Commission Implementing Regulation (EU) 2024/2673 of 11 October 2024 imposing a provisional anti-dumping duty on imports of glass fibre yarns originating in the People’s Republic of China

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) On 16 February 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of glass fibre yarns (‘GFY’) originating in the People’s Republic of China (‘China’ or ‘the PRC’ or the country 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 3 January 2024 by Glass Fibre Europe (‘the complainant’). The complaint was made on behalf of the Union industry of GFY in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of threat of material injury to the Union industry that was sufficient to justify the initiation of the investigation.

(3) Pursuant to Article 14(5a) of the basic Regulation, the Commission should register imports subject to an antidumping 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 Commission did not register imports during the period of pre-disclosure as there was no increase in import quantities after the initiation of the investigation and therefore the conditions in Article 10(4) were not met.

(5) 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 complainant, other known Union producers, the known exporting producers and the Chinese authorities, known importers, suppliers and users, traders about the initiation of the investigation and invited them to participate.

(6) 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.

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

Sampling of Union producers

(8) In a Note to the File of 16 February 2024, the Commission stated that based on the information available, the two companies Saint-Gobain Vertex s.r.o and Valmiera Stikla Skieddra AS represent the totality of the Union industry and that therefore sampling was not necessary. The Commission invited interested parties to comment on this provisional decision. No comments were received. The Commission therefore confirmed its decision not to sample in the Note to File of 12 March 2024.

Sampling of importers

(9) No importers came forward and provided information for the selection of the sample.

Sampling of exporting producers in China

(10) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in China to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation. Five exporting producers in China provided the requested information and agreed to be included in the sample.

(11) In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two exporting producers, Shandong Fiberglass Group Corp (‘Shandong Fiberglass’) and Henan Guangyuan New Material Co. Ltd (‘Henan Guangyuan’), on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. The two initially sampled exporting producers represented in total [11 – 15 %] of the total volume of Chinese exports to the Union.

(12) In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the Chinese authorities were consulted on the selection of the sample.

(13) One exporting producer, Jiangsu Jiuding Special Fiber Co., Ltd., claimed that it should have been included in the sample. However, in its sampling form, it reported exports of chopped strands which, after the product definition was clarified as explained in recitals (26) and (28), is not in the product scope. Based on the remaining volume of its exports of the product concerned to the Union, this exporting producer did not qualify to be part of the sample.

(14) On 26 March 2024 (7 days before the deadline to submit the response to the exporting producer questionnaire), Shandong Fiberglass, the company representing the largest exports to the Union in the sample, announced that it will not cooperate with the investigation.

(15) The three other exporting producers who responded to the sampling form represented in total [2 – 5,5 %] of the Chinese export volume. They indicated intentions to request an individual examination but none of them submitted responses to the exporting producer questionnaire and thus a valid request. Given the low level of exports to the Union of the exporting producers that provided sampling replies, any additions to the sample, even had the replies to the anti-dumping questionnaire been submitted, would not have resulted in a representative sample (3).

(16) Overall, the level of cooperation in this case is low because the imports of the producers that provided replies to the sampling questionnaire, following the decision of Shandong Fiberglass to cease cooperation, represented [4,5 % to 9 %] of the total Chinese exports to the Union expressed as proportion of the total imports from the country concerned to the Union in the IP, that were established on the basis of Eurostat as detailed in recital (159).

(17) Due to low cooperation leading to a situation where a representative sample could not be selected, the Commission decided to abandon sampling altogether and apply Article 18 for the determination of dumping, in accordance with Article 17(4), second paragraph of the basic Regulation.

(18) On 5 August 2024 the Commission issued a note to the file and informed the Chinese authorities about its decision to abandon sampling (see recital (17) above). The interested parties were invited to comment but no comments were received.

(19) As explained in recital (15), three other Chinese exporting producers in their respective sampling forms indicated their interest in individual examination under Article 17(3) of the basic Regulation. However, these exporting producers did not submit valid requests as they did not submit responses to the questionnaire for the exporting producers within the deadline specified in the Notice of Initiation. Therefore, the Commission considers that no individual examination requests were received from these companies.

(20) As the only company from the original sample that provided a proper and timely questionnaire response that could be verified in accordance with Article 16(1) of the basic Regulation, the Commission decided to calculate an individual margin for Henan Guangyuan.

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

(22) The Commission made questionnaires for the Union producers, the exporting producers, the known importers and users available online (4) on the day of initiation.

(23) The Commission received questionnaire replies from the two Union producers, one Chinese exporting producer, one unrelated importer and three users. The Commission did not receive the questionnaire reply from the GOC.

(25) The investigation of dumping and injury covered the period from 1 January 2023 to 31 December 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’).

(26) The product under investigation is glass fibre yarns, whether or not twisted, excluding glass fibre slivers, glass fibre cords and chopped strands, currently falling under CN codes ex 7019 13 00 and ex 7019 19 00 (TARIC Codes 7019 13 00 10, 7019 13 00 15, 7019 13 00 20, 7019 13 00 25, 7019 13 00 30, 7019 13 00 50, 7019 13 00 87, 7019 13 00 94, 7019 19 00 30, 7019 19 00 85).

(27) GFY is used in a wide range of applications, for example in woven, knit, braided or non-crimp fabrics, which are then used to reinforce cementitious material such as mortar or elastomeric, thermoplastic, and thermoset resins in the composites industry. Examples of use include cars, electric vehicle batteries, trucks, buses, trains, windmill blades, aircrafts, building insulation, smoke and fire protection, acoustic insulation, filtration (air, metal, dust and liquid), electrical insulation, etc.

(28) On 25 March 2024, in response to an inquiry of a Chinese exporting producer, the Commission issued a note to the file clarifying the product definition. The note clarified that high silica continuous yarns were included in the definition of the product under investigation whereas chopped strands, irrespective of the glass type and irrespective of the length, were excluded from the definition of the product under investigation. The interested parties were invited to comment but no comment was received.

(29) The product concerned is the product under investigation originating in China.

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

(32) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to China, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

(33) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in China to provide information regarding the inputs used for producing GFY. Two exporting producers (Jiangsu Jiuding Special Fiber Co., Ltd and Chongqing Tianze New Material Corp) submitted the relevant information.

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

(35) No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received from the GOC within the deadline. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in China.

(36) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

(37) On 19 April 2024, the Commission informed by a note (‘the First Note’) the interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of GFY. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified Brazil, Malaysia, Mexico, Thailand and Türkiye as possible appropriate representative countries.

(38) The Commission received comments on the First Note from the complainant and Henan Guangyuan. These comments are addressed in section 3.2.

(39) On 27 June 2024, the Commission informed by a second note (‘the Second Note’) the interested parties on the relevant sources it intended to use for the determination of the normal value, with Türkiye as the representative country. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on the 2023 financial data available for the Turkish group, Türkiye Şişe ve Cam Fabrikaları A.Ş (‘the Sisecam group’), a producer of GFY in the representative country.

(40) The Commission received comments on the Second Note from the complainant. These comments are addressed in detail in section 3.2.

(41) After having analysed the comments and information received, the Commission concluded that Türkiye was an appropriate representative country from which undistorted prices and costs would be sourced for the determination of the normal value. The underlying reasons for that choice are further described in detail in Section 3.2.2 below.

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

(43) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’ (‘administrative, selling and general costs’ is referred hereinafter as ‘SG&A’). As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and low cooperation of the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

(44) In its recent investigations concerning the glass fibre sector in China (5), the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

(45) In those investigations, the Commission found that there was substantial government intervention in China resulting in a distortion of the effective allocation of resources in line with market principles (6). In particular, the Commission concluded that in the glass fibre sector, not only does a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation (7) but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (8). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs, have an additional distorting effect on the market. Indeed, overall, the system of planning in China results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (9). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in China (10). In the same vein, the Commission found distortions of wage costs in the glass fibre sector, in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (11), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in China (12).

(46) Like in its previous investigation concerning the glass fibre sector in China, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, as well as in the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the purposes of Trade Defence Investigations (‘Report’) (13), which relies on publicly available sources and which the Commission placed on the file. That analysis covered the examination of the substantial government interventions in China’s economy in general, but also the specific market situation in the relevant sector including the product under investigation. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in China as also found by its previous investigations in this respect.

(47) The complainant submitted that there is ample compelling prima facie evidence that the Chinese GFY industry is subject to interventions by the GOC that have led to significant distortions in the sector, which in turn justifies establishing the normal value according to Article 2(6a) of the basic Regulation.

(48) To support its position, the complainant highlighted the below elements which result in significantly distorting the GFY sector in China.

(53) The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file and on the existence of significant distortions and/or appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.