Commission Implementing Regulation (EU) 2024/209 of 10 January 2024 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of steel bulb flats originating in the People’s Republic of China and Türkiye

• (138) Both the Government of Türkiye and Fincantieri reiterated their claim that the COVID-19 pandemic played an important role in the negative situation of the Union industry, especially with regard to the impact on sales volumes. Since no new elements were brought forward as compared with those addressed in recitals (215) and (216) of the provisional Regulation, the conclusion in those recitals was confirmed.

5.2.4.   Increase in energy prices

• (139) The Government of Türkiye repeated its claim with regard to the influence of increased energy prices on the Union industry’s injurious situation. Since no new arguments were brought forward as compared with those addressed in recitals (217) to (220), the conclusion in those recitals was confirmed.

5.2.5.   Product diversification

• (140) In the absence of any related claim or comment, the conclusions in recitals (221) to (225) of the provisional Regulation were confirmed.

5.3.   Conclusion on causation

• (141) The Commission assessed the impact of other factors taking into account the comments of interested parties and concluded that those factors did not attenuate the causal link. Indeed, factors such as the bankruptcy of Laminorul, the COVID-19 pandemic or any of the other factors put forward by the different parties might have had an impact on the performance of the Union industry. However, these factors did not explain the price suppression suffered by the Union industry during the entire period considered and, in particular, during the investigation period. In a normal competitive environment, the Union industry should be able to increase its sales prices to a profitable level or in the very least to cover their production costs. The effect of the factors discussed above, if any, could not explain the Union industry’s inability to do so.

• (142) Therefore, the Commission confirmed the conclusion in recitals (226) to (228) of the provisional Regulation.

6. LEVEL OF MEASURES

6.1.   Injury margin

• (143) In the absence of any related claim or comment, the conclusions in recitals (229) to (235) of the provisional Regulation were confirmed.

• (144) As provided by Article 9(4), third subparagraph, of the basic Regulation, and given that the Commission did not register imports during the period of pre-disclosure, it analysed the development of import volumes to establish if there had been a further substantial rise in imports subject to the investigation during the period of pre-disclosure described in Section 1.2 of the provisional Regulation and therefore reflect the additional injury resulting from such increase in the determination of the injury margin.

• (145) Based on data from the Surveillance 2 database, import volumes from the PRC and Türkiye during the four weeks period of pre-disclosure were 831,8 % and 13,7 %, respectively, higher than the average import volumes in the investigation period on a four-week basis. On that basis, the Commission concluded that there had been a substantial rise in imports subject to the investigation during the period of pre-disclosure for both countries.

• (146) To reflect the additional injury caused by the increase of imports, the Commission decided to adjust the injury elimination level based on the rise in import volume, which was considered the relevant weighting factor based on the provisions of Article 9(4) of the basic Regulation. It therefore calculated a multiplying factor established by dividing the sum of the volume of imports during the four weeks of the pre-disclosure period of [1 400–1 800] tonnes (for the PRC) and [2 100–2 500] tonnes (for Türkiye) and the 52 weeks of the investigation period by the import volume in the investigation period extrapolated to 56 weeks. The resulting figure, 59,3 % for the PRC and 1 % for Türkiye, reflected the additional injury caused by the further increase of imports. The provisional injury margins were thus multiplied by this factor.

• (147) As described in recitals (92) and (94), the Commission revised the injury margins. Therefore, the final injury elimination level for the cooperating exporting producers and all other companies is as follows:

6.2.   Conclusion on the level of measures

• (148) Following the above assessment, definitive anti-dumping duties should be set as below in accordance with Article 7(2) of the basic Regulation:

7. UNION INTEREST

7.1.   Interest of the Union industry

• (149) In the absence of any related claim or comment, the conclusions in recitals (238) to (241) of the provisional Regulation were confirmed.

7.2.   Interest of users and unrelated importers

• (150) Fincantieri submitted that the fact that the Union industry had spare capacity throughout the period considered did not necessarily show that the Union industry could actually produce more. Fincantieri also complains that the Commission assumed that demand would remain stable while consumption was heavily impacted by the COVID-19 pandemic. In addition, Fincantieri seemed to believe that the Commission alleged in the provisional Regulation that Union producers could produce enough to satisfy the needs of the shipbuilding industry. Similarly, the Government of Türkiye questioned whether the production capacity of the Union industry is sufficient to satisfy domestic consumption.

• (151) The Commission established, based on the verified data of Losal and the available information for Olifer, that there was significant spare capacity. The Union industry was using less than half of its capacity to produce steel bulb flats. From an economic perspective it is illogical to have and maintain the capacity to produce and sell more of a product, but to not actually increase production, unless there was not enough demand for the product. Based on the verified facts it was clear that the Union industry was capable and willing to supply larger volumes of steel bulb flats to their customers.

• (152) However, the Commission never stated that the Union industry was capable of supplying enough steel bulb flats to fully satisfy the needs of the Union’s shipbuilding industry. As was clear from the data shown in Tables 2 and 5 in the provisional Regulation, Union consumption was consistently above Union production capacity throughout the period concerned. Recital (246) of the provisional Regulation also clearly stated that the goal of the anti-dumping measures is not to close the Union market for imports from third countries, but to remove the trade distorting effects of injurious dumping. However, the fact that the Union industry could not meet full Union demand, does not mean that steel bulb flats should be allowed to be imported at dumped prices. This conclusion stands irrespective of the evolution of demand. The Commission therefore rejected these claims.

• (153) Fincantieri also disputed the statement in recitals (249) and (250) of the provisional Regulation that Union producers may re-assess their investment strategies and focus on their other more profitable production lines, since any risk of disappearance of the Union industry is purely hypothetical and not supported by any evidence. However, if an industry is continuously loss-making and there is no possibility of increasing prices to a level that would allow it to cover its costs, let alone achieve a reasonable profit, it is very unlikely that such a situation could continue for a longer period.

• (154) In addition, it is equally unlikely that the imposition of anti-dumping measures on imports from the countries concerned would ‘drastically reduce the pool of available suppliers’ as Fincantieri claimed. As Fincantieri itself mentioned, Union industry capacity is not enough to cover full demand, implying a continued need for a diversified supply of steel bulb flats. It is known that there is only a handful of suppliers of steel bulb flats in the world, mainly the two Union producers, Özkan Demir, and Longteng. An increase in the cost of steel bulb flats will not diminish the need for imports from these suppliers. This is especially so since, as Fincantieri claimed, the demand for steel bulb flats is on an increasing trend. It will also not prevent the Union customers from importing steel bulb flats, albeit at a higher cost. Although after the final disclosure Longteng alleged that the level of anti-dumping duties for China would have a prohibitive effect on the imports from China, no evidence was provided by any interested party that the imposition of anti-dumping duties would be prohibitive to the importation of steel bulb flats from either China or Türkiye. The Commission therefore rejected this claim.

• (155) In this respect, Fincantieri also claimed that imposition of anti-dumping duties would clearly be to the detriment of users, since the impact of the measures are not negligible and shipbuilders are unable to pass the cost increase on to their final customers.

• (156) Fincantieri pointed out that the Fincantieri group recorded a net loss of EUR 323 million in 2022, and that therefore the negative impact of an increase in the cost of steel bulb flats would be significant. However, the questionnaire reply which Fincantieri submitted in this investigation, and which was verified on spot, showed a sizeable profit of [8–10 %] both in 2021 and during the investigation period for both the company Fincantieri S.p.A., and for the products incorporating steel bulb flats. Fincantieri’s financial accounts for 2022 ¹⁵ showed that the Fincantieri group was still profitable in 2021. To a large extent, the significant losses in 2022 seemed to be related to extraordinary and non-recurring income and expenses that were not related to the product under investigation, such as impairment losses, other intangible assets and litigation.

• (157) After the final disclosure Fincantieri argued that it was irrelevant for the Union injury assessment whether such losses were related to the product under investigation. However, even if that argument were accepted, it did not detract from the fact that the losses referred to by Fincantieri related to the Fincantieri group, and not to the verified company Italian Fincantieri S.p.A. The Fincantieri group included a number of non-Union entities, among which shipyards, docks and subsidiaries in Asia, Oceania and the Americas. To take the group results as an indication for the Union entities’ financial viability would be imprecise and incorrect at the very least.

• (158) In addition, Fincantieri stated in its comments that ‘the Commission does not prove that the losses in 2022 were related to “extraordinary and non-recurring income”’. However, the 2022 financial accounts for the Fincantieri group itself mention the following: ‘the net result was affected by charges deemed extraordinary for disputes related to asbestos exposure in previous financial years (euro 52 million), impairment of intangible assets (euro 164 million), probable risks related to the non-performance of obligations for offset agreements (euro 20 million) and other charges (euro 2 million)’ ¹⁶. The financial accounts for the Fincantieri Group for the first half of 2023 ¹⁷ also showed that these costs indeed for a large part no longer played a role, and the Fincantieri Group had reduced its losses to 22 million at the end of June 2023. Also, the outlook was positive given the post-COVID recovery of the cruise sector, and increased investments in both the area of defence due to the global-political situation and in the area of off-shore wind energy production.

• (159) Moreover, the additional cost of the anti-dumping duties mentioned by Fincantieri would be only a very small part of the overall costs of the company. As mentioned in recital (248) of the provisional Regulation, the cost of steel bulb flats accounted for a negligible part (less than 0,5 %) of Fincantieri’s overall cost of production for products that incorporate steel bulb flats. It could not reasonably be argued that an increase in the costs of such a small part of the overall cost of production would be to the detriment of users.

• (160) Fincantieri claimed that it cannot pass on any cost increases to its final customers, since there is no possibility to renegotiate or adjust the contractual terms once the contract has been concluded with the shipowner. However, as mentioned in recital (156), it was clear from the company’s questionnaire reply that it remained profitable despite the increase in the cost of raw materials and in energy over the past years. Whether or not the user can pass on any price increase to their customers due to the imposition of anti-dumping duties is therefore not relevant for the question whether Fincantieri can absorb the price increase. In addition, there was no evidence showing that the increased cost could not be passed on to the shipbuilders’ customers for future contracts. No new elements were brought forward by Fincantieri on this issue in its comments on the final disclosure. The Commission therefore rejected these claims.

7.3.   Conclusion on Union interest

• (161) Considering the above, the Commission confirmed the conclusion in recital (253) of the provisional Regulation that there were no compelling reasons that it was not in the Union interest to impose measures on imports of steel bulb flats originating in the countries concerned.

8. DEFINITIVE ANTI-DUMPING MEASURES

8.1.   Definitive measures

• (162) In view of the conclusions reached with regard to dumping, injury, causation, level of measures and Union interest, and in accordance with Article 9(4) of the basic Regulation, definitive anti-dumping measures should be imposed in order to prevent further injury being caused to the Union industry by the dumped imports of the product concerned.

• (163) On the basis of the above, the definitive anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

• (164) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation in respect to these companies. These duty rates are thus exclusively applicable to imports of the product under investigation originating in the country concerned and produced by the named legal entities. Imports of the product concerned manufactured by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, cannot benefit from these rates and should be subject to the duty rate applicable to ‘all other companies’.

• (165) 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 ¹⁸. 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.

• (166) As explained in recitals (95) to (97), steel bulb flats fall in a category of steel products subject to a safeguard measure ¹⁹. Consequently, once the tariff quotas established under the safeguard measure are exceeded, 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 concerned for the duration of the imposition of the safeguard duty.

• (167) This means that where the above-quota tariff duty referred to in Article 1(6) of Commission Implementing Regulation (EU) 2019/159 ²⁰ becomes applicable to the product concerned and exceeds the level of the anti-dumping duty pursuant to this Regulation, only the above-quota tariff duty referred to in that Article shall be collected. During the period of concurrent application of the safeguard and anti-dumping duty, the collection of the duties imposed pursuant to this Regulation shall be suspended.

8.2.   Definitive collection of the provisional duties

• (168) In view of the dumping margins found and given the level of the injury caused to the Union industry, the amounts secured by way of provisional anti-dumping duties imposed by the provisional Regulation, should be definitively collected up to the levels established under the present Regulation.

9. FINAL PROVISION

• (169) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ²¹, 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.

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

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

Article 3

The amounts secured by way of the provisional anti-dumping duty under Implementing Regulation (EU) 2023/1444 shall be definitively collected.

Article 4

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, 10 January 2024.

For the Commission

The President

Ursula VON DER LEYEN

https://www.fincantieri.com/globalassets/investor-relations/bilanci-e-relazioni/2022/eng_fincantieri_annual_report_2022.pdf.

ELI: http://data.europa.eu/eli/reg_impl/2024/209/oj

ISSN 1977-0677 (electronic edition)