Commission Implementing Regulation (EU) 2024/1923 of 10 July 2024 imposing a provisional anti-dumping duty on imports of titanium dioxide originating in the People’s Republic of China

• (295) In addition, one non-sampled Union producer, Venator, closed two of its plants in the Union: Venator Duisburg and Venator Scarlino. The decisions concerning the closure of these plants were taken in June 2023 and in February 2024 and therefore the effect of these plant closures on the volume of production and on production capacity was not yet visible or only visible to a limited extent during in the investigation period.

• (296) The capacity utilisation increase observed in 2021, while indeed prompted by increase in net production volumes due to increased demand during the Covid-19 pandemic, is thus outsized because of the drop in overall capacity. Production volumes and capacity utilisation then drop in 2022 and especially in the investigation period, partly following the trend of the overall decrease in demand, but also due to the loss of market share to Chinese imports, as explained below.

4.5.2.2.   Sales volume and market share

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

Table 6

Sales volume and market share

	2020	2021	2022	Investigation period
Sales volume on the Union market (tonnes)	604 643	680 395	559 502	451 583
Index	100	113	93	75
Market share	49 %	53 %	49 %	47 %
Index	100	108	100	95
Source: Macro questionnaire provided by the complainant and Eurostat.	Source: Macro questionnaire provided by the complainant and Eurostat.	Source: Macro questionnaire provided by the complainant and Eurostat.	Source: Macro questionnaire provided by the complainant and Eurostat.	Source: Macro questionnaire provided by the complainant and Eurostat.

• (298) Union industry sales volume increased in 2021 by 13 percentage points compared to 2020, mainly due to the aforementioned increase in demand prompted by ‘stay-at-home’ economy during Covid-19 lockdowns and the decrease in pressure exerted by dumped Chinese imports in that year. As already explained above, the demand for TiO2 started decreasing in 2022 after the high demand in 2021. As the shipping crisis was abating at the same time, the Chinese imports started increasing, both in absolute terms and in market shares, which resulted in the precipitous drop of Union sales volumes.

• (299) Market shares also reflect such market reality. In the absence of Chinese dumped imports during the surge in demand in 2021, the Union industry gained 4 percentage points in market share. In the shrinking market of 2022 and the investigation period, with ever increasing volumes of dumped imports from China, the Union industry first lost 4 percentage points in market share in 2022, and further 2 percentage points in the investigation period.

4.5.2.3.   Growth

• (300) As explained above, due to special circumstances caused by Covid-19 pandemic (‘stay-at-home’ economy due to lockdowns in part of 2020 and in 2021, and the shipping crisis in 2021), Union industry was able to profit from peak demand in 2021 with Chinese imports decreasing that year. This temporarily slowed the decline of the Union industry which, albeit in the shrinking market of 2022 and the investigation period, lost significant market share in favour of Chinese imports.

4.5.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2020	2021	2022	Investigation period
Number of employees	5 105	4 915	4 838	4 787
Index	100	96	95	94
Productivity (tonne/FTE)	159	172	154	117
Index	100	108	97	74
Source: Macro-questionnaire provided by the complainant.	Source: Macro-questionnaire provided by the complainant.	Source: Macro-questionnaire provided by the complainant.	Source: Macro-questionnaire provided by the complainant.	Source: Macro-questionnaire provided by the complainant.

• (302) Union industry steadily decreased its workforce throughout the period considered, as its production and sales volumes decreased.

• (303) Productivity developed in line with the changes in production and employment. It decreased by 26 % over the period considered, with a temporary increase in 2021, thanks to the increase in Union industry’s production and sales due to above mentioned exceptionally favourable conditions in that year.

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

• (304) All dumping margins were 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 country concerned.

• (305) 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

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

Table 8

Sales prices in the Union

	2020	2021	2022	Investigation period
Average unit sales price in the Union on the free market (EUR/ tonne)	2 277	2 432	3 076	2 990
Index	100	107	135	131
Unit cost of production (EUR/ tonne)	2 010	2 203	3 025	3 442
Index	100	110	151	171
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (307) Table 8 above shows that the period of 2021 onwards was a period of continuous costs increases, driven mainly by increasing costs of the principal raw materials and energy. This was particularly pronounced in 2022 and the investigation period, when global inflationary pressures increased significantly. The complainant claimed that, even though the Russian invasion of Ukraine in February 2022 caused a large increase in energy costs in the Union, the main factor which influenced the increase in costs of production is the rise in costs of the main raw material, titanium ores.

• (308) This observed increase in cost of production was thus met by an increase in prices in 2021 and 2022, when the Union industry was still able to keep their sales prices above their costs of production. As the Table 8 above shows, however, the gap between the cost of production and the sales price was narrowing more and more each year. Finally, in the investigation period, despite further significant cost increase compared to 2022, the Union producers could not only no longer keep their sales prices above their cost of production, but even had to decrease their prices compared to 2022 to retain some market share.

• (309) Despite the demand for TiO2 being indeed the lowest in the investigation period, imports from several sources (such as UK and Mexico, see Table 12 below) managed to increase their prices compared to 2022, while the prices of imports from other sources decreased only slightly. The most pronounced drop in prices, and at the same time the most pronounced increase in market shares came from Chinese imports, which thus clearly exerted significant pressure on the Union industry to decrease their own prices.

4.5.3.2.   Labour costs

• (310) The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 9

Average labour costs per employee

	2020	2021	2022	Investigation period
Average labour costs (EUR/FTE)	63 811	67 261	68 562	67 756
Index	100	105	107	106
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (311) Average labour cost per employee increased by 6 % over the period considered.

4.5.3.3.   Inventories

• (312) Stock levels of the three sampled Union producers developed over the period considered as follows:

Table 10

Inventories

	2020	2021	2022	Investigation period
Closing stocks (tonnes)	74 928	49 858	60 945	49 762
Index	100	67	81	66
Closing stocks as a percentage of production	9,3	5,9	8,2	8,9
Index	100	64	89	96
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (313) The level of inventories in absolute terms and as a percentage of production decreased by 33 % and 36 %, respectively, in 2021 due to favourable conditions where the Union industry was able to increase their sales volumes and market share. As the market began shrinking in 2022, volume of inventories increased again and not all the foreseen production was sold. In the investigation period the inventories decreased again as the production volumes were being reduced too. Since sales volumes were decreasing with the shrinking market in both 2022 and the investigation period, inventories as percentage of production began increasing again, reaching in the investigation period almost the same level that they were at in 2020.

4.5.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

• (314) Profitability, cash flow, investments and return on investments of the [sampled] Union producers developed over the period considered as follows:

Table 11

Profitability, cash flow, investments and return on investments

	2020	2021	2022	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	7,9  %	9,8  %	5,1  %	–11,7  %
Index	100	125	65	- 148
Cash flow (EUR)	92 461 606	124 892 941	3 767 112	-4 293 138
Index	100	135	4	-46
Investments (EUR)	37 870 922	36 314 534	39 542 712	43 030 210
Index	100	96	104	114
Return on investments	53 %	41 %	2 %	-67  %
Index	100	79	5	- 127
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (315) The Commission established the profitability of the three sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales.

• (316) As shown in Table 8 above, the gap between Union industry’s sales prices and their costs of production was narrowing in each year of the period considered, whereas in the investigation period the Union industry even had to decrease their sales prices below the increasing cost of production. This shows that while price suppression was present during the period considered, it turned into price depression in the investigation period.

• (317) The imbalance of the increasing cost and supressed prices translated into the erosion in profitability over the period considered, with year 2021 again being the exception, as explained below.

• (318) The increase in profitability in 2021 is furthermore explained by the fact that, even though net profit on a unit sale in 2021 (EUR 229, the difference between unit sales price and unit cost of production) was lower than net profit on a unit sale in 2020 (EUR 268), the cash flow still rose because of an increase in sales volumes.

• (319) As the Union industry’s sales were decreasing in 2022 and the investigation period, and its prices kept being suppressed in 2022 and depressed in the investigation period, its profitability fell by 4,8 percentage points in 2022 and by further 16,8 percentage points in the investigation period, turning sharply to the negative.

• (320) Investments decreased by -4 % in 2021, before apparently increasing by +8 % in 2022 and further +10 % in the investigation period. However, this trend of increase is misleading, and the Commission was able to verify that this apparent increase in 2022 and the investigation period can be squarely attributed to one investment of around 10 million EUR for capacity expansion, spread across 2022 and the investigation period, which one Union producer had previously committed to make and could not reasonably cancel. As the producer demonstrated, the planning, groundwork, and ordering of equipment was all made before the period concerned. Once the equipment was delivered, it had to be installed, because it would have been more expensive to leave it unused and exposed to the elements. Without this investment, the overall investment figures of the sampled Union producers would be showing a declining trend similar to other main injury indicators.

• (321) The return on investments is the profit in percentage of the net book value of investments. In light of the developments described above, it was continuously decreasing throughout the period considered, falling from a healthy +53 % in 2020 to a deep negative -67 % in the investigation period.

• (322) The ability of the Union industry to raise capital had been severely affected by the erosion of the profitability as well as of the cash flow incurred over the period considered.

4.5.4.   Conclusion on injury

• (323) All the main injury indicators showed a negative trend during the period considered and, although the situation of the Union industry temporarily improved in 2021, the injury indicators declined in 2022 and then sharply declined in the investigation period.

• (324) The production volume of the Union industry decreased by 31 % and its sales volume decreased by 25 % between 2020 and the investigation period. This decrease was more significant than the decrease of the Union consumption, which decreased by 22 % during the period considered. Consequently, the market share of the Union industry dropped from 49 % in 2020 to 47 % in the investigation period with a temporary increase in 2021 and beginning of 2022.

• (325) At the same time, Chinese imports increased in volume by 17 % during the period considered and the Chinese market share increased from 15 % in 2020 to 22 % in the investigation period. Imports from China temporarily dropped by 5 % in volume due to the shipping crisis between 2020 and 2021. Being temporarily shielded from cheap imports from China, and with increasing demand during the Covid-19 pandemic, the Union industry could increase its sales quantities and sales prices, achieving unexpectedly high profits in 2021. However, this positive trend was due to exceptional circumstances, and it was reversed by the investigation period, when the sales quantities of the Union industry dropped significantly (by 38 percentage points between 2021 and the investigation period) and its profitability plummeted (from 10 % in 2021 to -12 % in the investigation period).

• (326) In addition, the Union industry was faced with a significant increase in the cost of production, which rose by 71 % over the period considered. The increase in cost was driven mainly by higher costs of the principal raw materials and energy. The Union industry, however, could not increase their sales prices sufficiently to offset this major cost increase. Their sales prices increased only by 31 % over the period considered. The prices peaked in 2022, but markedly decreased in the investigation period, despite the costs of production continuing to rise. As a result, the Union industry became loss making in the investigation period. Similar negative effects are seen in cash flow and return on investment.

• (327) As already explained in recital (316) above, the Commission concluded that Chinese dumped imports were exerting price suppression on the Union industry throughout the period considered, and price depression in the investigation period.

• (328) In conclusion, although the extraordinary circumstances in 2021 allowed the Union industry to perform well, in the shrinking market of 2022 and the investigation period, Chinese imports were increasing and gaining market share, supressing the Union industry’s prices, while its costs of production was increasing. This is particularly evident in the investigation period, when the prices of Chinese imports decreased by one quarter compared to 2022.

4.5.4.1.   Comments by the parties

• (329) Several parties contested the existence of injury to the Union industry.

• (330) China National Coatings Industry Association (‘CNCIA’), an association representing exporting producers, claimed that there was no injury to the Union industry, citing certain segments of annual reports of several Union producers, notably Cinkarna, one of the non-sampled Union producers. CNCIA thus claimed that: (i) Cinkarna maintained maximum production levels according to its 2022 annual report, (ii) Kronos and Cinkarna increased their total value of sales in 2021 and 2022, (iii) Cinkarna, Tronox, and Venator reported increases in prices and/or revenue in 2022 compared to prior years, (iv) Cinkarna reported increasing profit and EBITDA in 2022 compared to 2021, and (v) Cinkarna planned to double its level of investments in 2023.

• (331) The Commission noted on the outset that, while different producers might be performing better or worse to a varying degree, performance of one producer (Cinkarna), highlighted in points (i), (iv), and (v) above, is not necessarily indicative of the performance of the whole Union industry. This is precisely the reason why the Commission selects a representative sample of the Union producers, to draw conclusion on the microeconomic indicators on the basis of this sample. Moreover, the Commission’s analysis is focused solely on the economic indicators related to the product under investigation which requires a more granular analysis than simply looking at the general figures in the annual report of the Union producer. If an interested party would be of the opinion that the proposed sample would not have been representative for the Union industry as a whole because one of the companies included in the sample is performing much worse than the rest due to any specific circumstances, or vice versa, such party should express its opposition to the proposed sample of Union producers at the start of the investigation, which CNCIA did not do.

• (332) Similarly, the Commission noted that the assessment under points (ii) and (iii) above are partial, taking into account only some of the injury indicators without considering them in the context of the total situation of the Union industry and the Union market, as the Commission does when reaching its conclusions in anti-dumping investigations. As demonstrated in Table 8 above, average unit sales prices of the Union industry did increase both in 2021 and in 2022. This increase in prices was, however, prompted by the need to maintain profitability in light of production costs rising in tandem. Furthermore, the Commission indeed found that the overall value of sales of the Union industry did increase in 2022 compared to 2021. This does not equate, however, to improved performance on the market as CNCIA suggested, since total sales volumes were decreasing. Examining in isolation the total value of sales in a given year is thus not informative.

• (333) The Commission thus concluded that the elements highlighted by CNCIA, listed in recital (330) above, albeit factually true, do not invalidate the Commission’s conclusions on the situation of the Union industry as a whole.

• (334) CNCIA further pointed out that in its decision on terminating the anti-dumping investigation on imports of tartaric acid originating in China ¹⁰⁸, the Commission found no injury even though the Union industry’s market share in that case fell by 21 %, compared to only 2 percentage point drop in this case. As stated in recital (332) above, the Commission considers all the injury indicators holistically, in the context of the overall situation of the Union industry and the Union market, which are naturally different in each investigation, so final conclusions are made on the case-by-case basis. The Commission noted in that regard that CNCIA is focussing only on one element of the aforementioned investigation, while the decision to terminate was actually predicated on multiple factors, most notably the profitability of the Union producers ¹⁰⁹. In any case, the specific circumstances of that case have no bearing on the circumstances in the present investigation.

• (335) CNCIA additionally claimed that the drop in production observed after 2021 can be attributed to the closure of plants described in recitals (294) and (295) above. As is evident from the macro-questionnaire submitted by the complainant, however, almost all of the Union producers’ production volumes decreased both in 2021 and 2022 year-on-year, and not just in those three plants. The Commission thus rejected this claim as unfounded.

• (336) A user, PPG Industries Europe Sarl (‘PPG’), further claimed that there is no price suppression, because Venator decided to increase prices globally, including in the Union, at the beginning of 2024 due to the need to ‘start the process of recovering margins to sustainable levels’, citing Venator’s press release from February 2024 ¹¹⁰. This is, however, not relevant in the context of the above analysis, as these claims by Venator were made after the investigation period, whereas all the above analysis and assessments are backward-looking, into the investigation period and the three prior years. Furthermore, no conclusion on price suppression can be drawn from the mere fact that one Union producer announced price increases. The Commission thus rejected this claim.

• (337) On the basis of the above, the Commission concluded at this stage that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

5. CAUSATION

• (338) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: imports from other third countries, export performance of the Union producers, and other factors, like global decline in consumption following the Covid-19 pandemic, forecasted improvement in market conditions, rising cost of production, and ban on the use of food-grade TiO2 in the Union.

5.1.   Effects of the dumped imports

• (339) As explained in recital (271) above, Union consumption increased during the Covid-19 pandemic, whereby the lockdowns in the Union prompted people to renovate their homes, which resulted in increased demand for TiO2 in 2020 and especially in 2021. Such pronounced demand uptake was followed by an equally pronounced drop in demand observed in 2022 and the investigation period. While this drop was mainly driven by de-stocking following bulging demand in 2020 and 2021, it was further exacerbated by the general inflationary pressures which started in 2022 and likely the fears of market instability caused by Russian invasion of Ukraine.

• (340) As shown in Table 3, Chinese imports maintained a strong presence in the Union within such market and increased in volume by 17 % from 2020 to the investigation period. Even in the shrinking market observed in 2022 and the investigation period, this resulted in a significant 50 % increase of Chinese market share from 2020 to the investigation period. This trend was only temporarily reversed in 2021: the volume of imports from China and their market share decreased that year by 5 % and 9 %, respectively, which can be attributed to the shipping crisis, reducing volumes of goods coming from China. Coupled with the peaking demand in 2021, this provided a brief respite to the Union industry allowing it to significantly increase its sales volumes and temporarily regain market share (see Table 6 above).

• (341) However, as soon as the shipping crisis began to abate in 2022, Chinese imports started increasing again, increasing by 10 % in volume terms in 2022 and additional 12 % in the investigation period, to the detriment of Union producers, and of imports from other third countries (see Table 12 below). This is clearly reflected in market shares, where the increasing market share of Chinese imports coincides perfectly with the market share of Union producers and third country imports both going down both in 2022 and in the investigation period.

• (342) Import prices from China also reflect the above market realities. Chinese landed prices remained below Union industry’s prices throughout the period considered, except in 2021 when the shipping crisis and cost of shipping from China to Europe reached their peak. Furthermore, Chinese landed prices were even below Union industry’s average cost of production both in 2020 and the investigation period, while in 2022 they were basically at the same level. Had the shipping costs not exploded in 2021 and 2022, Chinese landed prices could have easily remained below Union industry’s unit cost of production throughout the period considered.

• (343) Even as they were, the Chinese prices clearly caused price suppression to Union industry prices throughout the period considered (see recital (284)) and price depression in the investigation period (see recital (286)).

• (344) In addition, as already mentioned in recitals (282) and (283), the Commission established a weighted average undercutting margin of between 14 % and 15,3 % by the imports from the sampled exporting producers on the Union market in the investigation period, coinciding in time with the increasingly deteriorating situation of the Union industry.

• (345) The analysis of the injury indicators in recitals (269) to (337) shows that the economic situation of the Union industry worsened especially towards the end of the period considered and this coincided with a significant increase of dumped imports from the country concerned, which were found to undercut the Union industry prices during the investigation period. Those imports, in any event, caused significant price suppression throughout the period considered and price depression in the investigation period, as the Union industry was not able to increase its prices in line with the increase of cost of production, and even had to decrease the prices below the cost of production in the investigation period.

• (346) In view of the above considerations, the Commission provisionally established that there is a causal link between the material injury suffered by the Union industry and the dumped imports from China within the meaning of Article 3(6) of the basic Regulation. Such injury had both volume and price effects.

5.2.   Effects of other factors

• (347) Several interested parties claimed that any injury to the Union industry during the period considered was not caused by the Chinese exports but by other factors. These include global decline in consumption following the Covid-19 pandemic, rising cost of production, and ban of the use of food-grade TiO2 in the Union.

• (348) The Commission analysed if and to what extent those factors contributed to the injury.

5.2.1.   Cyclicality of the TiO2 market

• (349) Several parties claimed that the drop in demand observed in 2022 and the investigation period was nothing more than the result of the usual downturn in the cyclical TiO2 market.

• (350) First, to support this claim, one user provided the Commission with TZMI market intelligence data ¹¹¹ from November 2021 with both historical trends and predictions for the future.

• (351) The Commission noted in that regard that the market intelligence data mentioned in recital (350) concerns aggregate global consumption trends, so it might not accurately reflect the demand situation on the Union market specifically. This conclusion is reinforced by the fact that, as was already shown in the complaint, Union demand showed stable growth in 2020 and 2021, with an increase of 4 % year-on-year in each of the years. In addition, as the Table 2 above shows, the Union demand, while indeed dropping by 12 % in 2022, had a more pronounced drop of further 14 % in the investigation period. Neither of these developments are fully in line with TZMI global forecasts mentioned in recital (350).

• (352) Second, two users, Munksjö and Felix, similarly claimed in their questionnaire replies that the TiO2 market is highly cyclical, and that the alleged injury to the Union industry is merely a result of the shrinking market in the investigation period. Munksjö submitted a data sheet from three different market intelligence sources (ICIS, EUWID, and TZMI), showing the evolution of TiO2 prices in the Union market for the last fifteen years, and claiming that this shows that the Union TiO2 market has gone through three cycles of shrinkage and expansion since 2008 until Q4 2023.

• (353) The Commission noted that this data indeed shows that the TiO2 prices on the Union market had three peaks in the past fifteen years, in Q1 2012, Q2 2018, and Q2 of 2022. Each of those periods of higher prices was of slightly different length and was naturally followed by a decline in prices. The overall trend, however, is one of price increase.

• (354) With all the above in mind, and having analysed all the information at its disposal, the Commission made the following conclusions on the situation on the Union TiO2 market.

• (355) First, while there indeed might be global cyclicality in TiO2 demand, there is no evidence to suggest that it is unique to the TiO2 market and would merit special consideration as all markets regularly go through phases of contraction and expansion.

• (356) Second, even if TZMI’s global demand predictions may have been generally accurate, these have shown not to be fully in line with actual developments observed in the Union market, at least for the period considered.

• (357) Third, from all the data available to the Commission, one cannot draw a pattern showing with utter certainty when an upturn or a downturn will take place in the Union market and consequently conclude that contraction was bound to happen in 2023.

• (358) The Commission thus concluded that, even if the global market trends broadly accurately predicted there would be an increase in Union demand in 2020 and 2021 and a later decrease, the Union TiO2 market was affected by specific and extraordinary circumstances during the period considered, which dictated the evolution of demand. As already mentioned in recital (271) above, the Commission concluded that the ‘stay-at-home’ economy prompted by Covid-19 lockdowns led to an increase in demand for TiO2 in 2020, and especially 2021. Thus, even if there was going to be an increase in Union demand in 2020, the Covid-19 pandemic amplified it, and caused the demand to rise in 2021 as well. After such a big demand uptick, any drop in consumption that follows would naturally also be pronounced, while this drop (in 2022 and the investigation period) was further exacerbated by (a) the general inflationary pressures which started showing in 2022 and were present throughout the investigation period and likely by (b) the fears of market instabilities caused by Russian invasion of Ukraine in February 2022.

5.2.2.   Demand in the Union market

• (359) On the other hand, some parties claimed that the deteriorating situation of the Union industry was due precisely to significantly decreased demand in the aftermath of Covid-19 pandemic and inflationary pressures of 2022 identified above.

• (360) The Commission noted in that regard that the Union market did experience a pronounced decrease in demand, driven by both de-stocking after the high demand period during the Covid-19 pandemic and general inflationary pressures (see in recital (358)). Such shrinking market would have surely resulted in decrease of sales volumes of the Union industry, regardless of the existence of dumped imports from China.

• (361) However, under normal conditions of competition, in such a shrinking market sales volumes of all the market participants would have all gone down more-less equally. Yet, in the present case, imports from all other third countries (excluding China) and the Union industry’s sales (as shown it tables 6 and 12 above) are almost all decreasing both in 2022 and the investigation period, while only the Chinese imports are increasing in those years (as shown in Table 3 above), pointing again to the conclusion that, just as the shipping prices started going down in 2022, Chinese producers were able to continue selling their product in the Union market at dumped prices, gaining market share to the detriment of other players.

• (362) With regard to the decrease in consumption, CNCIA pointed out that in the Commission Decision of 27 June 2012 regarding imports of certain concentrated soy protein products originating in the PRC ¹¹², the Commission found an 8 % decrease in consumption as sufficient to break the causal link. They submitted that, considering the 14 percentage points drop in consumption in the investigation period compared to 2022, the Commission should now reach the same conclusion.

• (363) The Commission pointed out in that regard that the referenced case was not terminated because a decrease in demand attenuated the causal link between established dumping and material injury, but rather because no material injury was found in the first place. The argument was therefore dismissed as void ¹¹³.

• (364) CNCIA furthermore claimed that the decrease in sales in 2022 can also be explained by the Union’s decision to ban in that year the use of TiO2 in food for human consumption (additive E171) ¹¹⁴, pointing to Tronox’ 2022 annual report that references this is as one cause for the decrease in sales.

• (365) According to the information available to the Commission, specialty applications of TiO2 make up around 4 % of the total market, and applications in food for human consumption are an even smaller part of that share. The Commission thus concluded that any effect that this ban may have had on sales of the Union producers was negligible.

5.2.3.   Imports from third countries

• (366) The volume of imports from other third countries developed over the period considered as follows:

Table 12

Imports from third countries

Country		2020	2021	2022	Investigation period
United Kingdom	Volume (tonnes)	187 211	108 085	140 773	101 465
	Index	100	58	75	54
	Market share	15 %	9 %	13 %	11 %
	Average price	2 238	2 542	3 104	3 114
	Index	100	114	139	139
Mexico	Volume (tonnes)	93 747	120 213	102 347	73 036
	Index	100	128	109	78
	Market share	8 %	9 %	9 %	8 %
	Average price	1 504	1 514	1 869	2 388
	Index	100	101	124	159
USA	Volume (tonnes)	63 383	99 464	81 215	59 948
	Index	100	157	128	95
	Market share	5 %	8 %	7 %	6 %
	Average price	2 146	2 321	2 954	2 925
	Index	100	108	138	136
Other third countries (except China)	Volume (tonnes)	97 372	94 045	59 516	65 654
	Index	100	97	61	67
	Market share	8 %	7 %	5 %	7 %
	Average price	1 935	2 201	2 892	2 781
	Index	100	114	149	144
Total of all third countries except China	Volume (tonnes)	441 713	421 807	383 850	300 102
	Index	100	95	87	68
	Market share	36 %	33 %	34 %	31 %
	Average price	2 002	2 121	2 710	2 827
	Index	100	106	135	141
Source: Eurostat and verified questionnaire of the sampled Union producers.	Source: Eurostat and verified questionnaire of the sampled Union producers.	Source: Eurostat and verified questionnaire of the sampled Union producers.	Source: Eurostat and verified questionnaire of the sampled Union producers.	Source: Eurostat and verified questionnaire of the sampled Union producers.	Source: Eurostat and verified questionnaire of the sampled Union producers.

• (367) The Commission noted on the outset that, even though imports from United Kingdom represented the biggest share of imports into the Union from another third country (after China), according to the information available to the Commission, the only producers in the United Kingdom are two facilities owned by the Union industry. These imports are therefore not in competition with the Union industry on the Union market and also their price is higher than the Chinese import prices. Therefore, these imports do not contribute to the injury of the Union industry.

• (368) Volume of imports from all other third countries has been declining throughout the period considered at an increasing rate: 5 % decrease in 2021, 8 % in 2022 and 9 % in the investigation period.

• (369) Import volumes from notably USA and Mexico can be seen to be following the same trends as described for Union industry sales – an increase in imports in exceptionally high demand year of 2021, and then subsequently decreasing in 2022 and the investigation period. At the same time, both USA’s and Mexico’s market shares, after temporarily rising in 2021, began decreasing in 2022 and the investigation period. Imports from all other third countries also lost market share in the investigation period compared to 2022.

• (370) Interested parties claimed that the reason for injury to Union industry were low priced Mexican imports, rather than Chinese imports. The Commission established above a weighted average undercutting margin of between 14 % and 15,3 % by the imports from the sampled exporting producers on the Union market in the investigation period. The Commission observed that the import price from Mexico were indeed low. However, they increased significantly during the investigation period in comparison with previous years and were higher than the import prices from China.

• (371) By contrast, the Commission established that the landed prices of totality of Chinese imports decreased significantly, that is by 25 % between 2022 and the investigation period and undercut the Union industry’s prices by 18,2 % in the investigation period.

• (372) The Commission then examined the significance of imports from China and Mexico in the total Union market. As tables 3 and 12 above show, the total volume of imports from China in the investigation period are three times larger than those from Mexico. Furthermore, Mexican imports lost market share in the investigation period, compared to 2022, as did the totality of imports from all other third countries (excluding China). In contrast, Chinese imports are the only ones that gained market share in the investigation period.

• (373) The Commission therefore concluded that imports from Mexico as well as from any other third country did not attenuate the causal link established between the dumped Chinese imports and the injury suffered by the Union industry.

5.2.4.   Export performance of the Union industry

• (374) The volume of exports of the sampled Union producers developed over the period considered as follows:

Table 13

Export performance of the Union producers

	2020	2021	2022	Investigation period
Export volume (tonnes)	223 194	225 958	177 595	151 869
Index	100	101	80	68
Average price (EUR/tonne)	2 371	2 514	3 396	3 092
Index	100	106	143	130
Source: Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price	Source: Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price	Source: Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price	Source: Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price	Source: Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price

• (375) Similarly to production volumes and domestic sales, export volumes of the Union industry increased in 2021, although this increase was less pronounced than for domestic sales, before dropping significantly in 2022 and the investigation period. Export prices also followed the same trend as prices on the Union market, increasing in 2021 and 2022 before falling in the investigation period, but remaining significantly above 2021 levels.

• (376) Union industry achieved higher prices on the export markets than in the Union market throughout the period considered. However, even despite this, the Union industry was not able to keep the export price of their product above their cost of production in the investigation period and had to decrease export prices in that year too.

• (377) The complainant has claimed that unfair trade practices of the Chinese exporting producers in all markets are making it hard to compete also in the export markets and are the reason for such suboptimal export performance. Other interested parties retorted that there is no evidence to substantiate that claim.

• (378) The complaint contained evidence of announcement of the closure of Chemours plant in Taiwan in 2023 and the complainant submitted additional evidence during the investigation, showing that two TiO2 producers in Japan, Sakai Chemicals and Ishihara Sangyo, announced plant closures in 2026 and 2027, respectively. All those facilities are in close geographical proximity to China, making it likely that Chinese exports have had undue influence on their performance in their domestic or reginal markets. Furthermore, relevant authorities in Brazil have initiated their own antidumping investigation against Chinese TiO2. The Commission thus found that it cannot be excluded that Chinese exports are hindering Union industry’s competitive position in other markets similarly to the Union market.

• (379) Furthermore, the Commission has found that the profitability of export sales followed the development of profitability of the Union sales almost to the same percentage point throughout the period considered while export sales make around 25 % of total sales of the sampled Union producers.

• (380) The Commission thus concluded that export performance was not the cause of injury to the Union industry.

5.2.5.   Rising cost of production

• (381) Several parties have claimed that rising cost of production are the cause of injury to the Union industry.

• (382) While Union industry’s costs of production were increasing in 2021, and particularly 2022 and the investigation period, Union industry was able to increase its prices in 2021 and 2022 to maintain profitability. It was only forced to decrease prices below their COP in the investigation period, when, in the shrinking market, the Chinese imports dropped in prices significantly while increasing in volume, thus gaining market shares in the Union.

• (383) Interested parties again pointed to the case Soy Protein from China, where the increase in main raw material broke the causal link. The Commission pointed out however, that in the case at hand, the increase in cost of production was global due to global inflationary pressures and affected all the market players to a similar extent, as evidenced by the fact that prices of imports from all other third countries (except China) increased significantly in 2022 and even further in the investigation period. Notably, the prices of the main raw material, ilmenite ore, which represents around one third of the total cost of production, increased globally by around 80 % in 2022 compared to 2020 levels, and only slightly decreased in the investigation period.

• (384) The Commission thus concluded that the rising costs of production did not contribute to the injury suffered by the Union industry in the investigation period.

5.2.6.   Market intelligence predicting recovery

• (385) On 3 April 2024, AkzoNobel submitted further claims on lack of causality, relying on the report on the global situation of the TiO2 market, published in February 2024 by a market intelligence agency, TZMI. The report suggests that TiO2 market is recovering and predicts price increases in the Union market and increases in profitability of Union producers.

• (386) The Commission noted in that regard that, even though the report suggests improvement in market conditions in Europe, the report still labels them as weak across several metrics it analyses. Furthermore, as concerns prices in Europe and predictions of improved profitability of Union producers in their domestic market, the report itself acknowledges that its projections on price levels that Union industry will be able to achieve are, at least partially, made under the assumption of the positive outcome of this investigation.

• (387) Thus, even if this report would predict future performance of the Union industry with full accuracy, it is, essentially, making that prediction in the scenario of the restored level playing field on the Union market, and cannot be thus used as a counterargument for the Commission not to take a decision on which that prediction is itself, at least partially, based.

5.3.   Conclusion on causation

• (388) As the parties rightly point out, several factors made the situation of the Union industry challenging. First, 2022 and the investigation period were marked by an exceptional decrease in demand for TiO2 on the Union market. Second, both of those years saw a significant increase in costs of energy on the Union market and cost of ilmenite increased globally. Third, import prices from Mexico were lower than Chines prices in the first three years of the period considered.

• (389) None of this invalidates the fact however, that (i) as opposed to other third countries, imports from China were increasing in volume throughout the period considered (with a temporary slowdown due to exceptional circumstances in 2021, (ii) Chinese imports were coming into Europe at dumped prices, (iii) in the shrinking market of 2022 and the investigation period, Chinese imports were gaining market shares at the expense of the market share of the Union industry and of other third countries’ imports, and (iv) in the investigation period, when the prices of imports from all other countries were broadly staying the same as in 2022, the price of Chinese imports decreased dramatically, by one quarter of what they were in 2022, exerting significant price suppression and depression to the Union industry.

• (390) In that vein, the Commission considered the arguments made by the parties on factory closures in the Union. In the complaint, the complainant claimed that the three TiO2 plants were closed in the Union due to pressure exerted by Chinese imports and that more closures could have been expected without exceptionally favourable conditions of Covid-19 pandemic. Several interested parties retorted against this, claiming that there was no evidence supporting this conclusion, and that the closures were due to other circumstances and not attributable to alleged dumped imports from China. The parties pointed to the public statements made by the companies, which attribute the curtailment of production or plant closures to unfavourable conditions on the market, such as reduced demand, rising costs of production, and generally poor economic conditions, while Venator’s (one of non-sampled Union producers) Scarlino plant specifically was facing issues in obtaining regulatory approvals.

• (391) In a similar vein, the interested parties highlighted further statements from business reports of Union producers (Kronos, Police, Venator, Cinkarna), which recognised the decrease in demand and increase in cost of production as reasons for the challenging situation the Union industry finds itself in. Parties claimed that that this proves that imports from China cannot overall be held responsible for the injury suffered by the union industry.

• (392) The Commission notes in that regard that, while Venator Scarlino plant was indeed prevented from operating at full capacity due to pending regulatory approvals, from the cited statements of both Kronos and Venator, it is apparent that the decisions on the level and continuation of production are being made in consideration of generally challenging market conditions. As the entire above analysis shows, these clearly include the dumped imports from China exerting pressure on the market, while a number of the cited reports themselves reference also the presence of cheap imports from China as one of the challenges ¹¹⁵.

• (393) The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The effect of shrinking demand, rising cost of production, and imports from other third countries, notably Mexico, on the Union industry’s negative developments in terms of sales volumes, prices, and profitability was only partial.

• (394) On the basis of the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury. The injury consists mainly of loss of market share, price undercutting and suppression and falling profitability, return on investment and cash flow.

6. LEVEL OF MEASURES

• (395) The complainant claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation in the complaint.

• (396) Thus, in order to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation.

• (397) Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin.

6.1.   Injury margin

• (398) The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

• (399) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

• (400) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition.

• (401) PPG and CNCIA both opposed the target profit proposed in the complaint (10,2 %) as too high. PPG claimed that none of the years during the investigation period were adequate to establish basic profit, due to exceptional economic situation in every year, recalling Commission’s own conclusions in the anti-dumping investigation on imports of certain polyethylene terephthalate originating in China ¹¹⁶. They further claimed that, since the Union industry was able to sell at prices above their cost of production throughout the period considered, basic profit should be established as an average profit of all four years. CNCIA further claimed that the Commission should apply the same basic profit it applied in the anti-dumping investigation on imports of electrolytic manganese dioxides originating in China ¹¹⁷, since EMD is an inorganic compound, just like TiO2.

• (402) The Commission noted that the claim about Union producers’ sales prices may have been accurate for the period considered used in the complaint, but it was no longer relevant in the investigation period used by the Commission. As demonstrated above, Union industry’s sales prices were well below their cost of production in the investigation period. Any profitability which would be established taking account Union industry’s performance in that year would thus not reflect the profitability needed to recover full costs.

• (403) As concerns the claim by CNCIA, just because EMD and TiO2 are both inorganic chemicals does not mean that their producers operate in similar markets or that their performance would be comparable and no evidence was provided to the Commission to suggest that they would be.

• (404) The Commission noted that, during the period considered, the market share of Chinese imports was the lowest in 2021 and profitability and cash flow were the most positive in that year. However, the decrease in Chinese imports observed in that year was, as explained above, due to exceptional circumstances of the shipping crisis. Coupled with soaring demand prompted by Covid-19 lockdowns, the performance of the Union industry was exceptionally positive in this year. The Commission thus concluded that 2021 would not qualify as a representative year for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

• (405) Furthermore, just like 2021, the year 2020 was also affected by the favourable circumstances of increased consumption due to the ‘stay-at-home’ economy during Covid-19 lockdowns, even if to a lesser extent. On the basis of the information available at this stage, the Commission concluded that 2020 would not qualify as a representative year for providing a basic profit in accordance with Article 7(2c) of the basic Regulation either.

• (406) Finally, the rise in imports from China and the sharp downturn of the Union industry which started in 2022 and continued in the investigation period would not qualify either of those years as representative for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

• (407) In search of a period where normal conditions of competition would prevail, the Commission intended to examine the profitability achieved during the last ten years. The sampled Union producers provided data on the profitability for three years prior to the period considered. However, the Commission did not receive data on profitability relating only to the sales of TiO2 to unrelated customers in the Union from all three sampled Union producers for those years. It was therefore not possible to establish a profitability that would relate to the sales of the product under investigation to unrelated customers in the Union on the basis of the information currently available to the Commission.

• (408) Since there is no evidence that a profitability higher than 6 % could be achieved under normal conditions of competition, the Commission set the basic profit at 6 %, in accordance with Article 7(2c) of the basic Regulation.

• (409) Two Union producers provided evidence that their level of investments, research and development (‘R&D’) and innovation during the period considered would have been higher under normal conditions of competition. The Commission verified this information based on investment plans and refused and postponed projects, demonstrating that that these investments were genuinely planned. Indeed, the claims of both Union producers were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R&D and innovation (‘IRI’) expenses under normal conditions of competition, as provided by the Union industry and verified by the Commission, with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was 0,09 %.

• (410) Such IRI differential of 0,09 % was added to the basic profit of 6 % mentioned in the recital (398), leading to a target profit of 6,09 %.

• (411) In accordance with article 7(2d) of the basic Regulation, as a final step, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure pursuant to Article 11(2). Based on the evidence available, the Commission established an additional cost of 60,68 EUR/t.

• (412) On this basis, the Commission calculated a non-injurious prices of [3 400–3 800] EUR/t and [3 600–4 000] EUR/t for the like product of the Union industry by adding the above-mentioned target profit margin (see recital (410) above) to the cost of production of the three Union producers during the investigation period and then adding the adjustments under Article 7(2d) on a type-by-type basis.

• (413) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers in country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the three Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

• (414) The injury elimination level for ‘other cooperating companies’ and for ‘all other companies’ is defined in the same manner as the dumping margin for these companies (see recitals (255)–(259)).

Country	Company	Dumping margin (%)	Injury margin (%)
The People’s Republic of China	LB group	39,7	53,4
The People’s Republic of China	Anhui Gold Star group	14,4	53,0
The People’s Republic of China	Other cooperating companies	35,0	53,3
The People’s Republic of China	All other companies	39,7	53,4

• (415) In the present case, the complainants claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation. Thus, in order to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation. Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin (see recitals (417)–(418) below).

6.2.   Examination of the margin adequate to remove the injury to the Union industry

• (416) As explained in the Notice of Initiation, the complainant provided the Commission sufficient evidence that there are raw material distortions in the country concerned regarding the product under investigation. According to the evidence in the complaint, ilmenite, which accounts for 25 % of the cost of production of the product under investigation, is subject to captive mining in China. In addition, there is no VAT export refund for ilmenite in China. Both of those measures are listed in Article 7(2a), 2nd subparagraph of the basic Regulation as raw material distortions. Therefore, in accordance with Article 7(2a) of the basic Regulation, this investigation examined the alleged distortions to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury.

• (417) However, as the margins adequate to remove injury are higher than the dumping margins, the Commission considered that, at this stage, it was not necessary to address this aspect.

• (418) Following the above assessment, the Commission concluded that it is appropriate to determine the amount of provisional duties in accordance with Article 7(2) of the basic Regulation.

6.3.   Conclusion on the level of measures

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

Company	Provisional anti-dumping duty
LB group	39,7  %
Anhui Gold Star group	14,4  %
Other cooperating companies	35,0  %
All other companies	39,7  %

7. UNION INTEREST

• (420) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation.

• (421) The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, unrelated importers, traders and users.

7.1.   Interest of the Union industry

• (422) It is recalled that the Union industry consists of eleven producers, whose sales and profitability deteriorated significantly during the second half of the period considered, with a consequent negative impact on its market share, inventory level, investments, return on investment and cash flow. The Commission concluded at this stage that the Union industry suffered material injury caused by the dumped imports from the country concerned (see recital (337) above).

• (423) If provisional measures are not imposed it is likely that, as a result of the price pressure from the dumped imports, the weak profitability and other financial indicators will force the Union industry to cease production of TiO2. However, following the imposition of anti-dumping provisional measures, it is expected that the sales volumes and prices of the Union industry on the Union market will rise, thus improving profitability and other financial indicators of this industry and preventing closure.

• (424) It is therefore clear that provisional anti-dumping measures would be in the interests of the Union industry.

7.2.   Interest of unrelated importers and traders

• (425) The unrelated importer mentioned in recital (10) eventually did not submit a questionnaire reply. The Commission received no questionnaire replies from importers and traders.

• (426) On this basis, the Commission has provisionally concluded that the imposition of anti-dumping measures is not likely to have a negative effect on the situation of importers and traders in the Union.

7.3.   Interest of users

• (427) In total 23 users and user associations participated in this investigation opposing the imposition of duties. Out of those, six users submitted questionnaire replies. The rest submitted comments.

• (428) The main use of TiO2 is for the paints and coatings sector, representing above 60 % of the market, with architectural and industrial paints making for around 55 % of total demand, and industrial inks for around 5 %. The second largest segment of the market is plastics industry at around 25 %, then paper at 12 % and specialty applications at 4 %. Questionnaire replies were received from the users active in paint and coating, graphic inks, laminate paper, and plastics sectors. All six replies were verified on spot at the premises of the users.

7.3.1.   Users who submitted questionnaire replies

• (429) The likely effects of the measures would be different on users, depending on the segment of the downstream market in which they operate. The Commission analysed separately the situation of users of TiO2 for more special applications like laminate paper and graphic inks (these users also submitted product scope claims) and users of TiO2 in its main application in paints, coatings, and plastics.

• (430) First, out of the six users whose questionnaire replies the Commission verified, the laminate paper producers will be the most affected by potential measures. TiO2 represents around [25–35] % in their total cost of production, and they source around [10–40] % of their TiO2 from China. Both users also demonstrated that they were operating with low or negative profitability in the investigation period. The Commission estimated that if duties are imposed, and all other things remaining equal, their profitability would decrease by about [2–3] percentage points. As indicated in recital (52) above, however, these two users source a large majority of their TiO2 from other sources than China and the Commission thus concluded that the two users have sufficient alternative sources of supply.

• (431) Second, Flint Group, a graphic inks producer, provided evidence demonstrating that products containing TiO2 generate only a limited part of its total turnover, while Chinese TiO2 represents only a partial share in the costs of production of those products. Due to the complexity of Flint’s corporate structure and the fact they produce a large number of ink formulas which contain some TiO2 in a number of plants in the Union, Flint could not provide accurate figures of the profitability of its TiO2-related business segment. Flint did demonstrate, however, a healthy profitability at the level of the total company in the investigation period.

• (432) Based on the information available, the Commission concluded that, if anti-dumping duties were imposed, and all other things remaining equal, its profitability in the TiO2-related segment of the business would likely decrease by less than one percentage point, ¹¹⁸ given the low share of TiO2 in total turnover and cost of production. In addition, the company would remain profitable. The Commission could not determine the impact on the overall group profitability, but the effect would be even less pronounced. The Commission therefore concluded that Flint Group would not be significantly affected by the duties.

• (433) Third, two other users, AkzoNobel and Sherwin-Williams Italy SRL (‘Sherwin-Williams’), are two of the big paints and coating manufacturers. Paints and coating manufacturers are the biggest users of TiO2 in terms of volume. The impact of duties on the performance of this category of users would be much less pronounced. AkzoNobel filled in the questionnaire at the level of all entities present in the Union. Chinese TiO2 represents a negligible share in their total cost of production, and they were profitable in the investigation period. Sherwin-Williams provided the questionnaire reply for two entities which would be the most affected by the duties, and for the entire Union business. Chinese TiO2 represents only a minor share of total cost of production of these two entities combined. While profitability on their products containing TiO2 was low in the investigation period, both Sherwin-Williams entities demonstrated a healthy overall profitability. The total turnover of those two plants represents a small share of total Union turnover of Sherwin-Williams, which was profitable in the investigation period. The Commission thus concluded that both users, even if they would not be able to pass such cost increase to consumers, would be able to absorb the measures.