Commission Implementing Regulation (EU) 2024/1064 of 9 April 2024 imposing a provisional anti-dumping duty on imports of certain alkyl phosphate esters originating in the People’s Republic of China

• (185) Under national law, only one trade union organisation is active. However, this organisation lacks independence from the state authorities and its engagement in collective bargaining and protection of workers’ rights remains rudimentary ⁵⁹. Moreover, the mobility of the Chinese workforce is restricted by the household registration system, which limits access to the full range of social security and other benefits to local residents of a given administrative area.

• (186) This typically results in workers who are not in possession of the local residence registration finding themselves in a vulnerable employment position and receiving lower income than the holders of the residence registration ⁶⁰. Those findings lead to the distortion of wage costs in China.

• (187) No evidence was submitted to the effect that the APE sector would not be subject to the Chinese labour law system described. The sector is thus affected by the distortions of wage costs both directly (when making the product concerned or the main raw material for its production) as well as indirectly (when having access to capital or inputs from companies subject to the same labour system in China).

3.2.2.6.   Significant distortions according to Article 2(6a)(b), sixth indent of the basic Regulation: access to finance granted by institutions which implement public policy objectives or otherwise not acting independently of the state

• (188) Access to capital for corporate actors in China is subject to various distortions.

• (189) Firstly, the Chinese financial system is characterised by the strong position of state-owned banks ⁶¹, which, when granting access to finance, take into consideration criteria other than the economic viability of a project. Similarly to non-financial SOEs, the banks remain connected to the state not only through ownership but also via personal relations (the top executives of large state-owned financial institutions are ultimately appointed by the CCP) ⁶² and, again just like non-financial SOEs, the banks regularly implement public policies designed by the GOC.

• (190) In doing so, the banks comply with an explicit legal obligation to conduct their business in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the state ⁶³. This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁶⁴.

• (191) While it is acknowledged that various legal provisions refer to the need to respect normal banking behaviour and prudential rules such as the need to examine the creditworthiness of the borrower, the overwhelming evidence, including findings made in trade defence investigations, suggests that these provisions play only a secondary role in the application of the various legal instruments.

• (192) For example, the GOC has clarified that even private commercial banking decisions must be overseen by the CCP and remain in line with national policies. One of the state’s three overarching goals in relation to banking governance is now to strengthen the Party’s leadership in the banking and insurance sector, including in relation to operational and management issues ⁶⁵. Also, the performance evaluation criteria of commercial banks have now to, notably, take into account how entities ‘serve the national development objectives and the real economy’, and in particular how they ‘serve strategic and emerging industries’ ⁶⁶.

• (193) 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. Estimates strongly suggest that Chinese credit ratings systematically correspond to lower international ratings ⁶⁷.

• (194) This is compounded by additional existing rules, which direct finances into sectors designated by the government as encouraged or otherwise important ⁶⁸. This results in a bias in favour of lending to SOEs, large well-connected private firms and firms in key industrial sectors, which implies that the availability and cost of capital is not equal for all players on the market.

• (195) Secondly, borrowing costs have been kept artificially low to stimulate investment growth. This has led to the excessive use of capital investment with ever lower returns on investment. This is illustrated by the growth in corporate leverage in the state sector despite a sharp fall in profitability, which suggests that the mechanisms at work in the banking system do not follow normal commercial responses.

• (196) Thirdly, although nominal interest rate liberalisation was achieved in October 2015, price signals are still not the result of free market forces but are influenced by government-induced distortions. The share of lending at or below the benchmark rate still represented at least one-third of all lending as of the end of 2018 ⁶⁹. Official media in China have recently reported that the CCP called for ‘guiding the loan market interest rate downwards’ ⁷⁰. Artificially low interest rates result in under-pricing, and consequently, the excessive utilisation of capital.

• (197) Overall credit growth in the China indicates a worsening efficiency of capital allocation without any signs of credit tightening that would be expected in an undistorted market environment. As a result, non-performing loans have increased rapidly, with the GOC a number of times opting to either avoid defaults, thus creating so called ‘zombie’ companies, or to transfer the ownership of the debt (e.g. via mergers or debt-to-equity swaps), without necessarily removing the overall debt problem or addressing its root causes.

• (198) In essence, despite the steps that have been taken to liberalise the market, the corporate credit system in China is affected by significant distortions resulting from the continuing pervasive role of the state in the capital markets. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (199) No evidence was submitted in the present investigation demonstrating that the sector of the product concerned 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. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

3.2.3.   Systemic nature of the distortions described

• (200) The Commission noted that the distortions described in the Report are characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above as well as in Part I of the Report apply throughout the country and across the sectors of the economy. The same holds true for the description of the factors of production as set out above and in Part II of the Report.

• (201) The Commission recalls that in order to produce the product concerned, certain inputs are needed. When the producers of the product concerned 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. These distortions were described in detail above, in particular in recitals 167 to 199. The Commission pointed out that the regulatory setup underpinning those distortions is generally applicable, APE producers being subject to those rules as any other economic operator in China. The distortions have therefore a direct bearing on the cost structure of the product concerned.

• (202) As a consequence, not only the domestic sales prices of the product concerned 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.

• (203) Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout China. This means, for instance, that an input that in itself was produced in China 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.

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

3.2.4.   Arguments from the interested parties

• (205) On 6 November 2023, CPCIF submitted a set of comments in reply to the First Note, including with respect to application of Article 2(6a) of the basic Regulation.

• (206) First, CPCIF took the position that Article 2(6a) of the basic Regulation is inapplicable due to its incompatibility with the WTO agreements and the ruling of the WTO Dispute Settlement Body (‘DSB’). As to incompatibility with WTO agreements, CPCIF argued that since some provisions of China’s WTO Accession Protocol relevant for dumping calculation expired on 11 December 2016, the EU must respect its corresponding obligations under WTO law. As to incompatibility with DSB rulings, CPCIF submitted that in line with the Appellate Body’s findings in DS 473, for the purpose of calculating the costs in order to obtain the normal value of the product concerned when the domestic price in the exporting country cannot be used, the investigating authorities are not allowed to evaluate the costs reported in the records kept by the exporter/producer pursuant to a benchmark unrelated to the costs of production in the country of origin.

• (207) As to CPCIF arguments on compatibility with WTO law, the Commission recalled that in anti-dumping proceedings concerning products from China, the parts of Section 15 of China’s Accession Protocol to the WTO that have not expired continue to apply when determining normal value, both with respect to the market economy standard and with respect to the use of a methodology that is not based on a strict comparison with Chinese prices or costs.

• (208) As to CPCIF’s reference to DS 473, the Commission recalled that the Report of Appellate Body in DS 473 did not concern the implementation of Article 2(6a) of the basic Regulation, but of a particular stipulation within Article 2(5) of the basic Regulation. Nevertheless, WTO law, as interpreted by the Appellate Body in DS 473, permits the use of data from a third country, duly adjusted when such adjustment is necessary and substantiated. Therefore, CPCIF’s arguments could not be accepted.

• (209) Second, CPCIF submitted that the alleged distortions are not well evidenced and, even if they were to exist, did not affect all aspects of the production costs of alkyl phosphate esters, thus not the entirety of the costs of Chinese exporting producers need to be established on a different basis.

• (210) In particular, CPCIF argued that:

• (a) the allegations in the complaint are general in nature and concern China’s economy structure, rather than the APE market. They largely rely on the Report, which is dated 20 December 2017. The evidential value and the relevance of the alleged cross-cutting factors existing in China’s economy that are deemed distortive according to the Report is questionable. In particular, the Report does not reveal any links to the Chinese APE industry;

• (b) the complainants did not provide adequate evidence indicating that the alkyl phosphate market is served ‘to a significant extent’ by companies which are under State control, nor did they specify what is the total number of Chinese TCPP/TEP producers and the market share of the three or four companies allegedly controlled by the GOC. In this respect, CPCIF pointed out that many of the Chinese producers are publicly listed companies and privately owned. CPCIF emphasised that the fact that some of these publicly listed companies are partially owned by public trust funds or that the privately owned companies have personal connections with CCP cannot automatically lead to the conclusion of existence of distortions in the market;

• (c) there is not sufficient evidence to support the complainants’ allegations that the Chinese industry of alkyl phosphate esters enjoyed abnormal costs as a result of discriminatory State intervention in the upstream industry.

• (211) Concerning CPCIF’s arguments on sufficiency of evidence to demonstrate the existence of significant distortions and the extent to which they affect production cost, the Commission recalled at the outset that according to Article 2(6a)(e) of the basic Regulation, if the Commission deems the evidence submitted by the complainants on the significant distortions sufficient, it can initiate the investigation on this basis.

• (212) In order to assess the existence and potential impact of the significant distortions, the Commission has, in line with Article 2(6a)(e) of the basic Regulation, collected the data necessary to determine the existence and impact of significant distortions and the consequent use of the methodology prescribed by Article 2(6a)(a) of the basic Regulation.

• (213) The data collected by the Commission and the resulting conclusions, whether on presence of state-owned companies in the sector of the product concerned, the links to the CCP or the existence of policies affecting the cost structure, are presented in detail in this Regulation. Therefore, CPCIF’s arguments on the evidence in the complaint presenting allegation of questionable evidential value or on the Commission’s conclusions being made automatically are misplaced.

• (214) On 22 November 2023, the exporting producer Anhui RunYue submitted a set of comments in reaction to the First Note, including on the application of Article 2(6a) of the basic Regulation.

• (215) First, Anhui RunYue argued that Article 2(6a) of the basic Regulation is not compatible with WTO law and DSB case law. Anhui RunYue argued that Article 2.2 of the WTO Anti-dumping Agreement (‘ADA’) does not recognise the concept of significant distortions, and even if the concept was to fall within the ambit of Article 2.2 ADA, the EU’s calculation of the constructed normal value needs to be in conformity with Article 2.2.1.1 ADA and with the Appellate Body’s interpretation thereof, as provided in DS 473.

• (216) With reference to the situations in which Article 2.2 ADA permits the construction of normal value, Anhui RunYue argued that an investigation according to Article 2(6a) of the basic Regulation would need to fall under the definition of either sales not in the ‘ordinary course of trade’ or a ‘particular market situation’. Since the basic Regulation instead allows for the construction of normal value once it is established that it is not appropriate to use domestic prices and costs due to significant distortions, Anhui RunYue pointed out that the EU legislation introduces a concept that does not exist in the ADA.

• (217) Moreover, Anhui RunYue claimed that the use of data on factors of production in a representative third country results in a situation where the constructed normal value can in no way reflect the price and cost level in the exporting country and, consequently, is another inconsistency with WTO law.

• (218) Second, Anhui RunYue submitted that there is no sufficient evidence to prove the existence of significant distortion in the sector of the product under investigation.

• (219) According to Anhui RunYue this is for the following reasons:

• (a) the complaint relies on the Report which is now quite dated, given the substantial developments which both the Chinese and EU economies have witnessed since its publication. Anhui RunYue therefore requested the Commission to provide updated and valid evidence concerning significant distortions before taking final decision concerning the market of the product concerned. In addition, Anhui RunYue pointed out that that the EU has adopted EU-wide market measures which are similar to the Chinese measures criticised in the Report, including providing huge subsidies to EU industries to promote their adherence to new EU industrial policy objectives;

• (b) the 14th FYP to which the complaint refers is, according to Anhui RunYue not a binding regulation, it only represents a guideline suggested by the government to indicate the development directions and blueprint for the country and for certain industries. In addition, Anhui RunYue pointed out that the complainants omitted to mention certain aims or goals stated in the 14th FYP which appear to contradict the existence of significant distortions, such as the goal to ‘give full play to the decisive role of the market in resource allocation’ or the goal to ‘create a market-oriented, legalized, and internationalized business environment, adhere to high-quality introduction and high-level globalization, promote efficient global allocation of factor resources, and strengthen upstream and downstream coordination of the industrial chain and coupled development between related industries’. Moreover, according to Anhui RunYue, since the EU’s industrial policies also aim to promote essential sectors, the complainants’ claim regarding Chinese principles and policy is hypocritical;

• (c) allegations regarding government intervention by reference to the nature of SOEs and/or to connections between the Party and companies manufacturing the product concerned are baseless, because not all the producers are SOEs and the connection with CCP is not an indication of the government’s control over the operation of company. Anhui RunYue Ltd. referred in this context to Article 6 of the Chinese Law on State-owned Assets in Enterprises, as well as to Article 11 of the Chinese Company Law.

• (220) Anhui RunYue’s arguments could not be accepted. First, concerning the claim that the concept of significant distortions pursuant to Article 2(6a) of the basic Regulation does not correspond to any similar concept under Article 2.2 ADA, the Commission considers Article 2(6a) of the basic Regulation to be fully compliant with the relevant rules of the ADA, including the possibilities to construct normal value provided in Article 2.2 ADA.

• (221) As to Anhui RunYue’s reference to DS473 and the argument that the constructed normal value does not reflect the price and cost level in the exporting country, it was already addressed above in recital 208.

• (222) Second, with regard to the claim on the outdated character of the evidence in the Report and on the need for the Commission to provide updated and valid evidence concerning significant distortions before taking final decision, the Commission noted that the Report is a comprehensive document based on extensive objective evidence, including legislation, regulations and other official policy documents published by the Chinese authorities, third party reports from international organisations, academic studies and articles by scholars, and other reliable independent sources.

• (223) The Commission further noted that legislation and policy documents referred to in the Report, including legislation applicable to the product concerned, remain largely in force or have been continued in subsequent legislative and policy documents.

• (224) Such more recent developments are documented in the Commission’s findings, which further supplemented the information pointing to the existence of significant distortions contained in the Request and the Report (see recitals 69 and 132). As for Anhui RunYue’s remarks regarding policies within the EU that are allegedly similar to China’s FYPs, the Commission noted that according to Article 2(6a)(b) of the basic Regulation, the potential impact of one or more of the distortive elements listed in that provision is analysed with regard to prices and costs in the exporting country.

• (225) The cost structure and price formation mechanisms in other markets, such as in the EU, do not bear any relevance whatsoever in the context of this proceeding.

• (226) Furthermore, as to the nature of the 14th FYP, the Commission pointed out, that the Chinese economy is covered by a complex web of FYPs, driving decisions by public authorities at all levels.

• (227) As to Anhui RunYue’s argument concerning the nature of the Chinese policy documents, the Commission considers FYPs binding documents, not least since the 14th FYP dedicates, for example, a whole section to ‘improving the planning implementation mechanism’ ⁷¹ stating that: ‘As regards the binding indicators, major engineering projects, and tasks in public services, environmental protection, safety, and other fields set out in this Plan, it is necessary to clarify the responsibilities parties and schedule requirements, to allocate public resources, guide and control social resources, and ensure completion as scheduled. As regards the expected indicators and tasks in the fields of industrial development and structural adjustment set out in this Plan, it is necessary to mainly rely on the role of market players to achieve them. Governments at all levels must create a favourable policy environment, institutional environment, and legal environment’.

• (228) As to the allegedly hypocritical position of the complainants, the Commission noted that pursuant to Article 2(6a)(b) of the basic Regulation, the potential impact of one or more of the distortive elements listed in that provision is analysed with regard to prices and costs in the exporting country.

• (229) The industrial policies aiming to promote essential sectors in other markets, such as in the EU, are not relevant in the context of the present investigation.

• (230) In addition, concerning the argument that the allegations related to government intervention are baseless as not all the producers are SOEs and the connection with CCP is not an indication of the government’s control, the Commission disagreed.

• (231) State ownership, as well as state control and policy supervision or guidance are largely present in the APE sector. Moreover, presence of CCP structures in companies of the APE sector and the fact that the companies facilitate party building activities and involvement thereof into their decision-making is a clear indicator that the said companies are not independent from the state and are liable to be acting in accordance with CCP policies rather than market forces.

• (232) The references by Anhui RunYue to Chinese legislation are misplaced here.

• (233) First, the reading of the Chinese Law on State-owned Assets in Enterprises by Anhui RunYue is selective. While the company emphasised the formal division between the administrative and shareholder roles of the State according to Article 6 of the Law, it chose to omit a reference to Article 1 which defines the overall purpose of the Law as, inter alia, ‘supporting the leading role of the State-owned economic sector in the national economy and promoting the development of the socialist market economy’.

• (234) Anhui RunYue also failed to refer to Article 7 which mandates the State to encourage greater investment of State capital in key industries and areas important for the national economy, as well as to Article 36 according to which SOEs, when making investments, shall comply with the national industrial policies. When it comes to Article 11 of the Chinese Company Law, the Commission failed to see why the CCP would not be in a position to intervene in the operation of an enterprise, just because it was not involved in the preparation of the enterprise’s articles of association.

• (235) In this respect, the Commission pointed in particular out that according to its Article 1, the Chinese Company Law was adopted, inter alia, to promote the development of the socialist market economy.

3.2.5.   Conclusion

• (236) The analysis set out in this section, which includes an examination of all the available evidence relating to China’s intervention in its economy in general as well as in the sector of the product concerned showed that prices and costs of the product concerned, 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.

• (237) On that basis, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case.

• (238) 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 discussed in the following section.

3.2.6.   Representative country

General remarks

• (239) 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 China. For this purpose, the Commission used countries with a gross national income per capita similar to China on the basis of the database of the World Bank ⁷²,

• — production of the product under investigation in that country, and

• — availability of relevant public data in the representative country.

• (240) The Commission issued two notes for the file on the sources for the determination of the normal value: the First Note ⁷³ and the Second Note ⁷⁴ (FOP Notes).

• (241) These notes described the facts and evidence underlying the relevant criteria, and addressed the comments received by the parties on these elements and on the relevant sources.

• (242) In the Second Note, the Commission informed interested parties of its intention to consider Brazil as an appropriate representative country if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

A level of economic development similar to China

• (243) The product under investigation is only produced in China, the European Union, the United States of America, and Japan. None of these is a country with a level of economic development similar to China in accordance with the criteria set out in Article 2(6a).

• (244) The Commission therefore broadened its analysis in order to find a product in the same general category and/or sector of the product under investigation and on this basis to select a representative country.

A product in the same general category and/or sector

• (245) In both the First and Second Note, the Commission explained its method for finding a product in the same general category or sector that was produced in an upper middle-income country.

• (246) The Commission explained in the First Note that alkyl phosphate esters are organophosphate flame retardants (‘OPFR’) and therefore the analysis to find a representative country would start with finding production of OPFR, a product in the same general category as APE, as both TCPP and TEP are OPFRs.

• (247) The First Note stated that production of OPFR was found in both the Russian Federation and Türkiye. The Russian Federation was not further considered as a possible representative country due to lack of reliable import data.

• (248) As explained below, no readily available financial data for producers of OPFR in Türkiye could be found.

• (249) The Commission then explained in the First Note that plasticisers could be considered as a sufficiently similar product to alkyl phosphate esters for the following reasons:

• — APE, OPFR and plasticisers belong to the same family of chemicals, namely esters,

• — APE, OPFR and plasticisers are all added to polymers to modify their rheology or other properties,

• — the basic production process of all three is the same,

• — APE, OPFR and plasticisers only use liquid raw materials, and the end product is in liquid form. They require similar infrastructure and processes for production, as well as handling and storage of the raw materials and end product.

• (250) Production of plasticisers was found in Brazil, and publicly available financial data was also found for a profitable producer. The Commission found no evidence of the production of plasticisers in another upper-middle income country.

• (251) The Commission invited comments on the reasoning used to find a representative country in the First Note.

• (252) No interested party was able to identify another chemical that could be considered as a product in the same general category as APE.

• (253) CPCIF did not agree that plasticisers were in fact sufficiently similar products and agreed with the Commission that OPFR should be used as a more similar product. However, CPCIF agreed that there was no readily available data related to OPFR from Türkiye or any other upper-middle income country.

• (254) CPCIF stated that plasticisers were just one chemical in a larger family and that many other esters or chemicals meet the same criteria set out in the First Note.

• (255) The Commission summarised and responded to these comments in the Second Note and concluded that plasticisers are the more similar product to APE, and OPFR in general, than other esters which do not share those properties with APE.

• (256) The Second Note came to this conclusion for the following reasons:

• — the similarity of chemical and physical characteristics between APE and plasticisers,

• — the effect that both have on the materials they are added to, and

• — that plasticising properties are common in the chemicals of the alkyl phosphate group.

• (257) The Commission therefore intends to consider Brazil as representative country based on their production of plasticisers.

Availability of relevant public data in the representative country

• (258) The Commission noted that although Türkiye could be considered as a representative country, based on the production of OPFR, both the First and Second Notes set out problems with both publicly available import data and readily available financial data.

• (259) Import data from Türkiye was not considered reliable because of the small quantities of imports of the main raw materials, in particular negligible quantities of propylene oxide and phosphorus.

• (260) The Commission and interested parties were also unable to find any readily available financial data from companies in Türkiye producing a similar product, neither OPFR or plasticisers.

• (261) As explained above Brazil could be used as an appropriate representative country, based on the production of plasticisers and given the fact that the imports of the main factors of production were not materially affected by imports from China or any of the countries listed in Annex I to Regulation (EU) 2015/755 of the European Parliament and of the Council ⁷⁵.

• (262) The Commission was also able to find one company in Brazil producing plasticisers with publicly available financial data showing an undistorted and reasonable amount of SG&A and profit under Article 2(6a)(a) of the basic Regulation.

• (263) The Commission therefore informed the interested parties in the Second Note that it intended to use Brazil as an appropriate representative country in accordance with Article 2(6a)(a), first indent of the basic Regulation to source undistorted prices or benchmarks for the calculation of normal value.

• (264) Interested parties were invited to comment on the appropriateness of Brazil as a representative country and of Elekeiroz SA as a company in the representative country. No comments were received on this point.

Level of social and environmental protection

• (265) Having established that Brazil was the only available appropriate representative country, based on all 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.

Conclusion

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

3.2.7.   Sources used to establish undistorted costs and benchmarks

• (267) In the First Note, the Commission listed the factors of production such as raw materials, energy and labour used in the production of the product under investigation by the exporting producers and invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production mentioned in that note.

• (268) Subsequently, in the Second Note, the Commission stated that, in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use the Global Trade Atlas (‘GTA’) to establish the undistorted cost of most of the factors of production, notably propylene oxide, ethanol, phosphorus, and chlorine.

• (269) The Commission also noted that one of the sampled exporting producers purchased phosphorus oxychloride (a semi-finished product used both in the production of TCPP and TEP) rather than manufacturing it from chlorine and phosphorus.

• (270) As phosphorus oxychloride was traded worldwide in very limited quantities due to its hazardous nature, the Commission announced in the Second Note that it would determine its benchmark by:

• — using the verified consumption ratios of each factor of production (chlorine, phosphorus, labour, and energy) used by the Chinese exporters who manufacture phosphorus oxychloride from chlorine and phosphorus,

• — and calculating the price of phosphorus oxychloride by replacing the cost of these factors of production with the undistorted prices from Brazil.

• (271) In addition, the Commission stated that it would use the statistics provided by the Instituto Brasileiro de Geografia e Estatística (‘IBGE’) ⁷⁶ for establishing undistorted costs of labour in Brazil and the prices published by the Ministério de Minas e Energia ⁷⁷ for electricity and steam (based on natural gas).

• (272) In the Second Note, the Commission also informed the interested parties that due to the negligible weight of some of the raw materials in the total cost of production, these negligible items, representing less than 0,6 % of the total cost of production reported by the sampled exporting producers, were grouped under ‘consumables’.

• (273) The Commission also stated that it would calculate the percentage of the consumables on the total cost of raw materials and apply this percentage to the recalculated cost of raw materials when using the established undistorted benchmarks from the appropriate representative country.

3.2.7.1.   Factors of production

• (274) Considering all the information submitted by the interested parties and collected during the verification visits, 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

Factor of production	Commodity code78	Undistorted value	Source of the data
Raw materials	Raw materials	Raw materials	Raw materials
Propylene Oxide	2910 20 00	15 373 CNY/t	GTA
Ethanol	2207 10 10	6 012 CNY/t79	GTA
Phosphorus	2804 70 10	31 772 CNY/t	GTA
Chlorine	2801 10 00	1 086 CNY/t	GTA
Labour	Labour	Labour	Labour
Labour	N/A	68,64 CNY/h	Instituto Brasileiro de Geografia e Estatística
Energy	Energy	Energy	Energy
Electricity	N/A	0,84 CNY/kWh	Ministério de Minas e Energia
Natural gas	N/A	18,14 US/MMBtu	Ministério de Minas e Energia
Steam	N/A	351,34 CNY/t	Ministério de Minas e Energia (Calculation based on the cost of gas)

3.2.7.2.   Raw materials

• (275) 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 GTA to which import duties and transport costs were added, as explained in recitals 280 and 281.

• (276) The import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding China and countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755.

• (277) The Commission decided to exclude imports from China into Brazil as it concluded in recital 61 that it is not appropriate to use domestic prices and costs in China due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation.

• (278) 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 China into the representative country, the volume of imports from other third countries remained representative.

• (279) For a number of factors of production, the actual costs incurred by the cooperating exporting producers represented a negligible share of total raw material costs in the review investigation period. As the value used for these had no appreciable impact on the dumping margin calculations, regardless of the source used, the Commission decided to include those costs into consumables as explained in recital 272.

• (280) In order to establish the undistorted price of raw materials, as provided by Article 2(6a)(a), first indent of the basic Regulation, the Commission applied the relevant import duties of the representative country.

• (281) The Commission expressed the transport cost incurred by the cooperating exporting producer for the supply of raw materials as a percentage of the actual cost of such raw materials and then applied the same percentage to the undistorted cost of the same raw materials in order to obtain the undistorted transport cost.

• (282) The Commission considered that, in the context of this investigation, the ratio between the exporting producers’ raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory in the representative country.

• (283) In response to the Second Note, Shandong Yarong requested the Commission to make an adjustment to the import price of propylene oxide into Brazil, on the grounds that the packaging costs of imports into Brazil may not be the same as those on the Chinese domestic market.

• (284) Given the lack of evidence for this request, and the lack of any information that would allow the Commission to make such an adjustment, this claim was rejected.

• (285) In its comments to both the First and Second Note, Anhui RunYue claimed that GTA import prices for the raw materials were established at CIF level and therefore contained ocean freight costs and insurance fees while Chinese producers purchased raw materials from the local market at prices which did not include any ocean freight costs and insurance fees.

• (286) Therefore, in the company’s view, ocean freight costs and insurance fees should be deducted from the GTA process for Brazil to ensure fair comparison.

• (287) The Commission noted that it used consistently in its previous anti-dumping investigations CIF prices available in the trade statistics to establish a purchase price of the inputs available on the domestic market of the representative country.

• (288) The Commission considered that this price was in direct competition with the domestic prices in the representative country and therefore could be used as an appropriate benchmark for the purpose of the investigation. On this basis, the claim was rejected.

• (289) Anhui RunYue, the only exporting producer buying phosphorus oxychloride, also requested the Commission to disclose more information on the method for calculating the benchmark for this factor of production. The Commission disclosed this benchmark calculation to Anhui RunYue at the time of pre-disclosure.

3.2.7.3.   Labour

• (290) The Commission used the statistics published by the Instituto Brasileiro de Geografia e Estatística (‘IBGE’) ⁸⁰ to establish the benchmark for labour in Brazil. The IBGE statistics provided detailed information on wages, related social charges, and number of employees in the manufacturing sector for 2021. This data was provided on an annual basis.

• (291) The Commission used data for labour costs (limited to staff linked to production) for the economic activity ‘Manufacture of chemicals and chemical products’ according to the NACE Rev.2 classification ⁸¹.

• (292) Values were indexed to the investigation period using the National Consumer price index (Índice Nacional de Preços ao Consumidor, ‘INPC’) published by the IBGE ⁸².

• (293) Information on worked hours in Brazil was not available in the IBGE statistics, and so to calculate the benchmark the Commission used information on hours per week worked in Brazil as provided by the ILO ⁸³.

• (294) Consequently, the Commission calculated the labour cost per hour in Brazil by dividing the annual labour cost as per IBGE statistics by the annual hours worked.

• (295) As set out below in recital 331 in the calculation of normal value, the labour cost per hour in Brazil was then multiplied by the number of worked hours as reported by the cooperating Chinese exporting producers.

• (296) Following the Second Note, CPCIF, Anhui RunYue, and Shandong Yarong commented on the source used to establish undistorted costs for labour.

• (297) CPCIF argued that the statistical method (enterprise survey) and the type of data (survey data) used by IBGE made the quality of the statistics dependant on the willingness of the companies to respond to the survey, which, in the absence of details about the companies in the survey, rendered the representativeness of the data for the relevant industry sector questionable.

• (298) The Commission noted that IBGE was an entity run by the federal administration, under the Ministry of Economy and the main provider of data and information about the country. It therefore considered that the data collected, and the methods used by the entity were sufficiently reliable and serving as a primary source of statistical data in Brazil. The availability of the details about the companies participating in a particular survey were not considered necessary to confirm the reliability of such institution, the statistical methods used, and the data collected by it. The claim was therefore rejected.

• (299) CPCIF also submitted that the labour cost calculated by the Commission was inflated by a number of factors, namely a too high percentage of social charges, the inclusion of non-mandatory costs and double counting of other costs. Moreover, it contested that the count of employees was done at year end, and this excluded the personnel laid off over the year, whereas its severance pay was included, leading to the salary per employee to be inflated.

• (300) First, the Commission applied to the wages of the staff linked to production a percentage of social charges and other labour benefits calculated as a ratio of the total charges over the total wages. In CPCIF’s view, the Commission should adjust this percentage since the costs of the staff not linked to production was expected to weigh more, due to expected higher remuneration level. However, CPCIF did not corroborate this with any evidence nor suggested any possible method to make the adjustment.

• (301) Second, IBGE included in its statistics detailed labour costs, including not only statutory social adjustments but also non-mandatory costs charged to employers; as these were integral parts of the labour costs, and pertinent for the calculation of the average labour cost, there was no reason to exclude them. In addition, CPCIF did not provide any convincing evidence that some costs were double counted in the statistics.

• (302) Finally, the Commission noted that the number of staff linked to production remained stable in 2021, showing a very limited increase of 2 %; therefore, it considered that the year-end count was a reliable proxy for the average number of employees in production over the year.

• (303) The claims were therefore rejected.

• (304) Anhui RunYue claimed that labour costs were influenced by several factors and varied significantly between various upper-middle income countries. Therefore, it requested that the Commission consider that their labour costs were not distorted and should not be replaced.

• (305) The Commission noted that once the existence of significant distortions affecting the product under investigation was established in accordance with Article 2(6a)(b) of the basic Regulation, it was prevented from using the actual costs of individual exporting producers, unless they were positively established not to be distorted on the basis of accurate and appropriate evidence. This was not the case and, as a result, the relevant costs were found distorted and the claim was rejected.

• (306) Both CPCIF and Anhui RunYue requested the Commission to not use the consumer price index (INCP) to adjust the IBGE data. CPCIF submitted that it was not appropriate to use this index when the purchasing power of employees was reduced because of high inflation and suggested using the average wage per quarter in Brazil published by IBGE. In Anhui RunYue’s view, there was no exact positive correlation between the national consumer price index and the wage level as they were influenced by different factors. However, neither CPCIF nor Anhui RunYue substantiated their claim with evidence.

• (307) The Commission also noted that the INCP was widely used in Brazil in wage negotiations, as it measured the price change for those who were in the salary bracket up to 5 minimum wages ⁸⁴. Therefore, the Commission considered that it was an appropriate index to measure wage inflation. The claim was dismissed.

• (308) Shandong Yarong criticised the Commission for using two different sources to determine the labour cost per hour in Brazil, namely IBGE as the source of wages and social charges, and ILO data for the number of hours worked in Brazil per month.

• (309) Shandong Yarong contended that the Commission should use only ILO data, rather than combining two different sources, or, alternatively, use the actual worked hours of the Chinese exporting producers.

• (310) Given that the IBGE does not publish their calculations on the number of hours worked in Brazil per month, the Commission was unable to take both costs and worked hours from the same source, and such restrictions were unnecessary. Shandong Yarong also did not give any reason why either data source would not be reliable.

• (311) Moreover, the Commission observed that ILO did not provide the same level of detail of IBGE as it aggregated data for the whole manufacturing sector, regardless of the size and the sub-group of activity of the companies, and therefore it considered IBGE a more reliable source of data to establish an undistorted labour cost.

• (312) In addition, the Commission considered that it would be methodologically flawed to determine the benchmark for labour cost in one country, in this case Brazil, using the number of hours worked in a different country; labour cost statistics should reflect the volume of labour input, i.e. the number of hours actually worked, and the corresponding costs for the employer for this volume of labour input.

• (313) The claims were therefore dismissed.

3.2.7.4.   Electricity

• (314) The price of electricity for industrial users in Brazil is published by the Ministry of Mines and Energy (Ministério de Minas e Energia). The Commission used the average prices published in the ‘Brazilian monthly energy bulletin’ for the investigation period.

• (315) CPCIF claimed that the bulletin was not an adequate source since, according to the same Brazilian Ministry of Mines and Energy, it allowed only for ‘a reasonable estimate of the monthly and accumulated behaviour of total energy demand in Brazil’. CPCIF requested the Commission to use data from a different publication ⁸⁵ of the Ministry of Mines and Energy that had been used in previous cases.

• (316) The Commission rejected this claim. The Ministry of Mines and Energy collected the data for all its publications on electricity from the same source, the Agência Nacional de Energia Elétrica (ANEEL) ⁸⁶ and therefore the monthly bulletin had the same level of reliability of other publications.

• (317) CPCIF also suggested that the Ministry of Mines and Energy Monthly Bulletin prices could include taxes and VAT and that, if this was the case, this should be removed.

• (318) The Commission researched this issue and concluded that there was no VAT levied on energy in Brazil. However, the rates published in the monthly bulletin included the ‘Imposto sobre Circulação de Mercadorias e Serviços’ (‘ICMS’), a tax levied by the Brazilian states on the circulation of goods and the provision of interstate and inter-municipal transportation and communications services. This tax could be claimed back by the industrial users and was therefore not effectively paid. As ICMS was collected by most states at the rate of 17 % to 18 % during the investigation period, the Commission recalculated the electricity benchmark, deducting an average of 17,5 % from the rates published.

3.2.7.5.   Steam

• (319) In the Second Note, the Commission indicated that it intended to calculate the price of steam in Brazil using the methodology suggested by the U.S. Department for Energy ⁸⁷. This methodology provides a cost for steam based on the heat input required to produce it. To this end, the Commission used natural gas as heat input and used the price of gas for industrial users in Brazil as published by the Ministry of Mines and Energy of Brazil ⁸⁸ covering the investigation period.

• (320) CPCIF suggested that, since Brazil had vast reserves of coal, steam would be more likely made from the combustion of steam coal, rather than natural gas, and that the Commission’s methodology should reflect this suggestion.

• (321) CPCIF did not provide any evidence that steam coal was a more appropriate input to generate steam in Brazil and more specifically in the chemical sector. On the contrary, the Brazilian Energy Balance ⁸⁹ published by the Empresa de Pesquisa Energética (‘EPE’), the research office of the Ministry of Mines and Energy, showed that natural gas had a much higher share than steam coal in the energy mix used in the chemical sector, with natural gas representing 31 % of the energy consumption against 2,2 % of the steam coal. The claim was therefore dismissed.

• (322) As for electricity, CPCIF claimed that the Commission should use the price of gas net of taxes, as the price published in the bulletin included taxes. The Commission considered that the claim was founded and that ICMS was levied also on gas, but then could be claimed back by the industrial users and was not effectively paid. Therefore, the Commission recalculated the price for gas deducting the 17,5 % related to ICMS.

3.2.7.6.   Manufacturing overhead costs, SG&A and profits

• (323) 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 above.

• (324) The manufacturing overheads incurred by the cooperating exporting producers were expressed as a share of the costs of manufacturing actually incurred by the exporting producers. The percentage was applied to the undistorted costs of manufacturing.

• (325) For establishing an undistorted and reasonable amount for SG&A and profit, the Commission relied on the financial data for 2022 for Elekeiroz SA as published on their website ⁹⁰.

• (326) CPCIF noted that these accounts for 2022 split the company results into organic and inorganic chemical sales. CPCIF contended that the use of the financial data related to the organic business segment would better reflect the SG&A and profit of a producer of APE.

• (327) As APE is an organic compound, the Commission considered CPCIF’s claim founded and therefore took into account only the data related to the organic business segment when calculating SG&A and profit.

• (328) Shandong Yarong requested the Commission to limit the profit of the company Elekeiroz SA to the target profit of the Union industry as set out in the complaint.

• (329) Given that this suggestion would in fact make the use of the accounts of Elekeiroz redundant and would not reflect the profits made by this company, this claim to reduce the profit was rejected.

3.2.8.   Calculation

• (330) Based on 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.

• (331) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of the cooperating exporting producer. These consumption rates provided by the sampled exporting producers were verified during the verification. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country.

• (332) Once the undistorted manufacturing cost was established, the Commission applied the manufacturing overheads, as described in recital 324.

• (333) The Commission then added SG&A of 8,49 % and profit of 8,39 % of Elekeiroz SA, as explained in recital 325, both expressed as a percentage of the costs of goods sold (‘COGS’).

3.3.   Export price

• (334) The sampled exporting producers exported to the Union either directly to independent customers or through related companies.

• (335) For those exports of the product concerned directly to independent customers in the Union, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

• (336) For one sampled exporting producer, a small quantity of exports to the Union were made via a related trader in a third country. In this case the export price was the price at which the product was first resold to an independent buyer in the Union.

3.4.   Comparison

• (337) The Commission compared the normal value and the export price of the sampled exporting producers on an ex-works basis. Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability.

• (338) In accordance with Article 2(10) of the basic Regulation, adjustments were made for transport, insurance, handling, loading costs, customs duty, credit costs, bank charges and commissions.

• (339) For the exporting producer Nantong Jiangshan, an adjustment under Article 2(10)(i) was made for sales through a related trading company based in Singapore to ensure price comparability.

• (340) The Commission established that the related company based in Singapore carried out functions comparable to those of an agent working on a commission basis. This finding was based on the following ‘consistent indicia’ [^ntr91-L_202401064EN.000101-E0091]:

• (341) The trader, which is established in a different country, performed essential sales-related functions such as finding customers, conducting sales negotiations, signing contracts, arranging shipments and preparing documents for customs clearance according to the customer’s requirements. Those functions were performed in relation to all export sales to the Union in which the trader was involved. Those sales constituted a minor portion of all export sales to the Union by Nantong Jiangshan during the investigation period.

• (342) Finally, the contract between Nantong Jiangshan and the related trader contains clauses that confirm the independence of the trader in its economic activities and the ‘lack of solidarity’ between the trader and Nantong Jiangshan.

• (343) The functions of this trader were those of an agent working on a commission basis and therefore an adjustment under Article 2(10)(i) was justified. The adjustment consisted of the deduction of the SG&A of the trading company and a notional amount of profit, which would normally be taken from cooperating unrelated importers.

• (344) Since the profit of the cooperating unrelated importer ⁹² could not be disclosed, the Commission decided to resort to the profit margin used in a most recent investigation concerning a chemical product, namely a profit margin of 6,89 % of an unrelated importer established in the polyvinyl alcohols (‘PVA’) investigation ⁹³. Such a profit margin was considered appropriate in view of the information available.

3.5.   Dumping margins

• (345) For the sampled exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

• (346) On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Company	Provisional dumping margin
Anhui RunYue Technology Co., Ltd.	45,1  %
Nantong Jiangshan Agrochemical & Chemicals Limited Liability Co.	68,4  %
Shandong Yarong Chemical Co., Ltd.	63,0  %

• (347) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled exporting producers.

• (348) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 59,1 %.

• (349) For all other exporting producers in China, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers.

• (350) The level of cooperation is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of Eurostat statistics.

• (351) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted more than 80 % of the total imports during the investigation period. On this basis, the Commission considered it appropriate to establish the dumping margin for non-cooperating exporting producers at the level of the sampled company with the highest dumping margin.

• (352) The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Company	Provisional dumping margin
Anhui RunYue Technology Co., Ltd.	45,1  %
Nantong Jiangshan Agrochemical & Chemicals Limited Liability Co.	68,4  %
Shandong Yarong Chemical Co., Ltd.	63,0  %
Other cooperating companies not sampled in Annex	59,1  %
All other companies	68,4  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (353) The like product was manufactured by three producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (354) The total Union production during the investigation period was established at around 18 274 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as the replies to the anti-dumping questionnaires by all three Union producers. As indicated in recital 10, the three investigated Union producers represented the total Union production of the like product.

4.2.   Determination of the relevant Union market

• (355) To establish whether the Union industry suffered injury and to determine consumption and the various economic indicators related to the situation of the Union industry, the Commission examined whether and to what extent the subsequent use of the Union industry’s production of the like product had to be taken into account in the analysis.

• (356) The Commission found that a small part of the total Union producers’ production was destined for the captive market. Only one of the Union producers had sold or used the product captively and due to the business confidential nature of this data, the exact volumes cannot be disclosed in this Regulation. The captive market was stable and below 2 % of total Union consumption.

• (357) The Commission examined certain economic indicators relating to the Union industry on the basis of data of sales on the free market. These indicators are: sales volume and sales prices on the Union market; market share; growth; export volume and prices; profitability; return on investment; and cash flow.

• (358) However, other economic indicators could meaningfully be examined only by referring to the whole activity, including the captive use and captive sales of the Union industry. These are: production; capacity, capacity utilisation; investments; stocks; employment; productivity; wages; and ability to raise capital. They depend on the whole activity, whether the production is captive or sold on the free market.

• (359) Given that only a small part of the Union producers’ production was destined for the captive market, the investigation found no meaningful difference between the economic indicators whether examined referring to the whole activity or on the basis of data for the free market.

4.3.   Union consumption

• (360) The imports of the product concerned fall into different TARIC codes and one of the codes include also other products than the product concerned. Therefore, it was necessary to establish the imports on the basis of Eurostat statistics in combination with specific data on the product concerned from a market intelligence provider (ThinkReal ⁹⁴). As the market intelligence is only available upon subscription, the Commission received an agreement to disclose this data only in ranges and/or indexed.

• (361) Before 2020, TCCP was classified under TARIC code 2919900090 which covers a broader range of products than TCPP. Since 2020, TCPP is classified under code 3824999238 and this code does not include other products. However, imports of TCPP continued to be reported under the basket code 2919900090. In order to establish the volume of imports of TCPP, the Commission used the market intelligence data of ThinkReal which contains Chinese export volumes of only TCPP. The Commission used Eurostat data combined with ThinkReal to establish the price of TCPP during the period considered. As regards TEP imports, the Commission relied on Eurostat statistics reported under TARIC code 2919900050 since this code covers only the product concerned.

• (362) The Commission informed the interested parties of the above methodology which it intended to use to establish the imports by publishing a note on 15 November 2023 ⁹⁵. In that note, the Commission described the methodology in detail and invited comments from interested parties on the methodology and the established import volumes and values. The CPCIF, one importer of the product concerned, Prochema, and one user, Kingspan, submitted comments to this note.

• (363) Kingspan stated that, to the best of its knowledge, there is no production of TEP outside of China and that the volumes of imports of TEP from third countries are most likely of Chinese origin.

• (364) Prochema brought forward information on Chinese exports collected by its Chinese partners. Prochema also reiterated its earlier arguments against imposition of measures which are addressed further in Chapter 7.2 of this Regulation.

• (365) None of the comments mentioned in recitals 362 to 364 above addressed or contested the methodology described in the Commission’s note on import statistics nor the import volumes and values established therein.

• (366) Therefore, at this stage, the Commission applies the methodology described in the note of 15 November 2023.

• (367) The Commission established the Union consumption on the basis of (a) the free market sales ⁹⁶ on the Union market of all known producers in the Union; and (b) the import into the Union from all third countries as reported by Eurostat in combination with data from the market intelligence provider as set out in recital 360, thereby also considering the data submitted by the cooperating exporting producers in the country concerned. On this basis the Union consumption developed as follows during the period considered:

Table 2

Union consumption (in tonnes)

	2019	2020	2021	2022	Investigation period
Total Union consumption (free market)	90 000 – 99 000	78 000 – 86 000	78 000 – 84 000	76 000 – 87 000	71 000 – 81 000
Index	100	91	86	89	79
Source: Union producers, Eurostat and ThinkReal.	Source: Union producers, Eurostat and ThinkReal.	Source: Union producers, Eurostat and ThinkReal.	Source: Union producers, Eurostat and ThinkReal.	Source: Union producers, Eurostat and ThinkReal.	Source: Union producers, Eurostat and ThinkReal.

• (368) The total Union consumption of the product under investigation first decreased between 2019 and 2021. This decrease coincided with a slowdown of economic activity due to lockdowns and reduced international trade flows during the COVID-19 crisis. The consumption increased slightly in 2022 but it did not reach the level of 2019 and it further decreased in the investigation period in connection with the slowdown of activity in the construction sector. Overall, during the period considered, the consumption of the product concerned decreased by 21 %.

4.4.   Imports from the country concerned

4.4.1.   Volume and market share of the imports from the country concerned

• (369) The Commission established the volume of imports on the basis of Eurostat and ThinkReal data. The market share of the Chinese imports was established by comparing import volumes with the Union free market consumption as reported in Table 2 above.

• (370) Imports into the Union from the country concerned developed as follows:

Table 3

Import volume (in tonnes) and market share

	2019	2020	2021	2022	Investigation period
Volume of imports from the country concerned in tonnes	53 000 – 62 000	40 000 – 48 000	41 000 – 47 000	57 000 – 68 000	56 000 – 66 000
Index	100	83	73	114	105
Market share on the free market	60 %	55 %	51 %	77 %	80 %
Source: Eurostat and ThinkReal.	Source: Eurostat and ThinkReal.	Source: Eurostat and ThinkReal.	Source: Eurostat and ThinkReal.	Source: Eurostat and ThinkReal.	Source: Eurostat and ThinkReal.

• (371) The volume of imports from China represented 60 % of the Union consumption in 2019. During 2020 and 2021, the volume of imports from China decreased in connection with logistic constraints and the slowdown of international trade flows resulting from the COVID-19 crisis.