6) Following the publication of the Notice of Initiation, the Chinese cooperating exporting producers questioned whether the fact that none of the sampled Union producers in the original investigation participated in the request for this review implied a full recovery from the dumped and injurious imports for the companies in question.

• (7) The Commission first observed that the exporting producers did not put into question the fact that the request met the conditions contained in Article 5(4) of the basic Regulation. Indeed, it was launched by the European Steel Tube Association representing more than 25 % of the total Union production and was supported by Union producers representing more than 50 % of the total EU production. Second, the Union producer Huta Batory, was sampled in both investigations, the original one and the expiry review. Third, Valcovni Trub Chomutov AS, the second sampled producer in the original investigation, supported the expiry review request but was not sampled by the Commission. Finally, the other two companies that had been sampled in the original investigation, Arcelor Mittal Tubular Products Roman and Vallourec Deutschland GmbH, have exited or are in the process of exiting the Union market. Consequently, the claim was rejected.

• (8) Moreover, the exporting producers argued that an expiry review shall be initiated when the request contains sufficient evidence that the expiry of the measures would be likely to result in a continuation or recurrence of dumping and injury and that a positive determination shall be supported by factual evidence. To support their argument they stressed that the Chinese exporting producers will never know what the normal value is because of the different methods used by resorting to prices in a representative country.

• (9) The Commission noted that it examined the accuracy and adequacy of the evidence provided and determined that there was sufficient evidence to justify the initiation of the present investigation, in accordance with Article 11(2) of the basic Regulation. In any case, the exporting producers have not provided an example of insufficient evidence, thus, this claim was not supported by any proper reasoning. Regarding the normal value, the exporting producers had ample opportunity to verify the method(s) used and the normal value calculated in the request. Consequently, their claim was rejected.

• (10) Furthermore, exporting producers stated that the Union producers’ business operations of the product concerned are much more dependent on the conditions of overseas markets than on the conditions in the Union and that the deterioration of the applicants’ export performance since 2019 cannot be ascribed to imports originating in China. They also claimed that, besides the poor export performance, part of the negative development trends in the Union was also attributed to the outbreak of the COVID-19 pandemic, particularly in 2020. In addition, they argued that the cost of production per tonne that was reported in the request, that is between € 1 245 and € 1 291, was considerably lower than what was reported in the initial investigation.

• (11) The Commission noted that at the stage of the request, it is sufficient, on the basis of the information reasonably available to the applicant, to provide evidence showing that there is likelihood of either continuation or recurrence of injury should the measures be allowed to lapse. In this respect, even if the claims by the exporting producers were correct that the economic situation of the Union industry deteriorated due to factors other than the imports from China, the arguments presented did not put into question the fact that the imports from China remained significant in absolute terms and in market share. Furthermore, the evidence provided in the request indicated that injury is likely to recur should the measures be allowed to lapse. Consequently, the claim was rejected.

• (12) The exporting producers also claimed that Tenaris’ economic performance, before and after the impact of the pandemic, was in a strong and normal condition. In the case of Tubos Reunidos SA, sales value remained at the same level for 3 consecutive years, starting in 2018 and then from 2020 onwards sales values have picked-up. Only export sales to third countries have declined, except for the US market. To support their arguments about the situation of the EU producers, they provided evidence of the two companies’ ambitious planning to either invest and expand or upgrade their production facilities in the Union.

• (13) The Commission noted that injury indicators are not analysed at the level of individual producers, but at the level of the entire Union industry. As indicated in recital 11 above, the request contained sufficient evidence with regard to the entire Union industry, about the continuation or recurrence of injury should the measures be allowed to lapse. Consequently, the argument was rejected.

• (14) The exporting producers also argued that the Union market faces rapid increases in imports from Thailand, that have a great influence on the effect of the measures implemented and the market position of the applicants. In addition, the safeguard measures also cover the product concerned and will remain in place until 30 June 2024.

• (15) The Commission noted that, concerning the imports from Thailand, the parties failed to show how their argument would put into question the evidence contained in the request regarding continuation/recurrence of injury. Regarding the safeguard measures, anti-dumping measures address a different situation than safeguard measures. In addition, the steel safeguard measures do not prevent the imposition of anti-dumping measures within the free-of-safeguard duty quotas. The claim was therefore rejected.

1.5.   Review investigation period and period considered

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

1.6.   Interested parties

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

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

(a) Sampling

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

(b) Sampling of Union producers

• (20) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the largest representative volumes of production and sales of the like product in the Union that can reasonably be investigated within the time available, in accordance with Article 17 of the basic Regulation; and on the basis of the geographical spread of the sample. This sample consisted of three Union producers. The sampled Union producers accounted for almost 76 % and 67 % of the total production and sales volumes, respectively, of the known Union producers of the like product. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample but no comments were received. Consequently, the sample was confirmed. The sample is representative of the Union industry.

(c) Sampling of importers

• (21) 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.

• (22) Only one unrelated importer provided the requested information and agreed to be included in the sample. In view of the minimal number, the Commission decided that sampling was not necessary.

(d) Sampling of exporting producers in the PRC

• (23) 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.

• (24) Two exporting producers/group of exporting producers in the PRC provided the requested information and agreed to be included in the sample. In view of the low number, the Commission decided that sampling was not necessary, and to investigate all the exporting producers that came forward.

(e) Questionnaires and verification visits

• (25) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a) (b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

• (26) The Commission also sent questionnaires to the sampled Union producers, unrelated importers, users, Union producers’ association and exporting producers. The same questionnaires had also been made available online ⁴.

• (27) The Commission received questionnaire replies from the three sampled Union producers, one unrelated importer, the Union producers’ association and the two exporting producers/group of exporting producers.

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

Union producers

• — Dalmine S.p.A. in Bergamo, Italy.

• — Tubos Reunidos Group S.L.U. in Trápaga, Vizcaya, Spain

• — Alchemia S.A. in Chorzow, Poland

Unions’ association

• (29) The Commission also held a verification visit with the following association:

• — European Steel Tube Association, in Paris, France.

Exporting producers in the PRC

• (30) Due to the outbreak of the COVID-19 pandemic and the consequent measures taken to deal with the outbreak (‘the COVID-19 Notice’) ⁵, the Commission was unable to carry out verification visits at the premises of the exporting producers. Instead, the Commission cross-checked remotely all the information deemed necessary for its determinations in line with the COVID-19 Notice. The Commission held videoconferences with the following exporting producers/group of exporting producers:

• — CITIC Pacific Group:

• — Daye Special Steel Co., Ltd;

• — Zhejiang Pacific Seamless Steel Tube Co., Ltd;

• — Yangzhou Chengde Steel Pipe Co., Ltd.

1.7.   Comments following final disclosure

• (31) In their comments following final disclosure the cooperating exporting producers, Daye Special Steel Co. Ltd., Zhejiang Pacific Seamless Steel Tube Co. and Yangzhou Chengde Steel Pipe, Co. Ltd, questioned the alleged absence of the Union producers, which were sampled in the original investigation, from this expiry review investigation and the reasons for them not being included in the sample this time. In addition, they noted that Huta Batory was not listed as one of the sampled Union producers in this expiry review. Furthermore, they indicated that they could not assess if the determination of recurrence of injury was linked to changes in the sample between the two investigations.

• (32) The Commission noted that the argument brought.by the cooperating exporting producers has been addressed in recital 7. In particular, the Union producer Huta Batory, was sampled in both investigations, the original one and the expiry review investigation. This company is now known as Alchemia S.A..

• (33) As far as the other companies are concerned, as explained in recital 20, the Union producers were sampled on the basis of the largest representative volumes of production and sales of the like product in the Union, that can reasonably be investigated within the time available. In the absence of comments on the sample, the sample was confirmed and found to be representative of the Union industry. Furthermore, even though the sample changed between the original investigation and this expiry review, the exporting producers did not submit any evidence that the sample was not representative. In addition, when assessing the situation of the Union industry and the recurrence of injury, the Commission also bases its analysis on macroeconomic indicators relating to all Union producers including those that were sampled in the original investigation. On this basis, this claim was rejected.

2. SUBSEQUENT PROCEDURE

• (34) On 21 April 2023, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

• (35) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. The parties who so requested were granted a hearing.

3. PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT

3.1.   Product under review

• (36) The product under review is the same as in the original investigation, namely certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross section, of an external diameter exceeding 406,4 mm, currently falling under CN codes 7304 19 90, ex 7304 29 90, 7304 39 88 and 7304 59 89 (TARIC code 7304299090) (‘the product under review’).

• (37) Certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross section, of an external diameter exceeding 406,4 mm are used in a wide range of applications, for example transportation of oil, gas, liquids and fluids, in the construction business for piling, for mechanical uses, boiler tubes and oil and country tubular goods (‘OCTG’) for casing in the oil industry.

3.2.   Product concerned

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

3.3.   Like product

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

• — the product concerned;

• — the product under review produced and sold on the domestic market of the PRC and;

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

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

4. DUMPING

4.1.   Evolution of the imports after the imposition of the measures

• (41) In the original investigation period ⁶, the Chinese exporting producers exported to the Union more than 42 thousand tonnes of the product concerned, representing a market share of around 26 % of the Union market at the time.

• (42) In the current investigation, for the period considered and the review investigation period, the statistical data on imports of the product concerned reported in Comext and the 14(6) Database showed a considerably lower volume of imports than the volume of exports declared by the cooperating exporting producers. Therefore, the Commission considered that, in this particular case, the statistical information was not reliable and could not be used to determine the volume of imports from the PRC and the market share of the Chinese exporting producers. It thus based its findings related to the volume of imports into the Union of the product concerned and the market share of the Chinese exporting producers on the verified data of the cooperating exporting producers and the information in the review request.

• (43) During the review investigation period, the cooperating exporting producers exported to the Union around 2,9 thousand tonnes of the product concerned, which represented a market share of between [2,5-3,5 %] of the Union market (see Table 3).

• (44) The cooperating exporting producers’ production during the review investigation period accounted only for around 12 % of the total estimated production of the product under review in the PRC ⁷. Therefore, the Commission considered it likely that during the review investigation period, the total import volume into the EU of all the Chinese exporting producers (not sampled and verified within the investigation) exceeded the volume of 2,9 thousand tonnes declared by the cooperating Chinese exporting producers, and the market share of the Chinese exporting producers exceeded in all likelihood the [2,5-3,5 %] indicated in Table 3 below.

• (45) On this basis the Commission concluded that during the review investigation period the Chinese exporting producers continued to export, although in lower quantities, the product under review to the Union.

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

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

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

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

• (49) On 14 July 2022, the Commission informed by a Note to the file (‘Note on factors of production and the representative country’ or the ‘Note’) the 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 the product under review. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified the possible representative country, namely Mexico. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on available information for the company Tubos de Acero de México S.A. (‘Tamsa’), a producer in Mexico.

4.3.   Normal value

• (50) 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’.

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

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

4.3.1.   Existence of significant distortions

• (53) In recent investigations concerning the steel sector in the PRC ⁸, the Commission found that significant distortions in the sense of Article 2(6a) (b) of the basic Regulation were present.

• (54) 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 ⁹. In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a) (b), first indent of the basic Regulation ¹⁰, 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 ¹¹. 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 ¹². 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 ¹³. 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 ¹⁴, 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 ¹⁵.

• (55) Like in previous investigations concerning the steel sector in the PRC, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, as well as in the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the Purposes of Trade Defence Investigations ¹⁶ (‘Report’), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC as also found by its previous investigations in this respect.

• (56) The request alleged that the Chinese economy as a whole is widely influenced and affected by various all-encompassing interventions by the GOC or other public authorities on various levels of government, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation. To support its position, the request referred to the Commission’s recent investigations of the Chinese steel sector. ¹⁷

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

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

• — The overall setup of the Chinese economy not only allows for substantial government interventions into the economy, but such interventions are expressly mandated. The notion of supremacy of public ownership over the private one permeates the entire legal system and is emphasized as a general principle in all central pieces of legislation. The Chinese property law is a prime example: it refers to the primary stage of socialism and entrusts the State with upholding the basic economic system under which the public ownership plays a dominant role. Other forms of ownership are tolerated, with the law permitting them to develop side by side with the State ownership;

• — The Chinese State does not only actively formulate and oversee the implementation of general economic policies by individual State-owned enterprises (‘SOEs’), but it also claims its rights to participate in operational decision-making in SOEs. This is typically done through the rotation of cadres between government authorities and SOEs, through presence of party members in SOEs executive bodies and of party cells in companies, as well as by shaping the corporate structure of the SOE sector. In exchange, SOEs enjoy a particular status within the Chinese economy. This status entails a number of economic benefits, in particular the shielding from competition and the preferential access to relevant inputs, including financing. Higher leverage and labour productivity conduct to a surge in SOE debt, triggered by falling interest costs. This illustrates how easy monetary conditions can lead to a rapid SOE debt accumulation ¹⁸;

• — On the level of allocation of financial resources, the financial system in the PRC is dominated by the State-owned commercial banks. Those banks, when setting up and implementing their lending policy need to align themselves with the government’s industrial policy objectives rather than primarily assessing the economic merits of a given project. The same applies to the other components of the Chinese financial system, such as the stock markets, bond markets, private equity markets etc. Furthermore, borrowing costs have been kept artificially low to stimulate investment growth, which has led to the excessive use of capital investment with ever-lower returns on investment;

• — The steel industry is regarded as an important, fundamental sector of the Chinese economy, a national cornerstone ¹⁹ by the GOC, and as such is a particularly supported industry ²⁰. Moreover, from the five Chinese steel producers ranked in the top 10 of the world’s largest steel producers, four are SOEs. With the high level of government intervention in the steel industry and a high share of SOEs in the sector, even privately-owned steel producers are prevented from operating under market conditions;

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

• — The shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in China. All land is owned by the Chinese State (collectively owned rural land and State-owned urban land). Its allocation remains solely dependent on the State ²¹;

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

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

• (60) Specifically in the sector of the product under review, i.e. the steel sector, a substantial degree of ownership by the GOC persists in the sense of Article 2(6a) (b), first indent of the basic Regulation. The investigation confirmed that two main producers of the product under review, namely Daye Special Steel ltd and Zhejiang Pacific Seamless Tube are state-owned. Daye Special Steel ltd and Zhejiang Pacific Seamless Tube, are subsidiaries of CITIC Pacific Special steel. CITIC Pacific Special Steel is one of the largest dedicated manufacturers of special steel in China ²² and it belongs to CITIC Limited, which is a SOE and one of China’s largest conglomerates ²³. In its 2021 Annual report, CITIC states that ‘CITIC is committed to carrying out the national strategy, including green and low-carbon transformation, in order to fulfil the 14th Five-Year Plan. We will also strive to become a pioneer among state-owned enterprises in contributing to our dual carbon objectives and to become an ESG role model in the capital market ²⁴ ’.

• (61) 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 ²⁵, 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’ ²⁶ or also by the 14^th FYP on Developing Scrap Steel Industry whose key objectives is to ‘continuously increase the application ratio of scrap steel, and by the end of the 14^th FYP, the comprehensive scrap ratio of national steel making will reach 30 %.’ ²⁷

• (62) Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the sector can be seen at the provincial level, such as in Hebei which plans to ‘steadily implement the group development of organizations, accelerate the reform of mixed ownership of state-owned enterprises, focus on promoting the cross-regional merger and reorganization of private iron and steel enterprises, and strive to establish 1-2 world-class large groups, 3-5 large groups with domestic influence as the support’ and to ‘further expand the recycling and circulation channels of scrap steel, strengthen the screening and classification of scrap steel.’ ²⁸ Moreover, Hebei’s plan in the steel sector states: ‘Adhere to structural adjustment and highlight product diversification. Unswervingly promote the structural adjustment and layout optimization of the iron and steel industry, promote the consolidation, reorganization, transformation and upgrading of enterprises, and comprehensively promote the development of the iron and steel industry in the direction of large-scale enterprises, modernization of technical equipment, diversification of production processes, and diversification of downstream products’.

• (63) Similarly, the Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14^th FYP foresees the ‘construction of characteristic steel production bases […], build 6 characteristic steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhouou, etc., and improve the scale, intensification and specialization of the industry. Among them, by 2025, the production capacity of pig iron in Anyang will be controlled within 14 million tons, and the production capacity of crude steel will be controlled within 15 million tons.’ ²⁹

• (64) Further industrial policy objectives can also be seen in the planning documents of other provinces, such as Jiangsu ³⁰, Shandong ³¹, Shanxi ³², Liaoning Dalian ³³ or Zhejiang ³⁴.

• (65) As to the GOC being in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a) (b), second indent of the basic Regulation, it was not possible to systematically establish the existence of personal connections between producers of the product under review and the CCP. However, there are some specific examples for the product under review.

• (66) For instance, the chairman of the Board of Directors of CITIC Pacific Special Steel is secretary of the Party Committee ³⁵. Moreover, the Chairman of the supervisory board of CITIC Pacific Special Steel is deputy secretary of the Party Committee. ³⁶

• (67) Further, policies discriminating in favour of domestic producers or otherwise influencing the market in the sense of Article 2(6a) (b), third indent of the basic Regulation are in place in the sector of the product under review. The investigation identified other documents showing that the industry benefits from governmental guidance and intervention into the steel sector, given that the product under review represents one of its subsectors.

• (68) The steel industry keeps being regarded as a key industry by the GOC ³⁷. 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 ³⁸. 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. ³⁹

• (69) The important raw material used for the production of the product under review 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.’ ⁴⁰ 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.’ ⁴¹ In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of the main raw materials used in the manufacturing of the product under review. Such measures impede market forces from operating freely.

• (70) The product under review is also affected by the distortions of wage costs in the sense of Article 2(6a) (b), fifth indent of the basic Regulation, as also referred to above in recital 58. Those distortions affect the sector both directly (when producing the product under review or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in the PRC) ⁴².

• (71) Moreover, no evidence was submitted in the present investigation demonstrating that the sector of the product under review is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, as also referred to above in recital 58. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (72) Finally, the Commission recalls that, in order to produce the product under review, a number of inputs is needed. When the producers of the product under review 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.

• (73) As a consequence, not only the domestic sales prices of the product under review 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.

• (74) In sum, the evidence available showed that prices or costs of the product under review, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a) (b) of the basic Regulation, as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a) (a) of the basic Regulation, as described in the following section.

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

4.4.   Representative country

4.4.1.   General remarks

• (76) 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 PCR. For this purpose, the Commission used countries with a gross national income per capita similar to the PCR, on the basis of the database of the World Bank ⁴³;

• — Production of the product under review in that country ⁴⁴;

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

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

• (77) As explained in recital 49, the Commission issued a Note on the sources for the determination of the normal value. This Note describes the facts and evidence underlying the relevant criteria. The Note also informed interested parties of the Commission’s intention to consider Mexico as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

4.4.2.   A level of economic development similar to the PRC and production of the product under review

• (78) In the Note, the Commission identified 55 countries with a similar level of economic development as the PRC 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 ⁴⁵.

• (79) According to the information available to the Commission, the product under review is produced in seven countries: Canada, Japan, Mexico, Russian Federation, Saudi Arabia, South Korea and USA. Only two out of the seven countries are amongst 55 countries identified by the World Bank as having a gross national income similar to the People’s Republic of China – the ‘upper middle income’ group. These countries are Mexico and the Russian Federation.

• (80) The Commission further assessed the existence of market distortions by export and/or import restrictions on the product under review, as well as on the raw materials, namely those representing the most important items of cost of manufacturing used for producing the product under review. It found that in the Russian Federation, trade restrictions exist on steel scrap, electricity and gas, which are all important production factors used for the production of the product under review. In view of these trade restrictions in the Russian Federation, the Commission considered that the Russian Federation could not be considered an appropriate representative country.

• (81) No such restrictions were found for Mexico. Mexico has the same level of economic development as the People’s Republic of China and no restrictions on factors of production nor on the product under review were found.

• (82) After initiation, exporting producers Daye Special Steel Co., Ltd and Zhejiang Pacific Seamless Steel Tube Co., Ltd argued that Mexico may not fully satisfy the criteria for being an appropriate third country because: first, the production process appears to be different than the one Chinese exporting producers have; and second, the range of products produced by the Mexican producers seems much narrower (or less diversified) than the ones produced and exported by the Chinese exporting producers.

• (83) Apart from this general claim, the submission of the exporting producers did not contain any concrete evidence on why the production process and the product scope of producers of the product under review in Mexico was different compared to the PRC and what would be the impact on the factors of production. The Commission thus rejected the claim. No further comments were received.

4.4.3.   Availability of relevant public data in the representative country

• (84) The Commission analysed imports of the main factors of production into Mexico. The analysis of import data showed that factors of production used for the production of the product under review are imported into Mexico in sufficient quantities to constitute an appropriate benchmark and that these imports were not affected by imports from the PRC or any of the countries listed in Annex I to Regulation (EU) 2015/755 of the European Parliament and of the Council ⁴⁶.

• (85) The Commission also identified a company – Tamsa – whose recent financial data for the determination of manufacturing overhead, SG&A and profit, are available based on the financial data of the Tenaris Group (see Section 4.7.5).

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

• (87) Interested parties were invited to comment on the appropriateness of Mexico as a representative country and of Tamsa as a producer of the product under review in the representative country.

• (88) Apart from the comments detailed in recital 82, no comments were received.

4.5.   Level of social and environmental protection

• (89) Having established that Mexico 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.

4.6.   Conclusion

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

4.7.   Sources used to establish undistorted costs

• (91) In the Note on the sources for the determination of the normal value, the Commission listed the factors of production such as materials, energy and labour used in the production of the product under review by the exporting producers and 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.

• (92) The Commission also stated that, in order to construct the normal value in accordance with Article 2(6a) (a) of the basic Regulation, it would use the database Global Trade Atlas (‘GTA’) ⁴⁷ to establish the undistorted cost of most of the factors of production, notably the raw materials.

• (93) Considering all the information based on the request and subsequent information submitted by the applicant/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 and source of information

Raw materials	Commodity codes in Mexico	Value	Units	Source of information
Billets (semi-finished product of iron or non-alloy steel containing by weight 0,25 % of carbon)	720720	4,72	CNY/KG	GTA
Water	22019001 22019090	2,01	CNY/L	GTA
Nitrogen	280430	1,14	CNY/KG	GTA
Labour	Labour	Labour	Labour	Labour
Labour	N/A	17,21	CNY/hour	International Labour Organisation (ILO)
Energy	Energy	Energy	Energy	Energy
Electricity	N/A	1,09	CNY/Kwh	GlobalPetrolPrices.com
Gas	[N/A]	0,12	CNY/m3	CRE (‘Comisión Reguladora de Energía’)
By product/waste	By product/waste	By product/waste	By product/waste	By product/waste
Steel scrap	720410 720441 720449	3,31	CNY/KG	GTA
Recycling cutters – scrap steel	72041001	3,47	CNY/KG	GTA

4.7.1.   Raw materials

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

• (95) For a number of factors of production, the actual costs incurred by the cooperating exporting producers represented a negligible share 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.

• (96) In their comments following final disclosure, the cooperating exporting producers questioned the method used by the Commission to calculate undistorted values for consumables. Instead of establishing the total amount of consumables as a percentage of the total direct raw material costs and applying this percentage to the total undistorted raw material costs (the benchmark), it was argued that the Commission should have used an undistorted value for each individual item.

• (97) The Commission noted that it is its standard practice not to calculate an individual benchmark for consumables but to express them as a percentage of the total raw material cost on the basis of the cost data reported by the exporting producers and then to apply this percentage to the recalculated cost of materials when using the established undistorted prices. In addition, as explained in recital 95, these costs represented a negligible value and regardless of the method used, they would have had no appreciable impact on the dumping margin calculations. The Commission considered that its methodology for calculating an undistorted value for consumables was appropriate, in that it preserved the cost structure of the relevant exporting producers. Moreover, no better information was available at time of the investigation and as the exporting producers did not substantiate their comments by quantifying the impact of using their proposed method. Therefore the claim regarding consumables was rejected.

• (98) The Commission expressed the transport cost incurred by the cooperating exporting producers 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.

4.7.2.   Labour

• (99) International Labour Organization (‘ILO’) provides information on average monthly earnings of employees and average weekly hours actually worked per employed person in Mexico every year in different sectors.

• (100) The Commission used that information of 2021 to determine the average hourly wage in the manufacturing sector ⁴⁸. To arrive at the total labour cost, the Commission relied on the data published by OECD in Taxing Wages 2021, which covered the period of 2021 ⁴⁹. To the hourly wage in manufacturing, the Commission added social security contributions.

4.7.3.   Electricity

• (101) The average electricity prices for businesses per kWh in Mexico in 2021 is published by GlobalPetrolPrices.com, i.e., the source identified in the review request. Based on this price, the Commission determined the average electricity price in the review investigation period (2021) ⁵⁰.

4.7.4.   Natural gas

• (102) The price of natural gas for companies (industrial users) in Mexico is published by the energy regulator ‘Comisión Reguladora de Energía’ (CRE) on a monthly basis. The Commission used an average price for businesses reported by the CRE in the review investigation period ⁵¹.

4.7.5.   Manufacturing overhead costs, SG&A, profits

• (103) 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.

• (104) To establish an undistorted and reasonable amount for SG&A and profits, the Commission used financial data relating to the activities of Tamsa, available within the consolidated financial accounts of the mother company, Tenaris S.A. ⁵²

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

• (106) In their comments following final disclosure, the cooperating exporting producers questioned the method used by the Commission to calculate overheads for the same reasons as they questioned the method used to calculate consumables, see recital 96, arguing that the Commission instead of having used a ratio for overheads and applying this to the undistorted direct cost, should have established all the factors separately and have replaced theses with surrogate values.

• (107) With regard to this claim, the Commission noted that the overheads data separately for each factor was not readily available in the financial statements of the producer in the representative country. Therefore, the Commission considered that its methodology for calculating an undistorted value for overheads was appropriate, in that it preserved the cost structure of the relevant exporting producers. Moreover, no better information was available as the exporting producers did not suggest an alternative undistorted benchmark for overheads. Therefore, the claim regarding overheads was rejected.

4.7.6.   Calculation of the normal value

• (108) 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.

• (109) 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 producers. The Commission reduced the costs of manufacturing by the undistorted costs of by-products re-used in the production process. These consumption ratios were verified during the verification. The Commission multiplied the consumption ratios by the undistorted costs per unit observed in the representative country (Mexico), as described in Table 1.

• (110) Once the undistorted manufacturing cost were established, the Commission added the manufacturing overheads, SG&A and profit as noted in Section 4.7.5. Manufacturing overheads were determined based on the data of the exporting producers. SG&A and profit were determined based on the financial statements of 2021 of Tenaris Group ⁵³, incorporating the Mexican subsidiary Tamsa. The Commission added the following items to the undistorted costs of manufacturing:

• — Manufacturing overheads, which accounted in total for 7,8 % of the direct costs of manufacturing,

• — SG&A, which accounted for 26,16 % of the Costs of Goods Sold (‘COGS’) of the Tenaris Group incorporating the Mexican subsidiary Tamsa and,

• — Profits, which amounted to 15,34 % of the COGS as achieved by the Tenaris Group.

• (111) 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.

• (112) The exporting producers questioned the way SG&A and profits were determined by the Commission by asking why SG&A and profit were expressed as a percentage of COGS instead of turnover, whether direct selling expenses were included in SG&A and why the Commission had used the SG&A and profit of the Tenaris Group instead of the product concerned of the Mexican subsidiary Tamsa.

• (113) The Commission noted that it is its standard practice to express SG&A and profit as a percentage of COGS to construct the normal value and to include direct selling expenses in the SG&A. Article 2(6a)(a) of the basic Regulation requires that the normal value is constructed on the basis of costs of production and that it includes an undistorted and reasonable amount for SG&A costs and for profits. It follows that to construct the normal value based on costs, the SG&A and profit which are to be added to these costs need to be expressed in function of these costs. The Commission used the SG&A and profit of the Tenaris group as the SG&A and profit of Tamsa was not available, and because the data of the Tenaris group was the best readily available alternative. Therefore, the Commission considered that its methodology for calculating SG&A and profit was appropriate, not least as no better information was available and rejected the claim.

4.7.7.   Export price

• (114) The cooperating exporting producers exported to the Union either directly to independent customers or through a related trader located in the PRC.

• (115) The Commission determined the export price as the price actually paid or payable for the product under review when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

4.7.8.   Comparison

• (116) The Commission compared, per product type, the constructed normal value established in accordance with Article 2(6a) (a) of the basic Regulation and the export price of the cooperating exporting producers on an ex-works basis as established above.

• (117) 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 bank charges, commissions, credit costs, freight, handling, other discounts, packing and insurance.

4.7.9.   Dumping margins

• (118) For the cooperating exporting producers, 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 under review, in accordance with Article 2(11) and (12) of the basic Regulation.

• (119) On this basis, the weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, was in the range of 10 % to 44 % for the cooperating exporting producers. It was therefore concluded that dumping continued during the review investigation period.

5. LIKELIHOOD OF CONTINUATION OF DUMPING

• (120) Further to the finding of the existence of dumping during the review investigation period, the Commission investigated, in accordance with Article 11(2) of the basic Regulation, the likelihood of continuation of dumping, should the measures be repealed. The following additional elements were analysed: the production capacity and spare capacity in the PRC and the attractiveness of the Union market.

5.1.   Production capacity and spare capacity in the PRC

• (121) According to the applicants, the PRC is the biggest producer of the product under review in the world with 23 producers, with a total of 33 production lines.

• (122) In the review investigation period, according to the applicants’ estimates, the total production in the PRC of the product under review represented around 2,3 million tonnes. According to the same source, the total estimated production capacity was 5 million tonnes. Hence the spare capacity to produce the product under review in the PRC during the review investigation period represented around 2,7 million tonnes. Since the Union consumption in the review investigation period was estimated at around 100 thousand tonnes (see Table 2), the spare capacity of the Chinese exporting producers exceeded the consumption of the product under review in the Union market around 27 times. In comparison, the applicants estimated that during the same period, the production capacities of the 12 existing companies in the rest of the world were around 2,9 million tonnes ⁵⁴. Due to the non-cooperation by the Government of China and the low cooperation of Chinese exporting producers, the Commission did not receive further information in respect of the production in the PRC and imports into the Union.

• (123) However, in light of the (high) production levels and spare capacity in the PRC in comparison to the Union, the Commission considered it likely that Chinese exporting producers would redirect their spare capacities increasingly towards the Union market in large quantities at dumped prices should the measures lapse.

5.2.   Attractiveness of the Union market and the prices on the Union market.

• (124) During the review investigation period, the Chinese exporting producers continued to export the product under review to the Union. The exports of the cooperating Chinese exporting producers amounted in the review investigation period to 2,9 thousand tonnes which represented between [2,5-3,5 %] of the market share in the Union market. As detailed in recital 43, since the imports into the EU only relate to the cooperating exporting producers’ data, while overall production in the PRC in the review investigation period was considerably higher, the total Chinese exporting producers’ market share of the product under review in the Union was likely higher. Therefore, the Union market remains an attractive export market for the Chinese exporting producers, despite the measures in force.

• (125) In the applicants’ view, the attractiveness of the Union market lies as well in the relatively high average price level, customers’ solvability and sound logistical infrastructure with well-equipped harbours, storage and distribution facilities, and a high level of industrial consumption. Furthermore, the Union is at present the largest steel market in the world in terms of volumes.

• (126) Furthermore, in the review investigation period, based on the comparison between the prices of the sampled Union producers and the cooperating Chinese exporting producers, the Chinese export prices undercut the Union prices, when the anti-dumping duty is excluded (see recital 152), demonstrating that the Union market is attractive in terms of prices.

• (127) The implementation of the US section 232 measures and in particular their import duties on the product concerned from the Chinese exporting producers further limit the possibilities for exporting producers to export the product concerned to other important destinations than the Union.

• (128) Therefore, in terms of the size and the prices, the Union market remained an attractive market for the Chinese exporting producers.

5.3.   Conclusion on likelihood of continuation of dumping

• (129) The investigation showed that the Chinese exports continued to enter the Union market at dumped prices during the review investigation period.