Commission Implementing Regulation (EU) 2023/2758 of 12 December 2023 imposing a definitive anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the Federative Republic of Brazil, the Islamic Republic of Iran and the Russian Federation following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

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

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

Having regard to Regulation (EU) 2015/477 of the European Parliament and of the Council of 11 March 2015 on measures that the European Union may take in relation to the combined effect of anti-dumping or anti-subsidy measures with safeguard measures (2), and in particular Article 1 thereof,

Whereas:

(1) By Commission Implementing Regulation (EU) 2017/1795 (3), the European Commission (‘the Commission’) imposed anti-dumping duties on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel, originating in the Federative Republic of Brazil (‘Brazil’), the Islamic Republic of Iran (‘Iran’), the Russian Federation (‘Russia’) and Ukraine (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

(2) On 18 January 2021, following a request lodged by the European Steel Association (‘EUROFER’ or ‘the applicant’), the Commission initiated a partial interim review limited in scope to an examination of dumping as far as one Russian producer, PAO Severstal, was concerned. However, on 18 March 2022, EUROFER, withdrew its request and the review investigation was subsequently terminated by Commission Implementing Decision (EU) 2022/624 (4).

(3) Following the publication of a notice of impending expiry (5) the Commission received a request for an expiry review of the original measures pursuant to Article 11(2) of the basic Regulation.

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

(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, the Commission initiated, on 5 October 2022, an expiry review with regard to imports to the Union of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Brazil, Iran, Russia and Ukraine 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 (6) (‘the Notice of Initiation’).

(6) On 23 November 2022 the applicant withdrew its request for an expiry review investigation of the original measures as far as Ukraine was concerned. The Commission subsequently, on 16 February 2023, decided to terminate the expiry review investigation as far as imports from Ukraine were concerned in accordance with Article 9(1) of the basic Regulation and to continue the review investigation regarding imports from Brazil, Iran and Russia (7).

(7) Given that the expiry review investigation vis-à-vis Ukraine was terminated, the original measures against imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel, originating in Ukraine automatically lapsed 5 years after the imposition of the original measures.

(8) The anti-dumping measures currently in force, and which are subject to this expiry review investigation, are hence those applicable to imports from Brazil, Iran and Russia (‘the countries concerned’). The measures are imposed in the form of a fixed duty per tonne and the duty rates range between 54,50 and 63,00 EUR/tonne for Brazil, 57,50 EUR/tonne for Iran and between 17,60 and 96,50 EUR/tonne for Russia.

(9) The investigation of continuation or recurrence of dumping covered the period from 1 July 2021 to 30 June 2022 (‘review investigation period’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2019 to the end of the review investigation period (‘the period considered’).

(10) 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, known Union producers, the known producers and the authorities in the countries concerned, known importers, users, traders as well as associations known to be concerned about the initiation of the expiry review and invited them to participate.

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

(12) The Commission received comments on initiation from the Ministry of Economic Development of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation (‘GOR’), the Federal Government of Brazil (‘GBR’), represented by the Mission of Brazil of the European Union, and the Brazilian producers Usinas Siderúrgicas de Minas Gerais S.A (‘USIMINAS’) and Companhia Siderúrgica Nacional (‘CSN’).

(13) The GOR recalled that the Union’s sanctions resulting from Russia’s unprovoked military aggression against Ukraine affected the imports of the product concerned. It added that on 26 March 2022 the Union imposed an import ban on Russian iron and steel products and alleged that since the second quarter of 2022 Russian imports of almost all types of HRF stopped. According to the GOR, these sanctions have a long-lasting nature and at the time of the investigation there were no signs that they would be softened. Therefore, the GOR claimed that the Commission should consider that sanctions have a bearing for the assessment of the likelihood of continuation of dumping – notably for the assessment of the attractiveness of the Union market and of the applicant’s statement in the Request that third country markets could not absorb Russian steel capacity (8). In relation to the attractiveness of the Union market, the GOR argued that disruption of trade flows and supply chains due to the sanctions reduced the attractiveness of the Union market for Russian suppliers due to the perceived risk of trade restrictions. Moreover, according to the GOR, rekindling trade ties between the Union and Russia will require a lot of time and efforts. Finally, the GOR also claimed that likelihood of recurrence of injury could not be established due to the imposition of the Union’s sanctions.

(14) First, as regards the GOR’s claim that Russian imports of almost all types of HRF stopped as of the second quarter of 2022, the Commission noted that the fourth package of sanctions, to which the GOR referred to, imposed an import ban on only 21 out of 24 CN codes mentioned in recital 42 (9). However, importantly, according to Article 3g, paragraph 2 of Regulation (EU) No 833/2014 as amended by Regulation (EU) 2022/428, this import ban did not apply to the execution until 17 June 2022 of contracts concluded before 16 March 2022, or ancillary contracts necessary for the execution of such contracts. Therefore, except for the last 13 days of the review investigation period, sanctions did not have any impact on the imports of the product concerned from Russia. In addition, an import ban on the remaining 3 CN codes was imposed only after the review investigation period by virtue of the eighth package of sanctions (10). This latter import ban did not apply to the execution until 8 January 2023 of contracts concluded before 7 October 2022. Therefore, imports of the product concerned from Russia could continue also in the second quarter of 2022. Second, concerning the prospective impact of the sanctions on the product concerned from Russia, the Commission recalled that those sanctions are linked to Russia’s unprovoked military aggression against Ukraine and the underlying geopolitical situation. Their scope, modulation, and/or duration are therefore unpredictable. Furthermore, anti-dumping measures have a lifetime of five years. Considering these uncertainties and the fact that the Council may further amend the precise scope and duration of sanctions at any moment, the Commission found that they did not preclude the initiation of a review investigation and they cannot have a bearing in its conclusions on the likelihood of continuation or recurrence of dumping, neither with regard to the attractiveness of the Union market, nor with regard to the diversion of export flows to the Union due to the situation in third country markets, and on the likelihood of recurrence of injury. In particular, the GOR did not bring any evidence to support the view that specifically the resumption of dumped imports of the product concerned from Russia will require a lot of time and efforts. Therefore, this claim was rejected.

(15) The GOR furthermore claimed that the information referred to in the request concerning the planned capacity expansion, based on the OECD report on Latest Developments in Steelmaking Capacity for 2021 (11), was not accurate. In particular, the GOR alleged that none of the steelmaking projects in Russia listed in the request had been implemented and that the company Don-Metal was a trader of metal scrap and not a producer. In addition, according to the GOR, the company Novolipetsk Steel (NLMK) was not expanding its capacity, as reported in the request based on a press report of Steel Business Briefing (‘SBB’) but was carrying out environmental modernization of the existing steelmaking production.

(16) The Commission noted that, even without considering the pieces of evidence contested by the GOR, the evidence of overcapacity submitted by EUROFER (12) in the request remained unchallenged. While it is true that an expiry review is a forward-looking exercise and that planned capacity expansion can indeed play a role in assessing whether dumping is likely to continue or to recur, existing overcapacity – as opposed to future overcapacity – is a much stronger indicator of likelihood. Therefore, the request included sufficient evidence to justify the initiation of the expiry review and this claim was rejected.

(17) Furthermore, the GOR claimed that Annex 5 of the non-confidential version of the request did not include the dumping calculation for Russia and that the bundle of annexes labelled as ‘HRFS_ER_Annexes_Part1’ did not include any data on the export price.

(18) The Commission noted that, while the file in Annex 5 labelled as ‘Dumping margin calculation 4 countries’ inadvertently included only the first page of the document, the request for review provided all the necessary elements for the dumping calculation (13) and indicated the resulting average dumping margin for the countries concerned (14). Indeed, as shown by recital 19, the GOR run the dumping calculation for Russia based on the data of the request for review and provided comments on it. In particular, concerning the data on the export price, as it was clear from the request for review (15), EUROFER based the export prices for its calculation on CIF prices from Eurostat data, which are publicly available, and, alternatively, on FOB prices from Trade Data Monitor (‘TDM’) export data, both appropriately adjusted to EXW prices. As explained in the request for review (16), TDM export data were provided in Annex 6. Annex 6 was part of the bundle of annexes mentioned by the GOR, the same as Annex 5. Therefore, this claim was rejected. In any case, on 18 November 2022 EUROFER submitted the complete Annex 5 so that all interested parties could submit comments in due course.

(19) Finally, the GOR claimed that the only export price that it could find in the request for review was the Russian export price to the Union from Eurostat which, for the period identified in the request, was set at EUR 823 per tonne (17). When comparing it with the normal value for the same period, adjusted by the estimated inland freight, thus corresponding to EUR 650-750 per tonne, it argued that Russian imports were not dumped on the Union market.

(20) The Commission noted that in the request for review EUROFER submitted two sets of Russian domestic prices in Annex 5: EXW prices from the Developing Markets Steel Review published by MEPS International Ltd. (‘MEPS’) and CPT prices from SBB (18). As shown in Annex 5, EUROFER calculated the dumping margin in the request based on domestic data from MEPS. Indeed, data from MEPS were provided also for Brazil and Ukraine (contrary to data from SBB, which were only available for Russia) and EUROFER calculated the dumping margin consistently across three of the countries concerned with data from the same source. Then, EUROFER made two parallel dumping calculations, comparing domestic prices from MEPS both to export prices from Eurostat and from TDM at EXW level. In both instances, EUROFER found dumping. Instead, the GOR arbitrarily chose to use only CPT domestic prices from SBB. Then, it adjusted CPT domestic prices from SBB to EXW level by the estimated inland freight. Conversely, it did not make any adjustment to the CIF export price from Eurostat. Therefore, it wrongly compared EXW domestic prices with CIF export prices. Thus, the claim was rejected.

(21) USIMINAS stated that the methodology used by EUROFER to show the prima facie existence of recurrence of dumping of imports from Brazil, and in particular for determining the Brazilian export using data from Türkiye, Chile and Portugal, is not applicable in this case, and has been misapplied. According to USIMINAS, pursuant to Articles 2(8) and 2(9) of the basic Regulation, the export price can only be constructed when there are no exports to the Union. Given that in this case, there were exports from Brazil to the Union during the reporting period, USIMINAS argued that the request for review should have used the actual export prices of Brazil to the Union and thus the Commission was wrong to accept the information submitted in the request for review.

(22) The Commission recalled that in accordance with Article 11(2) of the basic Regulation, an expiry review shall be initiated where the request for review contains sufficient evidence that the expiry of the measures would likely result in a continuation or recurrence of dumping and injury. In the request for review, the applicant argued that the expiry of the measures would result in the recurrence of dumping from Brazil, and that imports would flood back the Union market at dumped prices, in line with their current prices in third country markets. To support its argument, and in view of the small volumes of imports from Brazil to the Union during the reporting period, the applicant used export prices from Brazil to all third countries, and separately to Türkiye, Chile and Portugal. The Commission considered that these prices were a relevant element for its assessment of the merits of the file, and that together with other information provided by the applicant, constituted sufficient evidence, meeting the requirements of Article 11(2) for the initiation of the investigation. Therefore, the claim was rejected.

(23) USIMINAS, claimed that the Commission should not have accepted EUROFER’s cumulative analysis as sufficient prima facie evidence for initiation of the case. Furthermore, USIMINAS, CSN, and the GBR submitted that a cumulative assessment of the effects of the imports from the countries concerned was not warranted, in light of the different conditions of competition between imports from Brazil and the imports from the other investigated countries, the negligible import volumes, and the price development of imports from Brazil.

(24) The Commission disagrees with this claim. Indeed, the request for review claimed a fragile situation for the Union industry with a likelihood of recurrence of injury. The applicant thus had to provide evidence about the likely evolution of Brazilian imports in the absence of measures. In this respect, the request looked at factors such as overcapacity in Brazil, the price level of Brazilian exports to third countries, and the attractiveness of the Union market (including an undercutting calculation for Brazil). All of these factors were analysed individually for Brazil rather than on a cumulative basis. The actual volume of imports was indeed provided on a cumulative basis, but this was not as such the basis for reaching a conclusion on recurrence of injury. Therefore, the request for review was deemed to contain sufficient evidence for initiation of the case.

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

(26) 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 representativity in terms of size of the production and sales volume of the product under review whilst the geographical location was also considered. This sample consisted of three Union producers. The sampled Union producers accounted for 25 % of the estimated total production volumes and 26 % of sales of the like product in the Union. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No substantive comments were received and the provisional sample was confirmed.

(27) 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.

(28) However, no unrelated importer came forward and provided the requested information.

(29) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all producers in the countries concerned to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Missions of Brazil, Iran and Russia to identify and/or contact other producers, if any, that could be interested in participating in the investigation.

(30) Four producers in Brazil provided the requested information and agreed to be included in the sample.

(31) In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two groups of producers made up of three producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available, covering 98 % of the total export volume to the Union from Brazil in the review investigation period. In accordance with Article 17(2) of the basic Regulation, all known producers concerned, and the authorities of Brazil were consulted on the selection of the sample. No comments were received on the sampling.

(32) In the case of Iran, one producer submitted a sampling reply. Therefore, in view of the low number of producers coming forward, sampling was not necessary.

(33) In the case of Russia, the Commission did not receive any sampling replies from the Russian producers.