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

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) 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.

(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.

(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’).

(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’).

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(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).

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

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

(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.

(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.

(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.