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

• (136) After disclosure, the GBR and USIMINAS argued that the methodology used by the Commission to recalculate Brazilian data was unclear and could not be verified by interested parties. They requested the Commission to rely exclusively on official import statistics in its analysis. USIMINAS added that the import data calculated by the Commission distorted indicators such as import prices and total import volumes. Furthermore, both the GBR and USIMINAS affirmed that the market share of Brazilian imports had been overstated, and that the Brazilian market share should be expressed as a percentage of aggregate consumption. The same claim was put forward by CSN, adding that looking at all Brazilian sales and comparing them to only free market consumption, creates an asymmetry in the Commission assessment of the market share, as not only it artificially inflates the Brazilian imports market in the EU, but it also results in an unjustified cumulative assessment of Brazilian imports with Russian imports. On the issue of comparison with the free market, in particular, the GBR referred to the paragraphs 7.272 and 7.273 of the panel report of 31 October 2018 on the dispute ‘Morocco – Anti-Dumping Measures on Certain Hot-Rolled Steel from Turkey (WT/DS513/R)’, which called upon an investigating authority to analyse all parts of the state of the domestic industry, to ensure that the authority would not focus only on parts of the domestic industry that were performing poorly and excluding those performing well, and vice versa.

• (137) As already explained in footnote 38, the Commission noted a discrepancy between Eurostat data and the sampled companies’ verified sales data to the European Union. In particular, the two sampled companies’ verified sales volumes to the EU were higher than the total Brazilian import volumes reported by both Eurostat and Surveillance. The statistical data could therefore not be exclusively taken into account for determining the import volumes from Brazil. Instead, the Commission relied on import statistics from the Surveillance database adjusted with the verified sales volumes from the two sampled companies to establish the total import volumes. The adjustment was made on the basis of the respective sampled company’s TARIC additional code in the Surveillance database, which provided company specific information. The Commission could not disclose the detailed data behind this calculation methodology, as this would constitute a breach of confidentiality towards the cooperating exporting producers under Article 19(1) of the basic Regulation. In addition, the Commission adjusted the import prices, total import volumes and the Union free market consumption accordingly, as already explained in footnote 38. On the claims concerning the calculation of the market share, the Commission established the market share of the imports on the basis of a comparison between import volumes and the Union free market consumption, in accordance with the methodology in the original investigation ³⁹ as required by Article 11(9) of the basic Regulation. In addition, the Commission recalled that captive sales and sales to related parties are two different concepts. For sales to be considered captive, the (related) buyer cannot have a free choice of supplier. As already recalled in recital 58. In the present case, there is no indication or evidence that those sales were exclusive. In fact, those companies seem to able and did source from third parties in the original investigation. On the claims that such methodology results in an unjustified cumulative assessment of Brazilian imports with Russian imports, the Commission recalled that the Brazilian and Russian market share were calculated separately, and that the likelihood of recurrence of injury analysis was first performed on a country-by-country basis. Furthermore, the Commission recalled that in its analysis of the state of the Union industry, it examined both at the Union industry performance as a whole, and also the captive and free market separately (e.g. recital 157). In particular, this was confirmed by paragraph 7.6.2.1.2.1 of WT/DS513/R, whereby the Appellate Body affirmed that ‘in cases where investigating authorities examine one part of a domestic industry, they should, in principle, examine in like manner all of the other parts that make up the industry, as well as examine the industry as a whole’. Therefore, the Commission rejected these claims.

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

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

• (140) The price comparison was made at the same level of trade and, in analogy with a precise undercutting calculation methodology, the result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the review investigation period. It showed that on average the Russian export prices to the Union would be lower than Union industry’s average prices, by around 5 %.

5.4.   Imports from third countries other than Brazil, Iran and Russia

• (141) The imports of the product under review from third countries other than Brazil, Iran and Russia were mainly from Türkiye and India.

• (142) The (aggregated) volume of imports into the Union as well as the market share and price trends for imports of the product under review from other third countries developed as follows:

Table 4

Imports from third countries

		2019	2020	2021	Review investigation period
Total of all third countries, except the countries concerned	Volume (tonne)	5 757 331	4 262 990	7 505 856	8 182 615
	Index	100	74	130	142
	Market share	17,76 %	15,24 %	21,53 %	23,73 %
	Average price (EUR/tonne)	491	442	768	907
	Index	100	90	156	184
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (143) Total imports of the product under review from third countries other than the countries concerned increased by 42 % (from 5,75 million to 8,18 million tonnes) over the period considered. The increase in import volumes also translated in an increase of third countries market share by 6 percentage points over the period considered. Overall, the Union imported HRF from more than 40 countries, with none of the other third countries holding a market share of more than 4 % in the Union market ⁴⁰.

5.5.   Economic situation of the Union industry

5.5.1.   General remarks

• (144) The assessment of the economic situation of the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (145) As mentioned in recital 26, sampling was used for the assessment of the economic situation of the Union industry.

• (146) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data provided by the applicant that related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

• (147) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, employment, productivity, magnitude of the dumping margin and recovery from past dumping.

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

• (149) As explained in recitals 122-123, to provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire production of the product concerned and determined whether the production was destined for the captive or the free market. Where relevant and possible the Commission analysed separately injury indicators related to the free and the captive market.

5.5.2.   Macroeconomic indicators

5.5.2.1.   Production, production capacity and capacity utilisation

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

Table 5

Production, production capacity and capacity utilisation

	2019	2020	2021	Review investigation period
Production volume (tonnes)	70 920 480	61 096 994	69 531 100	68 417 802
Index	100	86	98	96
Production capacity	92 584 290	91 965 705	93 249 147	93 214 413
Index	100	99	101	101
Capacity utilisation	77 %	66 %	75 %	73 %
Index	100	87	97	96
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (151) The production volume of the Union industry decreased overall by around 4 % during the period considered, with a significant drop in 2020 followed by a recovery in 2021 due to the rebound in steel demand. During the review investigation period, production volume decreased slightly compared to the previous year.

• (152) While the production capacity of the Union industry slightly increased during the period considered by 1 %, the capacity utilisation followed the same negative trend as production volume and decreased by 4 % between 2019 and the review investigation period.

5.5.2.2.   Sales volume and market share

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

Table 6

Sales volume and market share in the free market

	2019	2020	2021	Review investigation period
Sales on the free market	25 185 306	22 020 277	25 204 938	24 689 248
Index	100	87	100	98
Market share	77,7 %	78,7 %	72,3 %	71,6 %
Index	100	101	93	92
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (154) The Union industry sales volume on the Union market followed a trend similar to Union consumption during the period considered. It decreased in 2020 for the reasons explained in recital 125, followed by a rebound in 2021. During the review investigation period, sales volume decreased by 2 % compared to 2019.

• (155) During the period considered, the Union industry’s market share in terms of Union consumption increased slightly from 2019 to 2020 from 77,7 to 78,7 %. Between 2020 and 2021, it dropped by 6 percentage points. During the review investigation period, the Union industry further lost market share, dropping from 72,3 % to 71,6 %. As shown in Tables 1and 4, this decline is explained by the fact that the market share of imports from third countries kept increasing between 2020 and the review investigation period, which explains the loss of the Union industry on the free market share.

• (156) The Union industry’s captive volume as a share of total production developed over the period considered as follows:

Table 7

Captive volume on the Union market (tonnes)

	2019	2020	2021	Review investigation period
Captive volume on the Union market	42 010 993	36 988 575	40 424 417	39 811 331
Index	100	88	96	95
Total production of Union Industry	70 920 480	61 096 994	69 531 100	68 417 802
% of captive volume compared to total production	59,23	60,54	58,13	58,18
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (157) The Union industry captive volume (composed of captive use and captive sales on the Union market) decreased by 12 % from 2019 to 2020 and recovered by 7 percentage points compared to 2020 in the review investigation period, resulting in an overall decrease of 5 % during the period considered, from about 42 million tonnes to almost 40 million tonnes from the start to the end of the period considered. Overall, the captive and free market followed the same trend. Therefore, the Commission concluded that development of the captive market did not have any significant impact on the Union industry performance on the free market.

• (158) The Union industry’s captive market share (expressed a percentage of total production) remained relatively stable during the period considered, ranging between 58,13 % and 60,54 %.

5.5.2.3.   Growth

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

5.5.2.4.   Employment and productivity

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

Table 8

Employment and productivity

	2019	2020	2021	Review investigation period
Number of employees	38 980	36 207	38 470	39 937
Index	100	93	99	102
Productivity (unit/employee)	1 819	1 687	1 807	1 713
Index	100	93	99	94
Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.	Source: Macro questionnaire reply from EUROFER.

• (161) The number of employees engaged in the production of the product under review decreased sharply from 2019 to 2020 and increased from then on to the end of the review investigation period. Overall resulting in a slight increase of 2 % over the period considered.

• (162) The productivity of the Union industry’s workforce, measured as output (tonnes) per employee, decreased by 6 % over the period considered.

5.5.2.5.   Magnitude of the dumping margin and recovery from past dumping

• (163) As explained in recital 128, there was no cooperation from exporting producers from Russia. Only one Iranian and two Brazilian exporting producers cooperated fully during this proceeding.

• (164) As shown before, there were indications that dumping continued concerning imports from Brazil (see recital 63) and Russia (see recital 74) during the review investigation period. All indicative dumping margins were above the de minimis level.

• (165) For Iran, as explained in recital 66, it was not possible to establish an affirmative determination of dumping during the review investigation period. The investigation therefore focused on the likelihood of a recurrence of dumping should the anti-dumping measures be repealed.

• (166) Despite the fact there was still dumping for Brazil and Russia, albeit in small volumes, the analysis of the injury indicators shows that the measures in place had a positive impact on the Union industry. As a matter of fact, the anti-dumping measures imposed following the original investigation allowed the Union industry to recover from past dumping. This was also confirmed by the Commission findings in the anti-dumping investigation against hot-rolled flat products from Türkiye ⁴¹. The Union industry managed to recover from the injurious effects of the dumped imports from Russia, Brazil and Iran by the end of 2018. However, the recovery of the Union industry’s economic situation came to an abrupt halt and was reversed in 2019, when the Union industry had to compete with significant volume of low-priced dumped imports from Türkiye, forcing it to set its prices below costs to keep its market share and thus to suffer from material injury. Following imposition of measures against imports from Türkiye in 2021 and the post-Covid recovery, the situation of the Union industry improved and recovered by the end of the RIP. Hence, during the review investigation period, the Union industry was no longer considered injured.

5.5.3.   Microeconomic indicators

5.5.3.1.   Prices and factors affecting prices

• (167) The average unit sales prices of the sampled Union producers to customers in the Union developed over the period considered as follows:

Table 9

Sales prices and cost of production in the Union (EUR/tonne)

	2019	2020	2021	Review investigation period
Average unit sales price on the free market	526	464	744	954
Index	100	88	141	181
Unit cost of production	557	534	669	800
Index	100	96	120	144
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (168) The Union industry’s average sales prices decreased by 12 % between 2019 and 2020 and increased drastically from 2020 to the end of the review investigation period resulting in and overall increase of 81 % over the period considered. The trend of unit sales prices during the period considered was influenced by the severe disruptions caused by the Covid-19 pandemic and the post-pandemic resumption in demand. Starting in 2021, high steel demand, tight supply, and increased cost of production were the factors that influenced the sudden and significant rise in the unit sales price.

• (169) The unit cost of production increased over the period considered by 44 %. Both in 2019 and 2020, the unit cost of production was above the unit sales price. The inability for the Union industry to reflect the increased cost of production in their sales price during this period was due to large volumes of dumped imports from Türkiye, pushing the prices downwards ⁴². In 2020, both cost of production and sales prices dropped, but the former to a smaller extent. This was due to the slump in the market during the Covid-19 pandemic, depressing prices significantly whilst the cost of production was less affected. The unit cost of production surged in 2021 due to a jump in energy and commodity prices. This trend continued throughout the review investigation period, where Russia’s unprovoked military aggression against Ukraine exacerbated the energy crisis already ongoing since 2021. However, due to the post-Covid recovery, demand surged as well and consequently, prices also increased significantly (almost doubling between 2020 and the review investigation period), even more than the increase in production costs in the same period.

5.5.3.2.   Labour costs

• (170) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 10

Average labour costs per employee

	2019	2020	2021	Review investigation period
Average labour costs per employee (EUR)	69 352	69 748	78 444	81 000
Index	100	101	113	117
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

• (171) During the period considered average labour costs remained stable from 2019 to 2020 and from then on increased, resulting in an overall increase of 17 % at the end of the investigation period. The number of employees during this period went up as well.

5.5.3.3.   Inventories

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

Table 11

Inventories

	2019	2020	2021	Review investigation period
Closing stocks (tonnes)	533 200	390 880	522 405	476 151
Index	100	73	98	89
Closing stocks as a percentage of production	4,5	3,8	4,6	4,3
Index	100	84	121	94
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

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

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

• (174) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 12

Profitability, cash flow, investments and return on investments

	2019	2020	2021	Review investigation period
Profitability of sales in the Union free market (% of sales turnover)	–8,1	–18,8	13,9	18,3
Index	- 100	- 231	170	224
Cash flow (EUR)	-6 211 922	- 130 468 840	645 183 908	984 716 910
Index	- 100	-2 100	10 386	15 852
Investments (EUR)	433 154 031	181 406 902	394 535 083	351 855 569
Index	100	42	91	81
Return on investments	–6,7 %	–13,8 %	17,1 %	27,2 %
Index	- 100	- 206	254	405
Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.	Source: Sampled Union producers questionnaire reply.

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

• (176) Profitability followed an inverted bell curve trend and increased overall by 26,4 percentage points during the period considered. Losses were incurred in 2019 and reached its lowest level, namely -18 %, in 2020 at the core of the pandemic. In 2021 profit strongly rebounded to 13,9 % and increased further to reach 18,3 % in the review investigation period.

• (177) Dumped imports at low prices from Türkiye rapidly increased in 2017 and 2018 ⁴³, which explained the low profitability in 2019. This was then exacerbated by the shocks caused by the global pandemic in 2020, such as supply chain disruptions and the decline in steel consumption. Spike in steel demand, coupled with increased sales prices, led to high profits in 2021, which marked an exceptional year for the Union industry. This trend continued throughout the review investigation period, marking an even higher profitability for the Union industry.

• (178) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in a similar manner to profitability: a negative record in 2019, followed by a drastic further decrease in 2020, and a strong rebound in 2021, which increased even more in the review investigation period.

• (179) Between 2019 and the review investigation period, investments decreased by 19 %. Overall, during the period considered, the investment flows followed an inverted bell curve distribution: investment dropped significantly in 2020, followed by a peak in 2021. During the review investigation period, investment slightly decreased compared to the previous year. In general, the investments were aimed at improving quality and greening of production.

• (180) The return on investments (ROI) is the profit in percentage of the net book value of investments. Compared to 2019, the return on investment deteriorated in 2020, and rebounded in 2021. Overall, the ROI significantly improved during the review investigation period as compared to 2019. In fact, during the period considered, the ROI increased by around 20 percentage points.

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

5.6.   Conclusion on injury

• (182) Following the imposition of anti-dumping measures against imports of HRF from Brazil, Iran and Russia in 2017, imports from Brazil decreased, while imports from Russia remained overall at similar levels compared to the original investigation. In the case of Iran, imports of HRF into the Union stopped completely in 2020, allowing the Union industry to start recovering from the injurious effects of the dumped imports from the countries concerned and, as confirmed by the Commission in Commission Implementing Regulation (EU) 2021/1100 concerning imports of HRF originating in Türkiye ⁴⁴, the Union industry had recovered by the end of 2018. However, the recovery of the Union industry’s economic situation came to an abrupt halt and was reversed in 2019, when the Union industry had to compete with significant volumes of low priced dumped imports from Türkiye, forcing it to set its prices below costs to keep its market share and thus causing a material injury to the Union industry ⁴⁵. In July 2021, the Commission imposed definitive measures against Türkiye and thanks to various factors at play, as explained in recital 177, the situation of the Union industry improved and recovered by the end of 2021. As already stated in recital 177, the Union industry was able to continue benefiting from these improving conditions during the review investigation period resulting in a further increase in its profitability.

• (183) More particularly, most injury indicators, notably production, capacity utilisation, sales volume, employment and productivity followed a similar trend during the period considered. This trend was characterised by a sharp decrease in 2020 and a rebound in 2021, which continued throughout the review investigation period to levels similar or slightly higher to those at the beginning of the period considered in 2019. The reason behind this irregular trend lies largely in the coincidence of a considerable influx of low-priced dumped imports of HRF from Türkiye and the unique dynamics created by the Covid-19 pandemic. Lockdowns and interruptions of industrial activity led to extremely low consumption levels and low demand for steel in 2020, whilst steel demand and prices soared in 2021 during the post-Covid recovery leading, amongst others, to high profits for the steel industry in 2021 and the review investigation period.

• (184) Sales prices, profit, cash flow and ROI followed a similar trend characterised as well by a sharp drop in 2020, and a rebound in 2021. However, these indicators increased dramatically during the review investigation period in comparison to 2019, a year in which the Union industry was considered to be injured by imports from Türkiye.

• (185) On the basis of the above, the Commission concluded that the Union industry did not suffer material injury within the meaning of Article 3(5) of the basic Regulation during the review investigation period.

• (186) However, the indicators cannot be analysed without considering the exceptionally favourable steel market conditions of 2021 and the first half of 2022. In 2020, the pandemic-induced slowdown of industrial activity and its consequent decrease of steel demand led to a severe downturn of the performance of the steel industry, and global economy in general. In 2021, driven by a rebound in demand, steel consumption strongly bounced back at increased prices. These favourable market conditions were carried over to the first half of 2022. However, the positive post-Covid trend experienced throughout 2021 came to an end in the second quarter of 2022 due to severe rises in energy costs and high inflation. This means that the favourable circumstances experienced during 2021 and the review investigation period are unlikely to continue. As noticed in previous cases, HRF is a highly price-sensitive commodity, and competition is mainly based on price ⁴⁶. This means that large volumes of dumped imports can lead to Union producers with no choice but to lower their prices in order to keep market share, leading to injury.

6. LIKELIHOOD OF RECURRENCE OF INJURY

• (187) The Commission concluded in recital 185 that the Union industry did not suffer material injury during the review investigation period. On the other hand, as explained in recitals 88 and 117, the Commission concluded that dumping would likely continue in the absence of anti-dumping measures, and, as explained in recital 100, dumping would likely recur in the case of Iran. Therefore, the Commission assessed, in accordance with Article 11(2) of the basic Regulation, whether there would be a likelihood of recurrence of injury originally caused by the dumped imports from the countries concerned if the measures were allowed to lapse.

• (188) In this respect the following elements were analysed by the Commission: (1) the production capacity and spare capacity in the countries concerned and the attractiveness of the Union market, and (2) the likely price level of imports from the countries concerned and their impact on the Union industry.

6.1.   Production capacity and spare capacity in the countries concerned and the attractiveness of the Union market

• (189) As already described in recital 78, both sampled producers in Brazil operated almost at full capacity during the review investigation period. Both producers had increased their sales to the Union during the review investigation period, by increasing their capacity utilisation as compared to previous years, as stated in recital 78. The significant increase in export sales in the review investigation was an indicator that the Union market is still attractive for exporting producers from Brazil, despite of the current measures.

• (190) The sole cooperating producer from Iran was similarly operating at almost full capacity during the review investigation period (recital 91). Hence, its spare capacity was limited. However, upon further investigation, the Commission found that the company was actively planning to increase its HRF steel capacity, that would result in around 1 million tonnes per annum in spare capacity, that could be used for export, including to the Union (recital 95). For the aforementioned reason, the Commission concluded that within the next few years, there will be significant spare capacity in Iran which could be used for exports to the Union. Moreover, export prices to third countries were found to be at least 14 % lower than the Union industry prices during the review investigation period, thus making the Union market more attractive in terms of prices, compared to other possible export destinations.

• (191) As stated in recital 107, the Commission found that Russia had a spare capacity of 3,5 million tonnes in the review investigation period, which is 10 % of the free market consumption in the Union. Hence, it was concluded that Russian producers have sufficient spare capacities, which could be used for exporting HRF at dumped prices to the Union. Moreover, a price comparison between Russian domestic prices and Union industry prices (recital 112) found that Russian domestic prices were on average 17 % lower than the Union industry prices, thus confirming the attractiveness of the Union market for Russian exporting producers.

• (192) The Union market is among the largest markets of certain hot-rolled flat steel products worldwide. In addition, price levels in the Union (the average price charged by the Union industry was EUR/tonne 954 during the review investigation period) are above the average price charged by Brazilian and Iranian exporting producers to the rest of the world, and by Russian producers to the Union. Since, as explained in recital 186 above, HRF is a highly price sensitive commodity product, the Brazilian, Iranian and Russian exporters would have a strong incentive to direct their exports to the Union should the measures lapse.

• (193) In view of the above, it is likely that the exporting producers from the countries concerned would increase their export sales to the Union in case measures would be allowed to lapse.

6.2.   Likely price levels of imports into the Union from the countries concerned and impact on the Union industry

6.2.1.   Brazil

• (194) As stated in recital 133, the Commission could not perform an undercutting calculation for Brazil. Based on Eurostat data, imports price from Brazil were below the Union sales price during the period considered, except for 2021. The sampled exporting producers represented more than 90 % of the exports from Brazil to the European Union (recital 31), but since both sampled exporting producers from Brazil were selling to related parties in the Union, and in the absence of sales to unrelated customers in the Union, the Commission could not affirmatively conclude that the sales price to related were sufficiently reliable to be used as an indication for a likely price absent anti-dumping measures. Therefore, the Commission analysed the current pricing behaviour of Brazilian exporting producers on their third country export markets to assess the likely pricing behaviour on the Union market, should the measures lapse.

• (195) The export price from Brazil to other third country markets was used as a proxy to establish the likely pricing behaviour absent measures. The comparison was made using GTA data for export sales from Brazil to the rest of world, filtering it by the top 10 countries in terms of quantities, which represented around 90 % of sales from Brazil to third countries. The comparison indicated that the export price level to third countries (calculated at around 820 EUR/tonne as landed price free for circulation) was around 13-14 % lower than the current Union industry average sales price on the free market, and also below the non-injurious price established at around 920 EUR/tonne.

• (196) As the above analysis demonstrated that the Brazilian exporting producers were able to sell on third markets at prices below the Union price during the review investigation period, the Commission thus concluded that, should measures be allowed to lapse, the Brazilian exporters would be able to lower their prices to the EU and exercise significant price pressure.

6.2.2.   Iran

• (197) Imports from Iran to the Union virtually disappeared during the period considered. Under these circumstances, the Commission examined the current pricing behaviour of the sole cooperating exporting producer in Iran on its third country export markets to assess the likely price of imports to the Union, should the measures lapse.

• (198) The comparison was made using Iranian export prices to the rest of the world, and it indicated that the likely landed price free for circulation in the Union of Iranian exports of HRF would, absent measures, be not more than 830-840 EUR/tonne.

• (199) The price comparison between the Iranian export price thus determined and the weighted average sales price during the review investigation period of the Union producers, adjusted to an ex-works level, showed that on average, Iranian export prices to the Union would be lower than Union industry’s average prices by around 10-13 %. Prices from Iran would also be below the non-injurious price established in recital 195.

6.2.3.   Russia

• (200) Imports from Russia during the RIP were made at prices below the sales price of the Union industry, at a price of 897 EUR/tonne. As already stated in recital 140, the result of the price comparison between Russian exports to the Union and the Union industry’s average prices showed a price difference of around 5 %. Prices from Russia were also set below the non-injurious price of 920 EUR/tonne.

6.2.4.   Conclusion

• (201) HRF is a highly price sensitive commodity product and as observed in the investigation concerning imports of HRF from China and also in the investigation on the identical product from Türkiye, rather modest levels of price undercutting combined with large volumes are susceptible to have significant and immediate impact on the Union industry’s performance ⁴⁷. In both those investigations, undercutting margins below 5 % forced the Union industry to lower sales prices (or lose market share) to such an extent that it incurred material injury in the short term.

• (202) Given that the Union industry during the review investigation period had just rebounded from a turbulent and economically difficult period, including the Covid-19 pandemic, with accumulated losses, it is still in a fragile situation. It is therefore highly likely that the continuation of dumped imports from Brazil and Russia and recurrence of dumping from Iran in significant volumes and prices below the Union industry prices would have a significant adverse effect on the Union industry’s performance, notably with regard to production, sales volumes and prices, profitability and investment needs, resulting in material injury recurring.

• (203) After disclosure, USIMINAS submitted that the domestic Union industry was not fragile, given that indicators such as profit and return on investment greatly increased during the review investigation period. In addition, both USIMINAS and CSN argued that there could be no likelihood of recurrence of injury, since the profitability of the Union industry increased despite an increase in imports from the countries concerned. It also referred to Brazil’s low import volumes at high prices and the limited spare capacity in Brazil.

• (204) The Commission recalled that, as stated in recital 166, the Union industry was deemed not to be materially injured during the review investigation period. The Commission also acknowledged that the review investigation period was marked by exceptionally favourable market conditions (recital 186) and that, given that the Union industry just rebounded from a turbulent and economically difficult period characterized by accumulated losses, it was still in a fragile situation for the reasons explained in recitals 201 and 202. Furthermore, as explained in section 6.2.1, the Commission had to analyse the current pricing behaviour of Brazilian exporting producers in their third country export markets, which showed that Brazil would be able to exert significant price pressure on the Union industry absent measures. Therefore, the claim was rejected.

7. UNION INTEREST

• (205) In accordance with Article 21 of the basic Regulation, the Commission examined whether maintaining the existing anti-dumping measures would be against the interest of the Union as whole. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, and users.

7.1.   Interest of the Union industry

• (206) The Union industry is located in 15 Member States (Austria, Belgium, Czechia, Finland, France, Germany, Hungary, Italy, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia and Spain). It employs almost 40 000 employees in relation to the product under review.

• (207) In the absence of measures, the Union industry will no longer be protected against the likely increase of dumped imports from Brazil, Iran and Russia, which will cause material injury. The effect of anti-dumping measures will be positive for the Union producers, as measures will help the Union industry to continue its recovery from past dumping. It is therefore clearly in the interest of the Union industry to maintain the measures.

7.1.1.   Interest of users and unrelated importers

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

• (209) Moreover, the Commission analysed whether measures against Brazil, Iran and Russia would have a negative effect on the security of supply, as there are also measures in place on HRF against Türkiye and China. The Union industry level of capacity utilisation was 73 % during the review investigation period, and the total production capacity exceeded the total Union consumption by 18 million tonnes, according to EUROFER’s macro questionnaire data. In addition, despite measures against some of the major exporters of HRF, almost 40 countries exported the product under review to the Union during the review investigation period, thus showing that the imposition of measures would not impinge upon diversification of supply. For these reasons and in the absence of cooperation by users and importers, the Commission concluded that there were no potential risks at the level of supply for downstream users.

• (210) After initiation, USIMINAS claimed that the introduction of the Carbon Border Adjustment Mechanism (CBAM) would impact adversely the access to the Union market given the burdensome reporting obligations and surcharges linked to the CBAM. This claim was reiterated after disclosure. Furthermore, both the GBR and USIMINAS argued that the Union industry was already significantly protected by the safeguards measures. CSN added that because of the steel safeguards, Brazilian HRF import volumes would not increase, and that imports from Brazil could not cause injury, as the residual duty Brazil was subject to was higher than the current ad valorem anti-dumping duty applicable to CSN. Hence, CSN argued that it is unreasonable to deem that injury is likely to recur because of imports from Brazil.

• (211) The Commission recalled that the CBAM only entered into force in October 2023 and that during a transitional period, until 2026, importers will only have to report emissions embedded in their goods without incurring any financial charges. The stated reason for this transitional period is to allow parties time to adjust before the final system is put into place and to reduce the risk of trade disruptions. Accordingly, the Commission considered that it is premature to make any assessment of the potential impact of CBAM on future trade flows of HRF. In addition, the Commission recalled that the safeguard measures cannot be considered of a lasting nature, and that the measure currently in place ⁴⁸ has no impact on the assessment of the likelihood of increased imports in the absence of anti-dumping duties. Considering the temporary nature of the steel safeguards, the Commission hence found that they could not have a bearing on its conclusions in this investigation. Therefore, the Commission rejected both claims.

7.1.2.   Conclusion on Union interest

• (212) On the basis of the above, the Commission concluded that there were no compelling reasons of Union interest against the continuation of the existing measures on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the Federative Republic of Brazil, the Islamic Republic of Iran and the Russian Federation.

8. ANTI-DUMPING MEASURES

• (213) On the basis of the conclusions reached by the Commission on continuation and recurrence of dumping, recurrence of injury and Union interest, the anti-dumping measures on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the Federative Republic of Brazil, Islamic Republic of Iran and the Russian Federation should be maintained.

• (214) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(4) of this regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

• (215) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(4) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (216) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met, an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

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

• (218) A company may request the application of these individual anti-dumping duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission ⁴⁹. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

• (219) An exporter or producer that did not export the product concerned to the Union during the period that was used to set the level of the duty currently applicable to its exports may request the Commission to be made subject to the anti-dumping duty rate for cooperating companies not included in the sample. The Commission should grant such request, provided that three conditions are met. The new exporting producer would have to demonstrate that: (i) it did not export the product concerned to the Union during the period that was used to set the level of the duty applicable to its exports; (ii) it is not related to any exporting producer subject to the anti-dumping duties; and (iii) has exported the product concerned thereafter or has entered into an irrevocable contractual obligation to do so in substantial quantities.

• (220) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ⁵⁰ when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

• (221) By Commission Implementing Regulation (EU) 2019/159 ⁵¹, the Commission imposed a safeguard measure with respect to certain steel products for a period of three years. By Implementing Regulation (EU) 2021/1029, the safeguard measure was prolonged until 30 June 2024. The product under review is one of the product categories covered by the safeguard measure. Consequently, once the tariff quotas established under the safeguard measure are exceeded, both the above-quota tariff duty and the anti-dumping duty would become payable on the same imports. As such cumulation of anti-dumping measures with safeguard measures may lead to an effect on trade greater than desirable, the Commission decided to prevent the concurrent application of the anti-dumping duty with the above-quota tariff duty for the product under review for the duration of the imposition of the safeguard duty.

• (222) This means that where the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 becomes applicable to the product under review and exceeds the equivalent ad valorem level of the anti-dumping duties pursuant to this Regulation, only the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 shall be collected. During the period of concurrent application of the safeguard and anti-dumping duties, the collection of the duties imposed pursuant to this Regulation shall be suspended. Where the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 becomes applicable to the product under review and is set at a level lower than the equivalent ad valorem level of the anti-dumping duties in this Regulation, the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 shall be collected in addition to the difference between that duty and the higher anti-dumping duties imposed pursuant to this Regulation. The part of the amount of anti-dumping duties not collected shall be suspended.

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

HAS ADOPTED THIS REGULATION:

Article 1

The following products are not covered by this review:

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

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

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

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

Country	Company	Definitive duty rate – euro per tonne net	TARIC additional code
Brazil	ArcelorMittal Brasil S.A.	54,5	C210
	Aperam Inox América do Sul S.A.	54,5	C211
	Companhia Siderúrgica Nacional	53,4	C212
	Usinas Siderúrgicas de Minas Gerais S.A. (USIMINAS)	63,0	C213
	Gerdau Açominas S.A.	55,8	C214
Iran	Mobarakeh Steel Company	57,5	C215
Russia	Novolipetsk Steel	53,3	C216
	Public Joint Stock Company Magnitogorsk Iron Steel Works (PJSC MMK)	96,5	C217
	PAO Severstal	17,6	C218

Company	Definitive duty rate – euro per tonne net	TARIC additional code
All other Brazilian companies	63,0	C999
All other Iranian companies	57,5	C999
All other Russian companies	96,5	C999

• (a) it did not export the goods described in Article 1(1) originating in the Federative Republic of Brazil during the period between 1 July 2015 to 30 June 2016 (‘original investigation period’);

• (b) it is not related to any exporting producer subject to the anti-dumping duties imposed by this Regulation; and

• (c) it has either actually exported the product under review originating in the Federative Republic of Brazil or has entered into an irrevocable contractual obligation to export a significant quantity to the Union after the end of the original investigation period.

Article 2

Where the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 becomes applicable to flat-rolled products of iron, non-alloy steel or other alloy steel, whether or not in coils (including ‘cut-to-length’ and ‘narrow strip’ products), not further worked than hot-rolled, not clad, plated or coated and exceeds the equivalent ad valorem level of the anti-dumping duty set out in Article 1(2), only the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 shall be collected.

During the period of application of paragraph 1, the collection of the duties imposed pursuant to this Regulation shall be suspended.

Where the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 becomes applicable to flat-rolled products of iron, non-alloy steel or other alloy steel, whether or not in coils (including ‘cut-to-length’ and ‘narrow strip’ products), not further worked than hot-rolled, not clad, plated or coated and is set at an equivalent ad valorem level lower than the anti-dumping duty set out in Article 1(2), the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159 shall be collected in addition to the difference between that duty and the higher anti-dumping duty set out in Article 1(2).

The part of the amount of anti-dumping duty not collected pursuant to paragraph 3 shall be suspended.

The suspensions referred to in paragraphs 2 and 4 shall be limited in time to the period of application of the above-quota tariff duty referred to in Article 1(6) of Implementing Regulation (EU) 2019/159.

Article 3

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

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

Done at Brussels, 12 December 2023.

For the Commission

The President

Ursula VON DER LEYEN