Commission Implementing Regulation (EU) 2024/819 of 8 March 2024 imposing a definitive anti-dumping duty on imports of certain corrosion resistant steels originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

Image omitted; see official source	Official Journal of the European Union	EN Series L
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	2024/819	11.3.2024

THE EUROPEAN COMMISSION,

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

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

Whereas:

1. PROCEDURE

1.1.   Previous investigations and measures in force

• (1) By Implementing Regulation (EU) 2018/186 ², the European Commission imposed anti-dumping duties on imports of certain corrosion resistant steels, originating in the People’s Republic of China (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

• (2) The anti-dumping duties were extended to imports of slightly modified certain corrosion resistant steels consigned from the People’s Republic of China (‘China’, ‘the PRC’ or ‘the country concerned’) by Commission Implementing Regulation (EU) 2020/1156 ³, as last amended by Commission Implementing Regulation (EU) 2020/1994 ⁴. The extension does not apply to imports of certain corrosion resistant steels produced by the Chinese exporting producers Beijing Shougang Cold Rolling Co., Ltd and Shougang Jingtang United Iron and Steel Co., Ltd.

• (3) The anti-dumping duties currently in force are at rates ranging between 17,2 % and 27,9 % on imports from the sampled exporting producers, 26,1 % on imports from the non-sampled cooperating companies and a duty rate of 27,9 % on imports from all other companies in the PRC.

1.2.   Request for an expiry review

• (4) Following the publication of a notice of impending expiry ⁵, the European Commission (‘the Commission’) received a request for a review pursuant to Article 11(2) of the basic Regulation.

• (5) The request for review was submitted on 8 November 2022 by the European Steel Association Eurofer (‘the applicant’) on behalf of the Union industry of certain corrosion resistant steels 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 of dumping and recurrence of injury to the Union industry.

1.3.   Initiation of an expiry review

• (6) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 8 February 2023 the Commission initiated an expiry review with regard to imports into the Union of certain corrosion resistant steels originating in the PRC 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’).

1.4.   Review investigation period and period considered

• (7) The investigation of continuation or recurrence of dumping covered the period from 1 January 2022 to 31 December 2022 (‘review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2019 to the end of the review investigation period (‘the period considered’).

1.5.   Interested parties

• (8) 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, other known Union producers, the known producers in the PRC, the PRC authorities, known importers and users, as well as associations known to be concerned about the initiation of the expiry and invited them to participate.

• (9) 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. None of the interested parties requested a hearing.

1.6.   Sampling

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

1.7.   Sampling of Union producers

• (11) 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 production and Union sales volumes reported by the Union producers in the context of the pre-initiation standing assessment analysis, taking also into account their geographical location. This provisional sample consisted of three Union producers, located in three different Member States. The sample accounted for almost 32 % of the estimated total volume of production of the like product in the Union and more than 37 % of the estimated total volume of sales of the like product on the free market in the Union ⁷. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No parties made any comments within the given deadline.

• (12) By note to the file of 3 April 2023, the Commission informed interested parties about its decision not to alter the composition of the definitive sample of Union producers even though a preliminary examination of the questionnaire replies by the three sampled Union producers had suggested that the definitive sample accounted rather for around 29 % of the estimated total volume of production of the like product in the Union and 26 % of the estimated total volume of sales of the like product in the Union. The Commission invited interested parties to comment on the update. No parties made any comments within the given deadline.

• (13) The verification at ArcelorMittal Bremen GmbH’s premises revealed a misconception of the product under review at ArcelorMittal group’s level. For ArcelorMittal Bremen GmbH, the misreporting entailed that the actual quantities produced and sold were lower than those reported in the questionnaire reply, to the extent that the entity did not qualify to be part of the sample anymore. The Commission decided to replace the company concerned by another producer from the same group. The final sample thus established consisted of three Union producers, located in three different Member States, which eventually accounted for 29 % of the total volume of production of the like product in the Union and 33 % of the total volume of sales of the like product in the free market in the Union. The Commission invited interested parties to comment on the final sample. No parties made any comments within the given deadline.

1.7.1.   Sampling of importers

• (14) 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.

• (15) No unrelated importers provided the requested information. The Commission decided that sampling was not necessary. No comments were received to this decision.

1.7.2.   Sampling of exporting producers in the PRC

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

• (17) No exporting producers from the PRC provided the requested information within the deadline and/or agreed to be included in the sample. Therefore, as explained in recital 31 below, the Commission informed the authorities of the PRC and interested parties that due to the absence of sufficient cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC.

1.8.   Replies to the questionnaire

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

• (19) The Commission sent a questionnaire to the applicant and requested sampled Union producers to fill in a questionnaire available online. The questionnaires for Union producers, for unrelated importers and for Chinese exporting producers were made available on DG Trade’s website ⁸ on the day of initiation.

• (20) Questionnaire replies were received from the sampled Union producers and the applicant.

1.9.   Verification

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

• — Union producers

• — ArcelorMittal Bremen GmbH, Bremen, Germany

• — ArcelorMittal France S.A., site: Dunkerque, France

• — Marcegaglia Carbon Steel S.p.A, Gazoldo degli Ippoliti and Ravenna, Italy

• — Voestalpine Stahl GmbH, Linz, Austria

• — Union producers’ association:

• — Eurofer, Brussels, Belgium

1.10.   Subsequent procedure

• (22) On 14 December 2023, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure and request a hearing.

• (23) The applicant welcomed the findings and the conclusion disclosed by the Commission. No other party made any comments.

2. PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under review

• (24) The product under review is the same as in the original investigation, namely flat-rolled products of iron or alloy steel or non-alloy steel; aluminium killed; plated or coated by hot dip galvanisation with zinc and/or with aluminium, and no other metal; chemically passivated; containing by weight: 0,015 % or more but not more than 0,170 % of carbon, 0,015 % or more but not more than 0,100 % of aluminium, not more than 0,045 % of niobium, not more than 0,010 % of titanium and not more than 0,010 % of vanadium; presented in coils, cut-to-length sheets and narrow strips.

• (25) The following products are excluded:

• — of stainless steel, of silicon-electrical steel, and of high-speed steel,

• — not further worked than hot-rolled or cold-rolled (cold-reduced).

• (26) The product under review is currently falling under CN codes ex 7210 41 00, ex 7210 49 00, ex 7210 61 00, ex 7210 69 00, ex 7212 30 00, ex 7212 50 61, ex 7212 50 69, ex 7225 92 00, ex 7225 99 00, ex 7226 99 30 and ex 7226 99 70 (TARIC codes 7210410020, 7210490020, 7210610020, 7210690020, 7212300020, 7212506120, 7212506920, 7225920020, 7225990022, 7225990092, 7226993010, 7226997094).

2.2.   Product concerned

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

2.3.   Like product

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

• — the product concerned when exported to the Union;

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

• — the product concerned produced and sold by the exporting producers to the rest of the world; and the product under review produced and sold in the Union by the Union industry.

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

3. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING

3.1.   Preliminary remarks

• (30) During the review investigation period, imports of certain corrosion resistant steels (CRS) from the PRC virtually disappeared from the Union market. According to Eurostat, imports of CRS from the PRC amounted to 953 tonnes in the review investigation period compared to 1 857 490 tonnes in the original investigation. There was an increase in imports in 2021 but this can be attributed to market turmoil due to the effects of the COVID pandemic.

• (31) As mentioned in recital 17, no exporting producers from the PRC cooperated in the investigation. Therefore, the Commission informed the authorities of the PRC that, due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC. No reply was received and therefore the Commission decided to apply Article 18.

• (32) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the likelihood of continuation or recurrence of dumping were based on facts available, in particular information provided in the request for review, publicly available data from Mexican CRS producers, Global Trade Atlas, Energy Regulatory Commission, information published by the Government of Mexico, Global Petrol Prices and International Labour Organization.

3.2.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation for the imports of CRS originating in the PRC

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

• (34) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union.

• (35) No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline.

• (36) Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC. No comments were raised by the GOC in this regard.

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

• (38) On 27 June 2023, the Commission issued a Note for the file on the sources for the determination of the normal value (‘Note on sources’). The Note on sources was updated on 6 July 2023 and interested parties were given adequate time to comment.

• (39) By the Note on sources, the Commission also informed interested parties that it intended to use Mexico as representative country and on the relevant sources it intended to use for the determination of the normal value.

• (40) In the Note on sources, the Commission informed interested parties that, given the absence of cooperation it would base other direct costs and manufacturing overheads on the information regarding the Union industry provided in the expiry review request and additional information received from the applicant and express them as percentages.

• (41) It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on publicly available information for one Mexican producer, Ternium S.A.

• (42) Finally, by the Note on sources, the Commission invited interested parties to comment on the sources and the appropriateness of Mexico as a representative country and to suggest other countries, provided they submitted sufficient information on the relevant criteria. No comments were received.

• (43) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

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

• (45) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

3.3.   Existence of significant distortions

• (46) In recent investigations concerning the steel sector in the PRC ⁹, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

• (47) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles ¹⁰. In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation ¹¹, but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation ¹². The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces ¹³. Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC ¹⁴. In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation ¹⁵, as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC ¹⁶.

• (48) Like in previous investigations concerning the steel sector in the PRC, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, as well as the evidence contained in the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the Purposes of Trade Defence Investigations ¹⁷ (‘Report’), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC as also found by its previous investigations in this respect.

• (49) The request alleged that the Chinese economy as a whole is widely influenced and affected by substantial governmental interventions, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation. To support its position, the request referred to the Report, to Chinese legislation, to further reports, as well as to additional anecdotal evidence of distortions implemented during the review investigation period.

• (50) More specifically, the request pointed out that against the background of the ‘socialist market economy’ doctrine enshrined in the PRC Constitution, the omnipresence of the Chinese Communist Party (‘CCP’) and the government influence over the economy by means of strategic planning initiatives, the GOC’s interventionism takes various forms, namely administrative, financial and regulatory.

• (51) The request provided examples of elements pointing to existence of distortions, as listed in the first to sixth dash of Article 2(6a)(b) of the basic Regulation. In particular, the applicant submitted that:

• (52) The Chinese State does not only actively formulate and oversee the implementation of general economic policies by individual State-owned enterprises (‘SOEs’), but it also claims its rights to participate in operational decision-making in SOEs. This is typically done through the rotation of cadres between government authorities and SOEs, through presence of party members in SOEs executive bodies and of party cells in companies, as well as by shaping the corporate structure of the SOE sector. In exchange, SOEs enjoy a particular status within the Chinese economy. This status entails a number of economic benefits, in particular the shielding from competition and the preferential access to relevant inputs, including financing. Higher leverage and labour productivity conduct to a surge in SOE debt, triggered by falling interest costs. This illustrates how easy monetary conditions can lead to a rapid SOE debt accumulation ¹⁸. This control and policy supervision is particularly pressing in the steel sector – hot-rolled flat steel being by far the biggest input in the production of CRS – where a substantial degree of ownership by the Chinese Government persists and where the GOC aims to consolidate 60 % of the iron and steel production to around ten large-scale enterprises by 2025.

• (53) The State is in the position to interfere with prices and costs through State presence in firms, in particular through the CCP cells in enterprises, state-owned and private alike, including with respect to the producers of CRS and the suppliers of their inputs. The public documents of the State-owned producers sometimes stress the connection with the Chinese State, such as a 2021 press release of China Baowu, which stated that it had conscientiously studied and implemented the spirit of the two sessions of the National People’s Congress, based on the new development stage and deeply promoted the tasks of China Baowu’s 14^th five-year strategic planning. Finally, the State’s presence and intervention in financial markets as well as in the provision of raw materials and inputs have an additional distorting effect on the market.

• (54) The GOC has measures in place to induce operators to comply with the public policy objectives of supporting particular industries, including the production of CRS and the sourcing of raw materials used for producing it. Such measures impede market forces from operating normally. Examples of such measures entail numerous plans, directives and other documents focusing on steel, which are issued at national, regional and municipal level. For example, in March 2022 the Ministry of Industry and Information Technology (‘MIIT’), the National Development and Reform Commission (‘NDRC’) and the Ministry of Ecology and Environment issued a guideline on promoting the high-quality development of the iron and steel industry, calling, inter alia, for stable supply of resources, advanced technical equipment, high quality products and outstanding brands, high level of intelligentization and strong global competitiveness by 2025. Other examples are the national 13^th and 14^th FYPs; the 2021 development plan released by the Ministry of Industry and Information Technology that calls for reducing energy consumption in the steel industry; or the 2020 Catalogue for Guiding Industry Restructuring (2019 version) released by the NDRC. Further, the Chinese hot-rolled flat products benefit from a number of subsidy programs and the GOC further guides the development of the sector in accordance with a broad range of policy tools and directives related, inter alia, to market composition and restructuring, raw materials, investment, capacity elimination, product range, relocation, upgrading, VAT refunds, etc.

• (55) The Chinese bankruptcy system appears to be inadequate to deliver on its own main objectives such as to settle claims and debts fairly and to safeguard the lawful rights and interests of creditors and debtors. Moreover, the State plays a strong and active role in the insolvency proceedings, often having direct influence on their outcome. In addition, the shortcomings of the system of property rights are particularly obvious in relation to ownership of land and land-use rights in China, with all land owned by the State, its allocation remaining solely dependent on the State and authorities often pursuing political goals including the implementation of the economic plans when allocating land.

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

• (57) On the level of allocation of financial resources, the financial system in the PRC is dominated by the State-owned commercial banks. Those banks, when setting up and implementing their lending policy need to align themselves with the government’s industrial policy objectives rather than primarily assessing the economic merits of a given project. Furthermore, bond and credit ratings are often distorted for a variety of reasons, including the fact that the risk assessment is influenced by the firm’s strategic importance to the GOC and the strength of any implicit guarantee by the government. Moreover, borrowing costs have been kept artificially low to stimulate investment growth, which has led to the excessive use of capital investment with ever-lower returns on investment and no signs of credit tightening.

• (58) The request further emphasized the systematic nature of the distortions. As a consequence, not only can the domestic sales prices of CRS not be used, but all the input costs (including hot-rolled flat products (‘HRFS’) and the underlying raw materials such as: iron ore which constitutes about 30 % of the direct cost for CRS; coal which constitutes about 14 % of the direct cost for CRS; scrap, ferroalloys and zinc which together constitute about 34 % of the direct cost for CRS; energy which constitutes about 13 % of the direct cost for CRS; land, financing, labour, etc.) are also tainted because their price formation is affected by substantial government intervention.

• (59) With respect to HRFS as a CRS input, the request referred to a wide range of subsidies which the Chinese HRFS producers keep receiving. While some of those were countervailed by the Commission ¹⁹, the GOC has continued to award subsidies to the HRFS industry in several forms, such as cash grants, control of raw material prices, preferential loans, land use subsidies, lax enforcement of environmental regulation, government mandated mergers and acquisitions, and equity infusions and conversions. The request provided specific examples concerning the producers Chongqing Iron & Steel Company Ltd., Maanshan Iron & Steel Company Limited, as well as Angang Steel Company.

• (60) With respect to iron ore, coke and other upstream CRS inputs, the request pointed out that besides more evident subsidization methods such as cash grants, another strategy of the GOC to indirectly subsidize HRFS producers is by controlling raw materials prices, not least through restrictions on export volumes and an export licencing regime for coal. With respect to iron ore, the request refers to various forms of export restrictions in place in China, warning at the same time that available official sources are likely lacking comprehensiveness in relation to the Chinese measures. The request recalls in this respect that the GOC employs significant efforts to control the prices of HRFS raw materials: in June 2021, the pricing department of the NDRC and the State Administrator for Market Regulation launched a probe into spot iron ore trading and an investigation into coal prices has also been launched with teams sent to various Chinese provinces and cities to investigate commodity prices and supplies. The GOC has been very much involved in trying to control prices of commodities, from coal to copper. As prices have risen significantly, regulators aim to intervene to ensure supply and stability of prices. Moreover, in July 2022, the Chinese authorities established a new State-owned and centrally administered iron ore conglomerate, the China Mineral Resources Group with the explicit aim to act as a centralized purchasing platform for some State-owned steelmakers and traders to unify negotiations with suppliers, as well as to increase the State’s control over upstream raw material supplies and to strengthen the domestic steel industry’s bargaining power in the international iron ore market.

• (61) In conclusion, the request took the position that prices or costs, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation. On that basis, according to the request, it is not appropriate to use domestic prices and costs to establish normal value in this case.

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

• (63) Specifically in the sector of the product under review, i.e. the steel sector, a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation. Since there was no cooperation from Chinese exporters of the product under review, the exact ratio of the private and state-owned producers could not be determined. However, the investigation confirmed that several producers of the product under review are directly controlled by the State. Examples entail the Baowu Steel Group – which is an SOE under the central SASAC ²⁰ – and its subsidiaries Chongqing Iron & Steel Company Ltd. ²¹ and Maanshan Iron & Steel Company Limited ²²; the Baotou Steel Group – an SOE held by the Inner Mongolian Government ²³, the Angang Steel Group – an SOE under the central SASAC ²⁴, as well as the Shougang Group – an SOE 100 % held by the Beijing State-Owned Asset Management Ltd. ²⁵.

• (64) Both public and privately owned enterprises in the steel sector are subject to policy supervision and guidance. The latest Chinese policy documents concerning the steel sector confirm the continued importance which the GOC attributes to the sector, including the intention to intervene in the sector in order to shape it in line with the government policies. This is exemplified by the MIIT Guiding Opinion on Fostering a High Quality Development of Steel Industry which calls for further consolidation of the industrial foundation and significant improvement in the modernization level of the industrial chain ²⁶, by the 14^th FYP on Developing the Raw Material Industry according to which the sector will ‘adhere to the combination of market leadership and government promotion’ and will ‘cultivate a group of leading companies with ecological leadership and core competitiveness’ ²⁷, by the 14^th FYP on Developing Scrap Steel Industry whose key objectives is to ‘continuously increase the application ratio of scrap steel, and by the end of the 14^th FYP, the comprehensive scrap ratio of national steel making will reach 30 %’ ²⁸, or by the 2023 Work Plan on the Stable Growth of the Steel Industry ²⁹ which sets the following objectives: ‘In 2023, […]the investment in fixed assets in the entire industry shall maintain a steady growth, and the economic benefits shall be significantly improved; the industry’s R & D investment shall eventually reach 1,5 %; the industry’s added value growth shall reach about 3,5 %; in 2024, the industry development environment and industry structure shall be further optimized, the move towards high-end, intelligent, and green products shall continue, and the industry added value growth shall exceed 4 %’, which calls for collaboration to ‘to guide China’s steel products, equipment, technology, services, etc. to ‘‘go global’’ in a coordinated manner, promote green and low-carbon cooperation in the global steel industry, and improve the resilience and safety level of global industrial and supply chains [and to] implement supply capacity improvement actions to ensure the stable and efficient operation of the industry’ and which foresees government mandated corporate consolidation of the steel sector: ‘[e]ncourage industry-leading enterprises to implement mergers and acquisitions, build world-class super-large iron and steel enterprise groups, and foster the optimal layout of national iron and steel production capacity, support specialized enterprises with leading power in particular steel market segments to further integrate resources and create a steel industry ecosystem, encourage iron and steel enterprises to carry out cross-regional […] mergers and reorganizations […], consider giving greater policy support for capacity replacement to iron and steel enterprises that have completed substantive mergers and reorganizations’.

• (65) Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the sector can be seen at the provincial level, such as in Hebei which plans to ‘steadily implement the group development of organizations, accelerate the reform of mixed ownership of state-owned enterprises, focus on promoting the cross-regional merger and reorganization of private iron and steel enterprises, and strive to establish 1-2 world-class large groups, 3-5 large groups with domestic influence as the support’ and to ‘further expand the recycling and circulation channels of scrap steel, strengthen the screening and classification of scrap steel.’ ³⁰. Moreover, Hebei’s plan in the steel sector states: ‘Adhere to structural adjustment and highlight product diversification. Unswervingly promote the structural adjustment and layout optimization of the iron and steel industry, promote the consolidation, reorganization, transformation and upgrading of enterprises, and comprehensively promote the development of the iron and steel industry in the direction of large-scale enterprises, modernization of technical equipment, diversification of production processes, and diversification of downstream products’.

• (66) Similarly, the Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14^th FYP foresees the ‘construction of characteristic steel production bases […], build 6 characteristic steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhouou, etc., and improve the scale, intensification and specialization of the industry. Among them, by 2025, the production capacity of pig iron in Anyang will be controlled within 14 million tons, and the production capacity of crude steel will be controlled within 15 million tons.’ ³¹.

• (67) Further industrial policy objectives can also be seen in the planning documents of other provinces, such as Jiangsu ³², Shandong ³³, Shanxi ³⁴, Liaoning Dalian ³⁵ or Zhejiang ³⁶.

• (68) As to the GOC being in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation, due to the lack of cooperation from the side of the exporting producers, it was impossible to systematically establish existence of personal connections between producers of the product under review and the CCP. However, there are some specific examples available concerning the product under review. Moreover, given that the product under review represents a subsector of the steel sector, information available with respect to steel producers is relevant also to the product under review.

• (69) For instance, the chairman of the Board of Directors of the Baotou Steel Union, belonging to the Baotou Steel Group serves also as the company’s Party secretary, with the chairman of the company’s trade union being the deputy Party secretary. ³⁷ In the same vein, within the Shougang Group, the chairman of the Board of Directors serves as the Party Committee secretary while the Deputy Executive Manager is a member of the Party Committee ³⁸.

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

• (71) The steel industry keeps being regarded as a key industry by the GOC ³⁹. This is confirmed in the numerous plans, directives and other documents focused on steel, which are issued at national, regional and municipal level. Under the 14^th FYP, the GOC earmarked the steel industry for transformation and upgrade, as well as optimization and structural adjustment ⁴⁰. Similarly, the 14^th FYP on Developing the Raw Materials Industry, applicable also to the steel industry, lists the sector as the ‘bedrock of the real economy’ and ‘a key field that shapes China’s international competitive edge’ and sets a number of objectives and working methods which would drive the development of the steel sector in the time period 2021-2025, such a technological upgrade, improving the structure of the sector (not least by means of further corporate concentrations) or digital transformation ⁴¹. Moreover, the abovementioned (see recital 64 Work Plan on the Stable Growth of the Steel Industry demonstrates how the focus of the Chinese authorities on the steel sector is put into the wider context of the GOC steering the Chinese economy: ‘[s]upport steel companies to closely follow the needs of new infrastructure, new urbanization, rural revitalization, and emerging industries, dock with major engineering projects related to the ‘‘14th Five-Year Plan’’ in various regions, and make every effort to ensure steel supply. Establish and deepen upstream and downstream cooperation mechanisms between steel and key steel-using sectors such as shipbuilding, transportation, construction, energy, automobiles, home appliances, agricultural machinery, and heavy equipment, carry out production-demand docking activities, and actively expand steel application fields’ ⁴².

• (72) In addition, with respect to iron ore – an important raw material used for the production of the product under review – according to the 14^th FYP on Developing the Raw Materials Industry, the State plans to ‘rationally develop domestic mineral resources. Strengthen the exploration of iron ore […], implement preferential tax policies, encourage the adoption of advanced technology and equipment to reduce the generation of mining solid waste’ ⁴³. In provinces, such as Hebei, the authorities foresee the following for the sector: ‘new project investment discount subsidy; explore and guide financial institutions to provide low-interest loans for iron and steel enterprises to switch to new industries, and at the same time, the government will provide discount subsidies’ ⁴⁴. In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of the main raw materials used in the manufacturing of the product under review. Such measures impede market forces from operating freely.

• (73) The product under review is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation, as also referred to above in recital 47. Those distortions affect the sector both directly (when producing the product under review or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in the PRC) ⁴⁵.

• (74) Moreover, no evidence was submitted in the present investigation demonstrating that the sector of the product under review is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, as also referred to above in recital 47. The abovementioned (see recital 64) Work Plan on the Stable Growth exemplifies also this type of government intervention very well: ‘Encourage financial institutions to actively provide financial services to steel companies that implement mergers and reorganizations, layout adjustments, transformation and upgrading, in accordance with the principles of risk control and business sustainability.’. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (75) Finally, the Commission recalls that, in order to produce the product under review, a number of inputs is needed. When the producers of the product under review purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

• (76) As a consequence, not only the domestic sales prices of the product under review are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout the PRC. This means, for instance, that an input that in itself was produced in the PRC by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth.

• (77) In sum, the evidence available showed that prices or costs of the product under review, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation, as shown by the actual or potential impact of one or more of the relevant elements listed therein.

• (78) On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish the normal value in this case.

• (79) Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as described in the following sections.

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

3.4.   Representative country

• (81) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:

• — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank ⁴⁶;

• — Production of the product under review in that country ⁴⁷;

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

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

• (82) As explained in recital 36, the Commission issued a Note on sources that described the facts and evidence underlying the relevant criteria, and informed interested parties of its intention to use Mexico as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation was confirmed.

• (83) In the Note on sources, the Commission explained that, due to the absence of cooperation, it would need to rely on facts available according to Article 18 of the basic Regulation. The choice of representative country was based on the information contained in the expiry review request, combined with other sources of information deemed appropriate according to the relevant criteria laid down in Article 2(6a) of the basic Regulation in accordance with Article 18(5) of the basic Regulation, including the World Bank ‘Doing Business’ ⁴⁸, Global Trade Atlas (‘GTA’) ⁴⁹, Energy Regulatory Commission of the Government of Mexico ⁵⁰, Global Petrol Prices ⁵¹ and International Labour Organization ⁵².

• (84) Regarding the level of economic development, in the expiry review request, the applicant examined Mexico as a potential representative country that had a similar level of economic development to the PRC ⁵³.

• (85) Regarding production of the product under review, according to the expiry review request ⁵⁴ there are several CRS producers in Mexico. The applicant identified 8 companies that produced CRS with a production capacity of approximately 4 million tonnes. The Commission also identified Türkiye, India and Viet Nam as producers of the product under review. However, India and Viet Nam do not fulfill the criteria of having a level of economic development similar to that of the PRC.

• (86) Regarding the availability of relevant public data in the representative country, according to the request, data on important factors of production, import statistics and energy prices was readily available with regard to Mexico.

• (87) As explained in the Note on sources, the Commission found one company in Mexico, ‘Ternium’ which had publicly available financial data for the period concerned and were profitable in that period ⁵⁵.

• (88) Having established Mexico as an appropriate representative country based on all of the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.

• (89) In the Note on sources, interested parties were invited to comment on the appropriateness of Mexico as a representative country and also suggest other countries, provided they submitted sufficient information on the relevant criteria. No comments were received.

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

3.5.   Sources used to establish undistorted costs

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

• (92) The Commission also stated in the Note on sources that, in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use GTA to establish the undistorted cost of the factors of production, notably the raw materials.

• (93) In addition, the Commission stated that it would use the data from the Energy Regulatory Commission of the Government of Mexico, data from Global Petrol Prices and the International Labour Organisation for establishing undistorted costs of gas, electricity and labour, respectively.

• (94) The Commission informed interested parties that, due to the non-cooperation of the Chinese exporters, it would include a value for manufacturing overhead costs in order to cover costs not included in the factors of production referred to above. The Commission established the ratio of manufacturing overheads to manufacturing costs based on the information provided in the request for review ⁵⁶.

• (95) Finally, the Commission stated that to establish SG&A and profit, it would use the financial data from the Mexican producer of the product under review as set out in recital 79 above.

• (96) The Commission did not receive any comments from interested parties concerning the list of factors of production in the Note on sources.

3.6.   Undistorted costs and benchmarks

3.6.1.   Factors of production

• (97) Considering all the information in the expiry review request and subsequent information submitted by the applicant and in the absence of cooperation by Chinese exporting producers or comments on the Note on sources, the following factors of production and their sources have been identified in order to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of certain corrosion resistant steels

Factors of Production	Commodity codes of Mexico	Source of data	Unit of measurement	Applicable unit cost in CNY
Raw Materials	Raw Materials	Raw Materials	Raw Materials	Raw Materials
Zinc – not alloyed & waste scrap	7901 11 01 7902 00 01	GTA57	Tonnes	27 184,16
Iron Ore, Non-agglomerated	2601 11 01	GTA	Tonnes	924,29
Bituminous coal, whether or not pulverised	2701 12 01	GTA	Tonnes	1 772,34
Steel Scrap	7204 41 01	GTA	Tonnes	3 686,86
Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated	2704 00 01	GTA	Tonnes	3 804,46
Ferro-silicon, ferro-chromium, ferro-titanium	7202 21 01 7202 41 01 7202 91 01	GTA	Tonnes	21 393,32
By-product/waste	By-product/waste	By-product/waste	By-product/waste	By-product/waste
Turnings, shavings, chips, milling waste, sawdust, filings, trimmings and stampings of iron or steel, whether or not in bundles (excl. those of cast iron, alloy steel or tinned iron or steel)	7204 41	GTA	Tonnes	3 686,86
Energy/Utilities	Energy/Utilities	Energy/Utilities	Energy/Utilities	Energy/Utilities
Natural Gas	n/a	Energy Regulatory Commission, Gov. of Mexico58	Gigajoule (GJ)	40,85
Energy – Electricity	n/a	Global Petrol Prices59	kWh	1,19
All other raw materials, packaging, consumables	n/a		Fixed amount	% of direct costs
Labour	Labour	Labour	Labour	Labour
Direct labour	n/a	ILO	Hours	15,87

3.6.2.   Raw materials

• (98) In order to establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA to which import duties and transport costs were added. An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding the PRC and countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the Council ⁶⁰.

• (99) The Commission decided to exclude imports from the PRC into the representative country as it concluded in section 3.3 that it is not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices. After excluding imports from the PRC and non-WTO countries into the representative country, the volume of imports from other third countries remained representative.

• (100) In order to establish the undistorted price of raw materials, delivered at the gate of the producers factory, the Commission applied the import duty of the representative country, at the respective levels, depending on the country of origin of the imported volume. The Commission added domestic transport cost in Mexico on the basis of the World Bank Doing Business Report ⁶¹.

3.6.3.   By-products

• (101) According to the information in the request for review ⁶², only one by-product, steel scrap, is obtained in the production of CRS. To establish its undistorted price, the Commission also added internal transport costs to the average import price into Mexico, following the methodology as for raw materials.

3.6.4.   Labour

• (102) To calculate the value for labour, the Commission used ILO ⁶³ statistics applicable to Mexico. The Commission used ILO data on the mean nominal monthly earnings and mean weekly hours worked by employees in the manufacturing sector in Mexico for 2022.

3.6.5.   Electricity

• (103) The Commission used data available on industrial electricity prices applicable in Mexico as published by Global Petrol Prices ⁶⁴. At the time of calculation, the relevant data related to September 2022. The price includes all components of the electricity bill such as the cost of power, distribution and taxes.

3.6.6.   Natural gas

• (104) The price of natural gas for companies (industrial users) in Mexico is published by the Energy Regulatory Commission of the Government of Mexico ⁶⁵. The Commission used the data applicable for 2022 which covered the review investigation period.

3.6.7.   Other direct costs

• (105) Other direct costs were based on the information regarding the Union industry provided in the expiry review request see recital 39.

3.6.8.   Manufacturing overhead costs, SG&A, and profits

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

• (107) In order to establish an undistorted value of the manufacturing overheads and given the absence of cooperation from the exporting producers, the Commission used facts available in accordance with Article 18 of the basic Regulation. Therefore, the Commission established the ratio of manufacturing overheads to the total manufacturing and labour costs based on the data provided by the applicant in the expiry review request.

• (108) For SG&A costs and profit, the Commission used the publicly available financial data, for the review investigation period of the Mexican producer mentioned in recital 76 ⁶⁶.

3.7.   Calculation of the normal value

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

• (110) First, the Commission established the undistorted manufacturing costs. In the absence of cooperation by the exporting producers, the Commission relied on the information provided by the applicant in the review request on the consumption of each factor (raw materials, gas, electricity and labour) for the production of CRS.

• (111) The Commission multiplied the consumption volumes by the undistorted costs per unit observed in Mexico, as described in Section 3.6. A number of factors of production that represented a negligible share of total raw material costs in the review investigation period were expressed as a percentage of the main raw materials as explained in recital 84. The Commission applied that percentage to the undistorted cost of the main raw materials to arrive at an undistorted value.

• (112) Once the undistorted manufacturing cost was established, the Commission added the manufacturing overheads, SG&A and profit as noted in recitals 98 to 100 to the undistorted cost of manufacturing:

• — Manufacturing overheads, which accounted in total for 34,5 % of the direct costs of manufacturing,

• — SG&A and other costs, which accounted for 9,2 % of the Costs of Goods Sold (‘COGS’), and

• — Profits, which amounted to 21,4 % of the COGS, were applied to the total undistorted costs of manufacturing.

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

3.8.   Export price

• (114) In the absence of cooperation by Chinese exporting producers, the export price was determined based on Eurostat import data, at a cost, insurance and freight (‘CIF’) level. This CIF price was reduced by sea freight and insurance costs and domestic transport in China to arrive at the export price at ex-works level. Available data in relation to domestic transport costs in China including that in the country report of China in Doing Business ⁶⁷ and the average sea freight and insurance costs from China based on the data from the OECD ⁶⁸, was examined. However, the Commission decided to use the relevant data on transport costs provided in the expiry review request ⁶⁹, as this was more up to date compared to the other reports.

3.9.   Comparison and dumping margins

• (115) The Commission compared the normal values established in accordance with Article 2(6a)(a) of the basic Regulation for CRS, with the export price on an ex-works basis as established above.

• (116) On this basis, the dumping margin for imports from China, expressed as a percentage of the CIF Union frontier price, duty unpaid, resulted in an average 51,1 %.

• (117) However, the volume of imports into the Union in the review investigation period was negligible, corresponding to less than 0,01 % market share in the Union market and thus this quantity was considered unrepresentative. For this reason, the Commission concluded that these low volumes do not provide a sufficient basis for a continuation of dumping analysis. Therefore, the Commission also investigated the likelihood of recurrence of dumping.

3.10.   Likelihood of recurrence of dumping

• (118) The Commission investigated, in accordance with Article 11(2) of the basic Regulation, the likelihood of recurrence of dumping, should the measures be allowed to lapse. The following additional elements were analysed:

• — the production capacity and spare capacity in the PRC;

• — the relationship between prices prevailing on the Union market and export prices from the PRC to third countries;

• — the level of prices of PRC exports to third countries; and

• — the attractiveness of the Union market.

3.10.1.   Production capacity and spare capacity in the PRC.

• (119) In the absence of cooperation, the Commission established production capacity and spare capacity in the PRC on the basis of information provided in the request for review ⁷⁰ and information from CEIC Data ⁷¹.

• (120) According to information in the request for review, China’s current steel production capacity is estimated at 1,2 billion tonnes per year, while consumption is estimated at 1 billion tonnes ⁷². This allows for a spare capacity of 0,2 billion tonnes a year. Indeed, Chinese overcapacity in steel production is well established ⁷³. Moreover, the PRC would contribute to a quarter of the total increase of steelmaking capacity in 2023 ⁷⁴.

• (121) The applicant explained in the request for review that they encountered difficulties in obtaining specific data showing production capacity for CRS alone. Therefore, they used available data on production and capacity for hot-dip galvanised (‘HDG’) and electro-galvanised (‘EG’) products, as HDG and EG products include CRS within their range ⁷⁵. Therefore, the applicant was of the opinion that using data concerning HDG was the most accurate way to assess CRS capacity ⁷⁶.

• (122) Exporting producers of CRS in the country concerned have not only a significant and increasing spare capacity, but also the capability to swiftly further increase capacity if required. The reason for this is that CRS and other HDG products can be produced interchangeably on the same production lines and HDG producers can shift from one product to the other ⁷⁷.

• (123) On that basis, the applicant established an increase in production capacity of HDG steel from 50,4 million tonnes in 2018 to 51,2 million in 2022. They also noted a decrease in capacity utilisation in 2022 due to lack of demand for steel products on the domestic market ⁷⁸ – a development also observed for the Chinese steel industry as a whole by the World Steel Association, which forecasts an uncertain outlook for China and its domestic consumption for 2024 ⁷⁹. This decline in capacity utilisation is forecasted to fall to 86,2 % in 2023 and a further fall to 85,7 % by 2026 ⁸⁰. The estimated Chinese combined HDG and EG spare capacity of 6,4 million tonnes would represent over 80 % of the free consumption of CRS in the Union market during the review investigation period ⁸¹.

• (124) Based on the above, the Commission concluded that Chinese exporting producers have significant spare capacity to produce CRS for export to the Union, making an increase of exports at dumped prices likely if the measures were allowed to lapse.

3.10.2.   Export prices to third countries from the PRC

• (125) As noted above in recital 30, imports of CRS from the PRC virtually disappeared during the review investigation period. Consequently, the import price of the product concerned to the Union was not representative due to the very small volume concerned.

• (126) Based on GTA import statistics ⁸², the Commission identified the ten largest importers of CRS from the PRC during the review investigation period. These were, Thailand, South Korea, Brazil, Indonesia, Viet Nam, Israel, Chile, Peru, Japan and Philippines. Exports to these countries together represented 54,9 % of all Chinese exports during the review investigation period. However, in the request for review the applicant noted that the export price to the Philippines was excessively high during the review investigation period. Whereas in 2019 and 2020 export prices from China to Philippines were similar to prices to other destinations, in 2021 the export price to the Philippines rose by around 120 % in 2021 and by further 50 % in 2022 (aggregated 220 % increase between 2020 and 2022) while export prices from China to all other destinations marked an average increase of 50 % over the same period. In the request the applicant explained that such development of export prices to the Philippines was mainly due to the fact that the Philippines relied heavily on steel imports and due to supply chain disruption from Russia, they were purchasing expensive steel products from China ⁸³, including CRS. Thus, in the light of above and given the lack of cooperation of exporting producers from China, the Commission considered that the export prices to the Philippines cannot be deemed as a reliable indicator of export price level and decided not to take into account the export prices to the Philippines in its analysis.

• (127) The Commission adjusted the reported prices for the remaining nine countries to calculate the export price at ex-works level by deducting sea freight and insurance costs ⁸⁴ and domestic transport costs in China ⁸⁵. The price of the product exported to the nine export destinations analysed remains lower than the prevailing price level in the Union as explained in recital 130 below.

• (128) The Commission then compared the normal value established in accordance with Article 2(6a)(a) of the basic Regulation and the export prices to the nine main export destinations. The comparison showed that export prices to the nine countries were significantly lower than the normal value as follows:

Table 2

Price difference between the normal value and export price

Country	% of total ‘world’ exports of CRS from the PRC	The price difference between the normal value and export prices per country (%)
Thailand	10,4	115,7
South Korea	10,4	128,9
Brazil	6,3	110,3
Indonesia	4,6	92,3
Viet Nam	3,1	76,8
Israel	2,8	120,5
Chile	2,7	97,1
Peru	2,6	107,4
Japan	2,4	106,5