Commission Implementing Regulation (EU) 2024/1896 of 11 July 2024 imposing a provisional anti-dumping duty on imports of certain polyvinyl chloride (PVC) originating in Egypt and the United States of America

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	2024/1896	12.7.2024

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 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1.   Initiation

• (1) On 15 November 2023, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of polyvinyl chloride (‘PVC’) originating in Egypt and the United States of America (‘the countries concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ² (‘the Notice of Initiation’).

• (2) The Commission initiated the investigation following a complaint lodged on 2 October 2023 by the Polyvinyl Chloride Trade Committee (‘the complainants’). The complaint was made on behalf of the Union industry of PVC in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2.   Registration

• (3) Pursuant to Article 14(5a) of the basic Regulation, the Commission should register imports subject to an anti-dumping investigation during the period of pre-disclosure unless it has sufficient evidence within the meaning of Article 5 that the requirements either under point (c) or (d) of Article 10(4) are not met.

• (4) The complainants did not request registration and the Commission found that the requirements under point (d) of Article 10(4) of the basic Regulation were not met. In addition to the level of imports which caused injury during the investigation period (‘IP’, see recital 32), there was no further substantial rise in imports thereafter.

• (5) For the reasons set out in Section 4.4.1 below, the Commission decided to cumulate the imports from the countries concerned for the purpose of the analysis described in the recitals above. An analysis of the data extracted from the Comext Database of Eurostat and the data supplied by the cooperating exporting producers in the countries concerned showed that the cumulative volume of imports from the countries concerned decreased by 41 % in the first three full months (i.e. December 2023 to February 2024) after the initiation of the investigation as compared to the same months during the investigation period. Similarly, the average monthly imports from the countries concerned during the first three months after the initiation of the investigation were 19 148 tonnes compared to the average monthly imports of 27 450 tonnes during the investigation period. Therefore, the Commission did not make the imports of PVC subject to registration under Article 14(5a) of the basic Regulation during the period of pre-disclosure.

1.3.   Interested parties

• (6) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainants, other known Union producers, the known exporting producers, the authorities of Egypt and the United States of America (‘the USA’), known importers, suppliers and users, and traders about the initiation of the investigation and invited them to participate.

• (7) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

1.4.   Sampling

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

1.4.1.   Sampling of Union producers

• (9) In its 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 sales. This sample consisted of three Union producers. The sampled Union producers accounted for 25 % of estimated production and 26 % of estimated EU sales volume of the like product. The Commission invited interested parties to comment on the provisional sample. The Commission did not receive any comment and the provisional sample was confirmed. The sample is representative of the Union industry.

1.4.2.   Sampling of importers

• (10) No unrelated importers provided the requested information or agreed to be included in the sample. The Commission therefore did not select any sample of importers.

1.4.3.   Sampling of exporting producers in Egypt

• (11) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in Egypt to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the Arab Republic of Egypt to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (12) Only one exporting producer in Egypt, TCI Sanmar Chemicals S.A.E. (‘TCI Sanmar’), provided the requested information and agreed to be included in the sample. Accordingly, the Commission decided that sampling was not necessary.

• (13) On 7 December 2023, 15 days after the deadline for providing sampling information had expired, a second Egyptian exporting producer, Egyptian Petrochemical Company (‘EPC’), came forward and requested the Commission to participate in the proceeding as an interested party. Since it found that the participation of a second exporting producer was not likely to impede the timely completion of the investigation, the Commission responded favourably to the request of EPC.

1.4.4.   Sampling of exporting producers in the United States of America

• (14) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the United States of America to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the United States of America to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (15) Four exporting producers in the United States of America provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the country concerned were consulted on the selection of the sample. No comments were received on the selection of the sample.

1.5.   Individual examination

• (16) The two American non-sampled cooperating exporting producers signalled their intention to request individual examination under Article 17(3) of the basic Regulation. However, none of them provided a questionnaire reply and thus actual requests.

1.6.   Comments on initiation

• (17) The Commission received a number of comments from interested parties on initiation and reacting to other parties’ submissions.

• (18) Following initiation, comments were received from the Government of Egypt, the Egyptian producer TCI Sanmar, the US producers Oxy Vinyls, LP and Westlake Corporation (‘Westlake’), a non-sampled Union producer Ercros, and two users, Rehau and Foamalite Ltd. (‘Foamalite’). The complainants also submitted comments rebutting the interested parties’ submissions.

• (19) The Government of Egypt (‘the GoE’) and TCI Sanmar claimed that the complainants failed to provide a fair comparison between export price and the normal value and that the complaint did not contain sufficient evidence of dumping.

• (20) The Commission disagreed. With regard to dumping, the Commission considered that the complaint included sufficient relevant evidence to initiate its investigation as the prima facie evidence pointed at dumping margins of 45,2 % for Egypt and 40,6 % to 59,4 % for the USA. Specifically, the complainants had based the export price on reasonable available information such as the Eurostat CIF average price of imports originating in Egypt into the EU and adjusted this to ex-works level, using reasonable estimates. By the same token, the normal value was established by the complainants on the basis of local prices reported by the market monitoring system ChemOrbis on the Egypt Local Price Index. Therefore, this claim was rejected.

• (21) The Government of Egypt, Oxy Vinyls, LP, TCI Sanmar and Westlake questioned the injury analysis in the complaint as the Egyptian and US imports were not entering the Union at injurious volumes or prices and Union industry was healthy and performing well. The parties also considered that the concerns about a threat of injury was baseless.

• (22) The complaint contained the evolution of the imports from the countries concerned in terms of quantities prices. The basic Regulation provides that the injury analysis shall take into account both the absolute level and the evolution of market share and prices during the period considered. The Commission considered that whereas the Union industry could have been healthy in the early part of the period considered, the complaint presented arguments why the situation deteriorated from end of 2022 and that no sufficient evidence was provided against the arguments presented in support of a possible threat of injury, in particular considering the structural overcapacity of exporters from the countries concerned.

• (23) The Government of Egypt, Oxy Vinyls, LP and TCI Sanmar claimed that the causal link was not demonstrated and that there were other alternative causes of injury. Among other causes of injury, parties mentioned energy costs, force majeure, non-subject imports from Mexico and Norway, inflation, and the export performance of the Union industry. Rehau and Foamalite claimed that Union producers may have been responsible for their own injury due to the declaration of force majeure events that restricted the supply of the product to Union users below contracted volumes and that resulted in the search of other sources of PVC outside the Union by affected users.

• (24) Ercros claimed that the causal link was demonstrated and highlighted that the price depression which affected the Union market and industry was largely and undoubtedly driven by the prices of Egyptian and US PVC, signalling 2021 as a turning point.

• (25) The Commission considered that the complaint included sufficient elements to assess the causal link at that stage and that no substantive evidence had been provided to contradict the argumentation included in the complaint.

• (26) Oxy Vinyls, LP claimed that Union producers have higher costs related to the high cost of compliance associated with numerous Union environmental and social endeavours.

• (27) The Commission considered that this allegation could have some merits if the injury was observed during the whole period concerned, but the arguments failed to explain the sudden emergence of injury during the investigation period when the alleged dumped imports surged.

• (28) Oxy Vinyls, LP and Westlake claimed that the complainants did not substantiate why the profit margin for the calculation of the underselling should be 15 %. Ercros by its part, argued that a healthy PVC Union industry requires a profit margin of 15 %. While the complainants, supported by Ercros, defended that a profit margin of 15 % was a normal profitability margin for the chemical sector, the Commission did not get evidence from other parties about which would be a reasonable profit margin that can be expected over the medium term in a cyclical industry such as PVC. The same US exporters also argued that the initiation may have been flawed because the complainants mistakenly used the EBITDA instead of the profit margin. The Commission noted that the 15 % profit margin was used in the calculations and that the complaint merely stated that this was the same percentage as the target% of EBITDA for the complainants. The Commission considered that from the comparison between different ratios in the complaint, it cannot be inferred that the complainants mistakenly used the EBITDA rather than the profit margin ³.

• (29) Foamalite complained about the possible impact over its competitiveness if the Commission imposes anti-dumping duties as it competes with an entity located in Northern Ireland that would not have to pay these in its imports from the USA. The Commission found that the United Kingdom initiated an anti-dumping investigation on S-PVC from the USA on 8 January 2024 and dismissed the claim.

1.7.   Questionnaire replies and verification visits

• (30) The Commission sent questionnaires to the sampled Union producers, the two Egyptian exporting producers that had come forward and the sampled exporting producers in the USA. The Commission published a questionnaire for importers and users in the Notice of Initiation. Questionnaires were also made available to unrelated traders outside the Union (see recitals 48 and 73). The same questionnaires were made available online ⁴ on the day of initiation.

• (31) The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, resulting injury and Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

Union producers

• — INOVYN Manufacturing Belgium SA, Evere, Belgium

• — Shin-Etsu PVC BV, Hilversum, Netherlands

• — Vynova Belgium NV, Tessenderlo, Belgium ⁵

Exporting producers in Egypt

• — TCI Sanmar Chemicals S.A.E., Port Said

• — Egyptian Petrochemical Company, Alexandria

Exporting producers in the United States of America

• — Formosa Plastics Corporation, Livingston, Essex, New Jersey

• — Westlake Chemicals, Houston, Texas

Unrelated trader

• — Tricon Dry Chemicals, LLC, Houston, Texas.

1.8.   Investigation period and period considered

• (32) The investigation of dumping and injury covered the period from 1 October 2022 to 30 September 2023 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2020 to the end of the investigation period (‘the period considered’).

2. PRODUCT UNDER INVESTIGATION, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

• (33) The product under investigation is the suspension polyvinylchloride (‘S-PVC’), not mixed with any other substance. The product concerned includes S-PVC only, it does not include emulsion polyvinylchloride (‘E-PVC’) (‘the product under investigation’).

• (34) PVC is a manmade thermoplastic polymer. The primary raw material used in the production of PVC resins is Vinyl Chlorine Monomer (VCM) which is produced by the reaction of ethylene and chlorine to produce ethylene dichloride (EDC) and then transformed into VCM by thermal cracking. S-PVC is produced through suspension technology.

• (35) PVC in its suspension form (S-PVC) is an industrial product used in a wide range of applications, for example in the manufacturing of pipes and fittings, films and foils, injection moulding and blow moulding.

2.2.   Product concerned

• (36) The product concerned is the product under investigation originating in Egypt and in the United States of America (‘USA’) (‘the countries concerned’), currently classified under CN code ex 3904 10 00 (TARIC codes 3904100015 and 3904100080). (‘the product concerned’).

2.3.   Like product

• (37) The investigation showed 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 under investigation produced and sold on the domestic market of countries concerned, and

• — the product under investigation produced and sold in the Union by the Union industry.

• (38) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

3.1.   Egypt

3.1.1.   Cooperation of exporting producers

• (39) As set out in recitals 12 and 13 above, two Egyptian exporting producers, TCI Sanmar and EPC, came forward in the investigation and provided questionnaire replies. EPC filed an incomplete questionnaire reply with essential parts missing. The Commission therefore informed EPC by letter of 16 January 2024 of its intention to apply Article 18 and base its findings on facts available for the missing information. In the same letter, it invited EPC to submit the missing information. However, EPC failed to do so, also after the Commission reiterated its request on 6 February 2024.

• (40) During the on-spot verification at the premises of EPC, which took place from 3 to 6 March 2024, the Commission found further elements that led to the application of Article 18(1) of the basic Regulation.

• (41) As EPC had failed to submit necessary information for the assessment of domestic prices, export prices and cost of production, and in accordance with Article 18(4) of the basic Regulation, by letter of 12 April 2024, EPC was informed of the reasons of the Commission’s intention to disregard the information provided and it was granted the opportunity to provide further explanations. For confidentiality reasons, the underlying details were sent only to EPC.

• (42) On 17 April 2024, EPC opposed to the application of Article 18. EPC argued it was unaware of the antidumping case until 12 December 2023, that subsequently a deadline extension request was rejected by the Commission and that it was hence hindered to participate effectively in the verification process.

• (43) EPC added that the Commission should (at least) consider the information related to export prices for the sake of determining dumping, as the Commission team verified the accuracy of all required documents (in relation to export prices) during the on-spot verification.

• (44) Moreover, EPC felt that it provided full cooperation within its available capabilities and referred to Article 15 of the WTO Anti-Dumping Agreement, according to which special regard must be given by developed country Members to the special situation of developing country Members.

• (45) The Commission disagreed with the comments made by EPC. As to EPC’s allegation of having been unaware of the investigation until 12 December 2023, the Commission recalls that the present investigation was initiated on 15 November 2023 by means of publishing a Notice of Initiation in the Official Journal of the European Union. On the same day, the Commission notified EPC and the Mission of the Arab Republic of Egypt directly on the initiation of the present investigation and invited EPC to take part in the sampling process.

• (46) As regards EPC’s allegation it had provided full cooperation within its available capabilities and its reference to Article 15 of the WTO Anti-Dumping Agreement, the Commission noted that limited capabilities of any party cannot justify the absence of information necessary for the purpose of an accurate dumping margin calculation or the impossibility to cross-check the submitted data. Moreover, the Commission recalled that it had exceptionally accepted the participation of EPC in the investigation despite the facts that EPC had not completed the sampling form (see recital 13) and that it initially came forward outside the regular deadline to do so.

• (47) Accordingly, the Commission provisionally disregarded the information provided by EPC and confirmed the use of facts available with regard to this exporting producer on the basis of Article 18(1) of the basic Regulation.

3.1.2.   Unrelated traders

• (48) According to information in the complaint, exports to the Union were made via unrelated traders, and the exporting producers were aware of the final destination of sales through these traders. The Commission requested and obtained from the two exporting producers the names and contact details of these traders. Seven unrelated traders, altogether accounting for more than 70 % of the total imports from Egypt during the investigation period, completed at least partly the questionnaire. According to the information provided, these traders re-sold the product concerned either to customers in the Union or to customers in third countries. None of them resold the product concerned to customers in Egypt.

• (49) Except to confirm that no resales of the unrelated traders entered the domestic market in Egypt, the information provided by these traders was not necessary for the determination of dumping with regard to Egypt. TCI Sanmar demonstrated the final destination of these exports in their records, in particular based on available shipping documents.

3.1.3.   Normal value

• (50) Due to the application of Article 18(1) of the basic Regulation to EPC, as described in Section 3.1.1 above, the description of the dumping margin calculation below only applied to the remaining Egyptian exporting producer, TCI Sanmar.

• (51) The Commission first examined whether the total volume of domestic sales was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market per exporting producer represented at least 5 % of its total export sales volume of the product concerned to the Union during the investigation period. On this basis, the total sales of the like product on the domestic market were representative.

• (52) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union with representative domestic sales.

• (53) The Commission then examined whether the domestic sales for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union. The Commission established that the domestic sales were representative because they represented more than 5 % of the total volume of export sales of the identical product to the Union.

• (54) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.

• (55) The normal value is based on the actual domestic price per product type, irrespective of whether those sales are profitable or not, if:

• (a) the sales volume of the product type, sold at a net sales price equal to or above the calculated cost of production, represented more than 80 % of the total sales volume of this product type; and

• (b) the weighted average sales price of that product type is equal to or higher than the unit cost of production.

• (56) In this case, the normal value is the weighted average of the prices of all domestic sales of that product type during the investigation period.

• (57) The normal value is the actual domestic price per product type of only the profitable domestic sales of the product types during the investigation period, if:

• (a) the volume of profitable sales of the product type represents 80 % or less of the total sales volume of this type; or

• (b) the weighted average price of this product type is below the unit cost of production.

• (58) The analysis of domestic sales showed that, depending on the product type, 5 % to 97 % of the domestic sales of the respective product type were profitable and that the weighted average sales price was higher than the cost of production. Accordingly, the normal value was calculated as a weighted average of the profitable sales only, in case that the domestic sales represented 80 % or less of the total sales volume of this type.

3.1.4.   Export price

• (59) TCI Sanmar exported to the Union through unrelated traders, who purchased the product concerned from TCI Sanmar and resold it to independent customers in the Union. As noted above in recital 49, TCI Sanmar demonstrated the final destination of the export sales made to unrelated traders in their records.

• (60) The export price thus established was the price actually paid or payable for the product concerned when sold to the unrelated trader, in accordance with Article 2(8) of the basic Regulation.

3.1.5.   Comparison

• (61) The Commission compared the normal value and the export price on an ex-works basis.

• (62) 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, in accordance with Article 2(10) of the basic Regulation.

• (63) TCI Sanmar and the Government of Egypt claimed that pursuant to Article 2(10)(k) of the basic Regulation, normal values should be adjusted downwards in view of the effects of a currency crisis on the economy of Egypt during the investigation period. To substantiate the claim, TCI Sanmar pointed to the evolution of a so-called parallel or black market where hard currencies such as the United States dollar (‘USD’) or the euro were traded at rates significantly higher than the official exchange rates set by the Central Bank of Egypt (‘CBE’), which was described for instance described in a Market Intelligence report issued by the US Department of Commerce on 19 September 2023 or in a study published by BNP Paribas. TCI Sanmar added that for domestic sales of the product concerned were paid in Egyptian pounds (‘EGP’). For accounting purposes, these payments were converted into USD. Due to the applicable accounting rules, these conversions had to be based on the CBE Rate.

• (64) On 22 March 2024, TCI Sanmar reiterated their claim and added that Egypt had secured an important agreement with the International Monetary Fund (‘IMF’) worth USD 8 billion. A key condition of the agreement, from the IMF’s perspective, was that the CBE allowed market forces to set the value of the EGP in order to eliminate the divergence between the official exchange rate and the so-called parallel market rate. After the CBE agreed to this condition, the official exchange rate changed from approx. 31 EGP–1 USD (on 5 March 2024) to approx. 49 EGP–1 USD (on 6 March 2024) (a fall in value of approximately 60 %).

• (65) The Commission rejected the initial and the reiterated claim. None of the claiming parties could substantiate the claims, in particular because there were no recorded historic rates of a black or parallel market. In addition, the accounting policy of TCI Sanmar prescribed the use of the official rates set by the CBE and thus confirmed the view of the Commission to use those rates.

• (66) Further to the reiterated claim, the Commission clarified that events after the investigation period could normally not be taken into account for the sake of determining dumping. When comparing export and domestic prices, the Commission has to rely solely on official exchange rates. A significant change in an exchange rate as it occurred on 6 March 2024, cannot be accepted as ex post evidence showing that such significantly changed exchange rate would indicate that it should be applied for a past period, here the investigation period.

• (67) TCI Sanmar further claimed a credit cost allowance. The Commission rejected the claim and considered that the facts invoked by TCI Sanmar warranted a downward instead of the upward adjustment of the export price claimed by TCI Sanmar. For confidentiality reasons, further details were sent only to TCI Sanmar.

• (68) Adjustments for freight, insurance, handling, credit costs, bank charges and packing costs were deducted from domestic and/or export sales prices where reported and found justified.

3.1.6.   Dumping margins

• (69) On this basis, TCI Sanmar’s provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, is 86,1 %.

• (70) As explained in the previous recitals 39 to 47, in accordance with Article 18 of the basic Regulation, for EPC, the Commission made use of the facts available. In this respect, the Commission found it appropriate to establish the dumping margin for EPC based on representative sales of the most representative product type sold to the Union by TCI Sanmar. This product type represented more than 90 % of all exports made by TCI Sanmar to the Union and in the absence of cooperation, the Commission considered that this methodology appropriately reflected the company’s potential for dumping behaviour, taking into account the procedural context in which such non-cooperation occurred and the relevant evidence on file. Thus, the calculated dumping margin amounted to 109,5 % and was applied to EPC.

• (71) All known exporting producers came forward in this investigation. On this basis, the Commission decided to establish the dumping margin for non-cooperating exporting producers at the level of the company with the highest dumping margin, which is EPC.

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

Company	Provisional dumping margin
TCI Sanmar Chemicals S.A.E.	86,1  %
Egyptian Petrochemical Company	109,5  %
All other companies	109,5  %

3.2.   United States of America

3.2.1.   Unrelated traders

• (73) Like in the case of Egypt (see recital 48), the Commission requested and obtained from the two sampled exporting producers the names and contact details of the unrelated traders through which, according to the information in the complaint, a good part of their export sales to the Union was channelled. The Commission contacted the traders directly and through the sampled exporting producers inviting them to complete a specific questionnaire designed to establish the final destination of Formosa and Westlake PVC sales. Nine unrelated traders submitted to the Commission a partly or complete reply to that questionnaire. That information was covering only a limited volume of EU sales by the sampled parties. However, the sampled parties themselves obtained additional information from their unrelated traders allowing the Commission to assess the final destination of all of Formosa’s export sales volumes and 98,5 % of Westlake’s export sales volumes. All export sales for which the EU destination could be confirmed were used in the dumping calculation.

3.2.2.   Normal value

• (74) The Commission first examined whether the total volume of domestic sales for each sampled exporting producer was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market per exporting producer represented at least 5 % of its total export sales volume of the product concerned to the Union during the investigation period. On this basis, the total sales by each sampled exporting producer of the like product on the domestic market were representative.

• (75) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union for the exporting producers with representative domestic sales.

• (76) The Commission then examined whether the domestic sales by each sampled exporting producer on its domestic market for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union. The Commission established that the domestic sales made by the sampled exporting producers were representative because they represented more than 5 % of the total volume of export sales of the identical product to the Union.

• (77) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.

• (78) The normal value is based on the actual domestic price per product type, irrespective of whether those sales are profitable or not, if:

• (a) the sales volume of the product type, sold at a net sales price equal to or above the calculated cost of production, represented more than 80 % of the total sales volume of this product type; and

• (b) the weighted average sales price of that product type is equal to or higher than the unit cost of production.

• (79) In this case, the normal value is the weighted average of the prices of all domestic sales of that product type during the investigation period.

• (80) The normal value is the actual domestic price per product type of only the profitable domestic sales of the product types during the investigation period, if:

• (a) the volume of profitable sales of the product type represents 80 % or less of the total sales volume of this type; or

• (b) the weighted average price of this product type is below the unit cost of production.

• (81) The analysis of domestic sales showed that for both exporting producers, with the exception of two product types of Westlake, less than 80 % of all of their domestic sales were profitable. Accordingly, the normal value was calculated as a weighted average of the profitable sales only for those sales. For the two product types at the exporting producer for which more than 80 % of the domestic sales were profitable, normal value was calculated as a weighted average of the prices of all domestic sales during the investigation period.

3.2.3.   Export price

• (82) The sampled exporting producers exported to the Union either directly to independent customers or, as explained in recital 73 through unrelated traders in the USA.

• (83) For the direct sales 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. For the indirect sales through unrelated traders in the USA, the export price was established on the basis of the price at which the product concerned was sold to those traders, in accordance with Article 2(8) of the basic Regulation.

• (84) The Commission compared the normal value and the export price of the sampled exporting producers on an ex-works basis.

• (85) 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, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport, credit costs, packing, discounts and handling and loading when applicable.

3.2.4.   Dumping margins

• (86) 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.

• (87) 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
Formosa Plastics Corporation	70,3  %
Westlake Chemicals	58,0  %

• (88) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin of the sampled parties, in accordance with Article 9(6) of the basic Regulation.

• (89) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 63,7 %.

• (90) To determine the methodology for calculating the residual dumping margin, i.e. the margin applicable for all other exporting producers in the USA that did not come forward during the investigation, the Commission first considered the level of cooperation of the exporting producers. 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 the statistics from Comext. The four cooperating exporting producers represented 76,5 % ⁶ of exports from the USA to the Union in the investigation period. Therefore, the level of cooperation in this case is considered low. Consequently, for all other exporting producers in the United States of America, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. The Commission decided to establish the residual dumping margin at the level of dumping found for the sampled exporting producer with the highest weighted average dumping margin on the most representative product type.

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

Company	Provisional dumping margin
Formosa Plastics Corporation	70,3  %
Westlake Chemicals	58,0  %
Other cooperating companies	62,1  %
All other companies	77,0  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (92) The like product was manufactured by 12 producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation. Three of the Union producers are the complainants.

• (93) The total Union production during the investigation period was established at 3 842 081 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as the reply to the macro questionnaire, information gathered during verification visits to sampled producers, questionnaires submitted by other cooperating producers and Eurostat official statistics. As indicated in recital 9, the three sampled Union producers represented 25 % of the total Union production of the like product.

4.2.   Determination of the relevant Union market

• (94) 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 existence of tolling agreements and upstream activities of the Union industry’s production of the like product had to be considered in the analysis.

• (95) The Commission found that two out of the three producers in the sample operate under tolling agreements. Under each tolling agreement, the entrepreneur was another entity of the group that was responsible for acquiring the input materials and for selling the produced like product with the sampled producer being remunerated via a tolling fee. Therefore, the financial information of two sampled producers was insufficient to carry out the injury analysis as the financial results would be quite stable reflecting the tolling fee and not the economic results of the entrepreneurs. Thus, for these two sampled producers, the Commission obtained access to the records of the entrepreneurs and information about the allocation keys so that it could verify the full financial outcome of the production of the like product in the sampled sites. This meant that the Commission was able to verify the financial results obtained by the entrepreneurs from the manufacturing of PVC in the sampled sites by the tollers.

• (96) S-PVC is a manmade thermoplastic polymer that results from the polymerisation of vinyl chloride. Vinyl Chlorine Monomer (VCM) is the primary raw material and is produced by thermally cracking ethylene dichloride (EDC), a product that is made by the direct chlorination or oxychlorination of ethylene. One of the sampled producers buys ethylene, chlorine and/or EDC from third party suppliers. For the other two sampled producers, their respective entrepreneurs may also procure EDC in the market (and regularly do so) but their groups have the capacity to produce EDC using chlorine produced by a joint entity where each group has a 50 % stake. Chlorine is bought at a transfer price which has remained stable during the period considered and that is incorporated into a trading model accepted by different tax authorities within the Union as being at arm’s length price.

• (97) The Commission received comments from Westlake arguing for the inclusion in the injury analysis the related caustic soda business. Caustic soda and chlorine are produced by electrolysis of salt. Caustic soda is widely utilized in the chemical industry as a fundamental material. The complainants stated that caustic soda is a co-product of the production of chlorine, both produced in close quantities during the Chlor-Alkali process ⁷, contesting that caustic soda may be considered co-product or the by-product of PVC. The Commission noted that to the extent that not all PVC producers are engaged in the production of chlorine, this is a very strong indicator that the two industries, although both associated with the Chlor-Alkali process, must be considered as separated industries ⁸.

• (98) Westlake also claimed that there are three different product segments in the S-PVC market (‘commodity’, ‘extender’ and ‘speciality’) and that the investigation did not properly distinguish between them. Westlake alleged that the three segments had been recognised by the Commission before in the context of competition matters. The Commission noted that the document mentioned by Westlake indicated that speciality and extender were niche markets ⁹. By its part, the complainants argued that commodity, extender and speciality S-PVC have the same basic chemical characteristics and that are merely product types and that the Product Control Numbers (PCN) proposed by the Commission were sufficiently precise to account for differences affecting price comparability or injury and causation determination. The complainants also claimed that Westlake did not provide evidence that one or more supposed segments were more likely to be concerned than others by the dumped imports, that no evidence was offered proving that price differences cannot be addressed by the PCN structure and that there was no evidence that the products are not interchangeable. The Commission noted that the sampled Union producers produce the most common general-purpose S-PVC (referred to as commodity by Westlake), that the main determinant of the use of S-PVC was its K-value ¹⁰; and that the called commodity S-PVC would be captured by PCNs B and C in the investigation. In this regard, the Commission found that the term ‘speciality’ is more a commercial classification or term and not an industry standard (as a product that would be called ‘speciality’ by one producer may be considered ‘commodity’ by another).

• (99) The Commission noted that the differences in the production process are minor as it is evident from the fact that one sampled producer can also use the same lines to produce some speciality S-PVC ¹¹. The Commission noted that while it was known to Westlake that the three sampled Union producers did not operate in the three alleged segments, it did not make any comment to the proposed Union sample. Moreover, the Commission did not find any evidence of relevance of the alleged segments on prices, costs or market segmentation that was not captured by the PCN structure. The claim made by Westlake about the existence of three segments was, therefore, dismissed.

4.3.   Union consumption

• (100) The Commission established the Union consumption on the basis of:

• — the verified sales of the sampled Union producers,

• — the sales of non-sampled cooperating Union PVC producers, obtained from the complainants,

• — the sales of other Union PVC producers, obtained in submissions made to the Commission,

• — the sales of the rest of Union PVC producers extrapolated on the basis of their proportion of PVC production in the Union in the last official statistics data (PRODCOM),

• — the imports of PVC into the Union as recorded in the Comext database of Eurostat.

• (101) Union consumption developed as follows:

Table 1

Union consumption (tonnes)

	2020	2021	2022	IP
Total Union consumption	3 952 433	4 452 620	3 636 723	3 223 419
Index	100	113	92	82
Source: Union industry, sampled Union producers, other Union producers, Eurostat.	Source: Union industry, sampled Union producers, other Union producers, Eurostat.	Source: Union industry, sampled Union producers, other Union producers, Eurostat.	Source: Union industry, sampled Union producers, other Union producers, Eurostat.	Source: Union industry, sampled Union producers, other Union producers, Eurostat.

• (102) The Union consumption of the like product was established by combining information on EU sales from Union producers (as described in recital 100) and import data from Eurostat. As the product under investigation includes S-PVC only, the imports of S-PVC were estimated to be 96 % of the imports under CN code 3904 10 00, the rest being imports of E-PVC. The division of imports under CN code 3904 10 00 between the two types of PVC was done based on the market intelligence included in the complaint.

• (103) The total Union consumption has a downward trend from 2021, a year that benefited from a strong recovery post COVID-19 pandemic. From 2020, the total Union consumption has decreased by 18 % affected by a current contraction in the construction sector in the Union.

4.4.   Imports from the countries concerned

4.4.1.   Cumulative assessment of the effects of imports from the countries concerned

• (104) The Commission examined whether imports of S-PVC originating in the countries concerned should be assessed cumulatively, in accordance with Article 3(4) of the basic Regulation.

• (105) The margin of dumping established in relation to the imports from Egypt and the USA were above the de minimis threshold laid down in Article 9(3) of the basic Regulation. The volume of imports from each of the countries concerned was not negligible within the meaning of Article 5(7) of the basic Regulation. Market shares in the investigation period were 1,92 % and 8,30 % respectively.

• (106) The conditions of competition between the dumped imports from Egypt and the USA and between the dumped imports from the countries concerned and the like product were similar. More specifically, the imported products competed with each other and with the S-PVC produced in the Union because industrial users have access to both Union producers’ sales teams and traders in a similar manner and both serve similar categories of customers.

• (107) Therefore, all the criteria set out in Article 3(4) of the basic Regulation were met and imports from Egypt and the USA were examined cumulatively for the purposes of the injury determination.

4.4.2.   Volume and market share of the imports from the countries concerned

• (108) The Commission established the volume of imports on the basis of Eurostat data. The market share of the imports was established on the basis of available statistics by product and estimating consumption for the investigation period on the basis of the latest data available (2022).

• (109) Imports into the Union from the countries concerned developed as follows:

Table 2

Import volume (tonnes) and market share

	2020	2021	2022	IP
EGYPT	EGYPT	EGYPT	EGYPT	EGYPT
Volume of imports	7 252	24 566	44 562	62 004
Index (2020 = 100)	100	339	614	855
Market share	0,18  %	0,55  %	1,23  %	1,92  %
Index (2020 = 100)	100	300	668	1 048
UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)
Volume of imports	33 737	41 430	127 713	267 390
Index (2020 = 100)	100	123	379	793
Market share USA	0,85  %	0,93  %	3,51  %	8,30  %
Index (2020 = 100)	100	109	411	972
COUNTRIES CONCERNED	COUNTRIES CONCERNED	COUNTRIES CONCERNED	COUNTRIES CONCERNED	COUNTRIES CONCERNED
Volume of imports from the countries concerned	40 989	65 996	172 275	329 394
Index (2020 = 100)	100	161	420	804
Market share countries concerned	1,04  %	1,48  %	4,74  %	10,22  %
Index (2020 = 100)	100	143	457	985
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (110) In absolute terms the imports from the countries concerned increased during the period considered by 288 405 tonnes. In parallel, the total market share of the imports of the countries concerned increased by 9,18 percentage points (imports in the investigation period were eight times higher than in 2020). Egyptian imports increased by 54 750 tonnes during the period considered and reached a market share of 1,92 %. US imports increased by 233 653 tonnes during the period considered and reached a market share of 8,30 %. Imports from the countries concerned reached a market share of 10,22 % in the investigation period.

4.4.3.   Prices of the imports from the countries concerned and price undercutting / price suppression

• (111) The Commission established the prices of imports on the basis of Eurostat data. Price undercutting of the imports was established on the basis of CIF prices obtained from the sampled exporting producers (see recitals 69 and 87).

• (112) The average price of imports into the Union from the countries concerned developed as follows:

Table 3

Import prices (EUR/tonne)

	2020	2021	2022	IP
EGYPT	EGYPT	EGYPT	EGYPT	EGYPT
Average price	688	1 449	1 353	926
Index	100	211	197	135
UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)	UNITED STATES OF AMERICA (USA)
Average price	821	1 525	1 405	903
Index	100	186	171	110
COUNTRIES CONSIDERED	COUNTRIES CONSIDERED	COUNTRIES CONSIDERED	COUNTRIES CONSIDERED	COUNTRIES CONSIDERED
Weighted average price	798	1 497	1 392	907
Index	100	188	174	114
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (113) The average price of the Egyptian imports sharply increased in 2021, reaching 1 449 EUR/tonne (from 668 EUR/tonne in 2020) and then slightly decreased to 1 353 EUR/tonne in 2022 and 926 EUR/tonne in the investigation period. The average price of the US imports followed a similar trend with a sharp increase in 2021, reaching 1 525 EUR/tonne (from 821 EUR/tonne in 2020) and then gradually decreased to 1 405 EUR/tonne in 2022 and 903 EUR/tonne in the investigation period.

• (114) During the period considered, the average unit price of the dumped imports from the countries concerned increased by 14 %. In 2020 and 2021, imports from the countries concerned were priced above the observed Union sale prices of the sampled producers (by 16 % and 27 % respectively), as shown in Tables 3 and 7. In 2022 and during the investigation period, however, import prices were around 11 % and 20 % lower compared to Union prices.

• (115) The Commission determined the price undercutting during the investigation period by comparing:

• — the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level, and

• — the corresponding weighted average prices per product type of the imports from the sampled exporting producers to the first independent customer on the Union market, established on a CIF basis, with appropriate adjustments for customs duties and post-importation costs.

• (116) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ hypothetical turnover during the investigation period. It showed a weighted average undercutting margin between 25 % and 35 % for Egyptian producers, a weighted average undercutting margin between 30 % and 35 % for the US producers and a cumulative weighted average undercutting between 27 % and 33 % for the sampled producers in the US and Egypt combined.

• (117) In any event, regardless of the findings on undercutting, the Commission observed that the dumped imports also lead to significant price suppression (as reflected by the underselling margins) during the IP, when the Union industry sold below its cost of production.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (118) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (119) As mentioned in recital 9, sampling was used for the determination of possible injury suffered by the Union industry.

• (120) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the macro questionnaire submitted by the complainants which the Commission updated with information provided by other producers, information obtained during the verification visits and Eurostat data. The data for the rest of Union’s producers was estimated on the basis of market intelligence and other Eurostat statistics by product information as mentioned in recital 100. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

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

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

4.5.2.   Macroeconomic indicators

4.5.2.1.   Production, production capacity and capacity utilisation

• (123) The total EU production is estimated on the basis of Eurostat data for the like product (Prodcom code 2016.30.10). Prodcom statistics are published annually by Eurostat and the last available figure is for 2022. The production of the Union industry for the investigation period was established by adding the production of all sites in the Union of the complainants and other producers which have provided detailed information to the Commission, and assuming the same relative weight as the one observed in 2022 for the rest.

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

Table 4

Production, production capacity and capacity utilisation

	2020	2021	2022	IP
Production volume (tonnes)	4 953 948	4 976 725	4 125 375	3 842 081
Index	100	100	83	78
Production capacity (tonnes)	5 455 000	5 455 000	5 555 000	5 555 000
Index	100	100	102	102
Capacity utilisation	91 %	91 %	74 %	69 %
Index	100	100	82	76
Source: Sampled Union producers, other Union producers, Eurostat, market intelligence about other producers’ capacity.	Source: Sampled Union producers, other Union producers, Eurostat, market intelligence about other producers’ capacity.	Source: Sampled Union producers, other Union producers, Eurostat, market intelligence about other producers’ capacity.	Source: Sampled Union producers, other Union producers, Eurostat, market intelligence about other producers’ capacity.	Source: Sampled Union producers, other Union producers, Eurostat, market intelligence about other producers’ capacity.

• (125) The production in the like product in the Union has a downward trend influenced by the economic impact of higher inflation and interest rates, which have significantly affected the construction sector, which is the main customer of the like product.

• (126) Production capacity has remained relatively stable. Capacity increases in the chemical industry takes long time to plan and execute due to environmental and safety concerns. The observed increase in 2022 is largely explained by one sampled producer and results from a reorganisation in search of higher efficiency. A production site was closed in the Union prior to 2020 and one of the three closed production lines was transferred to a remaining site. Due to the time gaps between closure of the site and installation of the new line, the trend shows a capacity increase while in the long run, the sampled producer has reduced its capacity.

• (127) Capacity utilisation remained stable in 2020 and 2021 and showed a downward trend from 2022. The capacity utilisation rate of 69 % is low for chemical processes as any utilisation around 50 % per line poses significant risks in terms of asset deterioration and safety. The production lines are not designed, in the Union or in the countries concerned, to fluctuate in their production flows, and producers face obstacles to close and re-start a line to accommodate demand. The Commission received estimates that closing a line for less than six months would likely not be economically viable and the experience during the COVID-19 pandemic shows that chemical lines could not be closed even when there was low demand for the product concerned.

4.5.2.2.   Sales volume and market share

• (128) The sales of the Union industry were established using a methodology similar to the one applied for the production data. The sales during the investigation period are estimated considering the data known from the complainants and other producers which have provided detailed information to the Commission and considering the representativity of this subgroup in terms of production. This approach has the advantage of following the same principle but omits the impact of possible changes in stock volumes. Given that the Union industry has relatively low levels of stock (about 2-3 weeks), the Commission considered this a reasonable assumption.

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

Table 5

Sales volume and market share

	2020	2021	2022	IP
Total sales volume on the Union market (tonnes)	3 593 662	3 981 285	3 120 959	2 571 820
Index	100	111	87	72
Market share	91 %	89 %	86 %	80 %
Index	100	98	94	88
Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.

• (130) The sales volume on the Union market varied significantly during the period considered due to successive impacts of the pandemic, the strong economic recovery, and the emergence of an energy crisis in 2022. In this context, the analysis of the market share of the Union industry provides a clearer pattern. The overall adverse trend in market share is clearly visible in 2022 when the Union industry experienced a significant loss of market share that duplicated the one experienced the prior year (index went down 2 points in 2021 and 4 points in 2022) and aggravated during the investigation period (index went down by 6 points). Overall, the market share of Union industry decreased by 12 % in the period considered.

• (131) The loss of market share in a weak market aggravated the impact of the imports of the like product from the countries concerned, that as described in recital 110 gained market share.

• (132) The Commission received comments from users and exporting producers indicating that the loss of market share by the Union industry was an indication of its loss of competitiveness and insufficient attention to customers’ needs. The Commission found that the imports from other countries than the countries concerned have not experienced the same increased in market share which seems to indicate that the loss of competitiveness could have been only vis-à-vis producers of the like product located in the countries concerned and that it was part of its investigation to examine whether it derived from unfair trade practices. As regards customers’ needs, the Commission noted that users relied on purchases of the like product from both Union’s producers and producers from the countries concerned, which is a strong indication that the Union industry continues to serve its customers in a similar and comparable manner.

4.5.2.3.   Growth

• (133) The Union consumption decreased by 18 % during the period considered, while the sales volume of the Union industry in the Union market decreased by 28 %. However, the consumption was very volatile, with a sharp increase in 2021, as a consequence of the strong post-pandemic economic recovery in the Union, of 11 % in volumes; and a modest reduction vis-à-vis 2020 in 2022 when the situation returned to more usual economic behaviour by users and consumers and consumption was 13 % less than in 2020. As a consequence, the Union industry lost market share, contrary to the market share of the imports from the countries concerned that increased by 885 % during the period considered, reaching 10,22 % in the investigation period (from 1,04 % in 2020).

4.5.2.4.   Employment and productivity

• (134) The number of employees of the Union industry was established using a methodology similar to the one applied for production and sales data. The data on employment and productivity was established on the basis of information provided by the complainants, responses by other Union’s producers and estimations based on Eurostat data.

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

Table 6

Employment and productivity

	2020	2021	2022	IP
Number of employees	4 135	4 068	3 975	4 014
Index	100	98	96	97
Productivity (tonnes/employee)	1 198	1 223	1 038	957
Index	100	102	87	80
Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.	Source: Sampled Union producers, other Union producers, Eurostat.

• (136) The number of employees remained relatively stable during the period considered (– 3 %). This is consistent with a stable capacity of production as the number of employees needed to operate the plants do not fluctuate in line with the capacity utilisation rate. Similarly, the plants are designed to be operated full time in work shift patterns, and producers do not have flexibility to operate less days per week to accommodate production to demand.

• (137) The productivity per employee took an adverse negative term in 2022 and that was further aggravated during the investigation period. In a context of rigidity in terms of number of employees, the low levels of sales and thus production, resulted in a context of low productivity. Overall, the productivity in tonnes per employee decreased by 20 %.

• (138) As is common in the chemical industry, productivity per employee is best shown by quantities produced per employee. The Commission received comments from a producer located in the USA suggesting that the productivity should be indicated in value per employee. The Commission notes that the proposed ratio is unusual in a context of price volatility created by the concatenation of the COVID pandemic, the strong recovery and the energy crisis. The proposed ratio would provide a measure of productivity that would hide the reality by mixing volumes and prices and would hinder the analysis to determine if there is injury to the Union’s producers. The Commission therefore dismissed the proposal.

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

• (139) All dumping margins were significantly above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the countries concerned.

• (140) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

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

Table 7

Sales prices in the Union

	2020	2021	2022	IP
Average unit sales price in the Union on the total market (EUR/tonne)	690	1 177	1 566	1 134
Index	100	170	227	164
Unit cost of production (EUR/tonne)	677	967	1 354	1 162
Index	100	143	200	172
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (142) The average unit sales price in the Union was very volatile during the period considered. The strong post-pandemic recovery of 2021 resulted in an increase in prices that exceeded the remarkable increase in costs. The situation did not stay for long as the Russia’s war of aggression of Ukraine contributed to an energy crisis in the Union and a subsequent large increase in costs that was largely absorbed by an increase in the sales price. While the situation of the sampled Union producers was still financially sound with sales prices covering the full cost of production, the situation quickly deteriorated at the end of 2022, when the sampled producers were already having difficulties to have all costs absorbed by the sales prices. During the investigation period, the cost of production adjusted once the energy crisis subdued but the sales price decreased even more as shown in Table 7 (in the investigation period, the cost of production went down by 14 % but the average sale price went down even further by 28 %). As a result, the sampled Union producers were operating at a loss during the investigation period, signalling the magnitude of the impact of the dumped imports on the pricing power of the sampled Union producers, who became price takers in a market influenced by large volumes of dumped imports from Egypt and the US.

• (143) Overall, during the period considered, sales prices increased by 64 % and costs of production by 72 %.

4.5.3.2.   Labour costs