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

3.2.7.1.   Adjustments made to the normal value

• (136) As explained in recital (135), the normal value was established at the ex-works level of trade by using costs of production together with amounts for SG&A and for profit, which were considered to be reasonable for that level of trade. Therefore, no adjustments were necessary to net the normal value back to the ex-works level.

• (137) The Commission found no reasons for making any allowances to the normal value, nor were such allowances claimed by Henan Guangyuan.

3.2.8.   Adjustments made to the export price

• (138) In order to net the export price back to the ex-works level of trade, adjustments were made on the account of transport, insurance, handling and loading as well as packing.

• (139) Allowances were made for the following factors affecting prices and price comparability: warranty and guarantee expenses, credit costs and bank charges.

3.2.8.1.   Dumping margins

• (141) As explained in recital (17), the Commission decided to apply Article 18 for the determination of dumping, except for the cooperating exporting producer, Henan Guangyuan, for which an individual margin was calculated.

• (142) For Henan Guangyuan, 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.

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

Company	Provisional dumping margin
Henan Guangyuan New Material Co., Ltd.	26,3 %

• (144) For all other exporting producers, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission first determined the level of cooperation of the exporting producers. As explained in recital (16), the level of cooperation expressed as a proportion of the total imports from China to the Union was [4,5 – 9 %], which is considered very low.

• (145) In view of the low level of cooperation, the Commission determined the dumping margin for all other companies based on facts available. To establish the best facts available the Commission used the data provided by the cooperating exporting producer, since it allowed for a calculation at the product type level. In that dataset the Commission selected a product type that was most sold on the Union market by both the cooperating exporting producer and the Union industry ⁵⁶. The Commission noted that the average import price from China (Table 4) at the CIF level was below the average export price of the cooperating exporting producer at that level of trade. To reflect this, the Commission chose a representative number of transactions within the chosen product type (accounting for [15-25] % of the exporting producer’s exports to the Union) where the export price was below the average for that product type sold by the exporting producer. In Commission’s view, based on the analysis of the limited information offered by the import statistics and the data provided by the sole cooperating exporting producer, those transactions represented a reasonable proxy for the dumping behaviour of the non-cooperating exporting producers.

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

Company	Provisional dumping margin
Henan Guangyuan New Material Co., Ltd.	26,3 %
All other imports originating in China	56,1 %

4. INJURY

4.1.   Definition of the Union industry and Union production

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

• (148) The total Union production during the investigation period was established at around [85 000 – 95 000] tonnes. The Commission established the figure on the basis of the verified data of the two sampled Union producers, which represent 100 % of the production.

4.2.   Determination of the relevant Union market

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

• (150) The Commission found that a substantial part of the Union producers’ production was destined for captive use.

• (151) The distinction between captive and free market is relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports. By contrast, production destined for free market sale is in direct competition with the product concerned.

• (152) The Commission has obtained and verified the data for the entire GFY activity of the Union industry and determined whether the production was destined for captive use or for the free market. The verification of the data for the two producers representing 100 % of the Union GFY production allowed the Commission to get a complete picture.

• (153) The Commission examined certain economic indicators relating to the Union industry on the basis of data for the free market. These indicators are: sales volume and sales prices on the Union market; market share; growth; export volume and prices; profitability; return on investment; and cash flow. Where possible and justified, the findings of the examination were compared with the data for the captive market in order to provide a complete picture of the situation of the Union industry.

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

4.3.   Union consumption

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

• — the verified sales of the two Union producers;

• — information provided by the complainant;

• — the imports from the country concerned and from all other third countries, based on the data of the Comext database of Eurostat and adjusted in coordination with several national customs authorities in order to exclude other products imported under the same commodity codes which were not the product concerned. The national customs authorities provided a list of transactions for the period considered which allowed the Commission to identify the product concerned within the broader customs codes. The import volumes were then adjusted on the basis of this information for imports from China and for imports from third countries. This adjustment was explained to interested parties in detail in a Note to the file on 10 July 2024. The complainant submitted comments on the Note but did not question the methodology of the adjustment. No other interested party submitted comments on the Note.

• (156) The Commission also found that around [55 %-65 %] of the total Union producers’ production (not reflected in the Union consumption and other economic indicators outlined in this Regulation) was destined for captive use in the period considered.

• (157) Union consumption developed as follows:

Table 2

Union consumption (tonnes)

	2020	2021	2022	Investigation period
Total Union consumption	[120 000 – 140 000 ]	[133 000 – 153 000 ]	[158 000 – 178 000 ]	[98 000 – 118 000 ]
Index	100	111	128	83
Captive market	[70 000 – 80 000 ]	[73 000 – 83 000 ]	[73 000 – 83 000 ]	[58 000 – 68 000 ]
Index	100	105	104	83
Free market	[50 000 – 60 000 ]	[60 000 – 70 000 ]	[85 000 – 95 000 ]	[40 000 – 50 000 ]
Index	100	119	162	85
Source: Questionnaire replies of the Union producers, Eurostat and additional data provided by the national customs authorities.	Source: Questionnaire replies of the Union producers, Eurostat and additional data provided by the national customs authorities.	Source: Questionnaire replies of the Union producers, Eurostat and additional data provided by the national customs authorities.	Source: Questionnaire replies of the Union producers, Eurostat and additional data provided by the national customs authorities.	Source: Questionnaire replies of the Union producers, Eurostat and additional data provided by the national customs authorities.

• (158) The Union consumption increased from 2020 to 2022 substantially by 62 %, but dropped in the investigation period, showing an overall drop in consumption over the period considered.

4.4.   Imports from the country concerned

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

• (159) The Commission established the volume of imports on the basis of Eurostat data and adjusted it in coordination with several national customs authorities as explained in recital (155). The market share of the imports was established by comparing import volumes with the Union market consumption (see table 2).

• (160) Imports into the Union from China concerned developed as follows:

Table 3

Import volume and market share

	2020	2021	2022	Investigation period
Volume of imports from China (tonnes)	10 654	14 283	30 892	15 163
Index	100	134	290	142
Market share	[15 % – 25 %]	[20 % – 30 %]	[30 % – 40 %]	[30 % – 40 %]
Index	100	113	179	168
Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.

• (161) The above table shows that in absolute figures the imports from China increased during the period considered by 42 %. The overall increase in absolute figures showed a peak in 2022 in which the imports more than doubled. In parallel, the total market share of the Chinese imports into the Union increased by 68 % percent during the period considered.

4.4.2.   Prices of the imports from China and price undercutting

• (162) The Commission established the prices of imports on the basis of the verified data of Eurostat and additional data provided by the national customs authorities.

• (163) The weighted average price of imports into the Union from the country concerned developed as follows:

Table 4

Import prices (EUR/tonne)

	2020	2021	2022	Investigation period
Import prices from China	1 363	1 624	2 163	1 720
Index	100	119	159	126
Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.

• (164) The above table shows that the import prices from China increased during the period considered by 26 %. The overall increase in absolute figures showed a peak in 2022 in which the prices were 59 % above the price at the beginning of the period considered.

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

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

• (2) the corresponding weighted average prices per product type of the imports from the from the Henan Guangyuan to the first independent customer on the Union market, established on a cost, insurance, freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs.

• (166) The price comparison was made on a type-by-type basis for transactions at the same level of trade, after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the Union producers’ theoretical turnover during the investigation period. It showed a weighted average undercutting margin of between 0 % and 34,4 % by the imports from the country concerned on the Union market. 99,9 % of the import volumes have been found to be undercutting. The Commission also compared the price of Chinese imports to the EU on the basis Eurostat data to the average price of all product types sold by the Union producers to unrelated customers. This calculation showed that Chinese prices are below Union industry prices by 15,4 % and therefore corroborated the finding on price undercutting calculated as set out in recital (165).

• (167) Moreover, in addition to the finding on undercutting, the Commission further noted that the dumped imports depressed the prices of the Union industry. Indeed, as set out in Table 8, in the investigation period the Union industry had to lower its sales prices to a level which was even below its cost of production to be able to sell its products.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (168) 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.

• (169) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. Due to the fact that the Commission has verified the data of the two Union producers representing 100 % of the Union production, the Commission evaluated the macroeconomic indicators and the microeconomic indicators on the basis of this data.

• (170) 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.

• (171) 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

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

Table 5

Production, production capacity and capacity utilisation

	2020	2021	2022	Investigation period
Production volume (tonnes)	[100 000 – 120 000 ]	[100 000 – 120 000 ]	[100 000 – 120 000 ]	[80 000 – 100 000 ]
Index	100	104	104	78
Production capacity (tonnes)	[130 000 – 150 000 ]	[130 000 – 150 000 ]	[130 000 – 150 000 ]	[130 000 – 150 000 ]
Index	100	102	102	107
Capacity utilisation	[80  % –90  %]	[80  % –90  %]	[80  % –90  %]	[60  % –70  %]
Index	100	103	102	73
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (173) During the period considered, the Union Industry’s production volume first increased by 4 % in 2021, remained stable in 2022 and then fell substantially to a level 22 % lower than in 2020.

• (174) The reported capacity refers to the installed capacity, which increased by 7 % over the period considered. GFY production facilities are subject to regular maintenance every 5 years. This regularly includes updating certain technology, which has caused this increase in capacity.

• (175) The capacity utilisation was on high level of [80 % – 90 %] during the years 2020, 2021 and 2022, it decreased substantially to [60 % – 70 %] in the IP. While the capacity utilisation first increased in 2021 by 3 % it slightly fell in 2022 and substantially fell in the IP, to a level of 27 % below the 2020 value.

4.5.2.2.   Sales volume and market share

• (176) 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)	[20 000 – 40 000 ]	[20 000 – 40 000 ]	[20 000 – 40 000 ]	[10 000 – 30 000 ]
Index	100	102	104	74
Market share	[40 -50  %]	[35 -45  %]	[25 -35  %]	[35 -45  %]
Index	100	85	64	88
Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.

• (177) The Union industry sales slowly increased from 2020 to 2022 but decreased substantially in the IP. In the IP it fell by 29 % compared to 2022 and reached a level that was 26 % below the beginning of the period considered.

• (178) The market share developed in a different way. Despite the increase in volume from 2020 to 2022 the Union industry lost 36 % of their initial market share. It could only recuperate this market share partially in the IP, still losing 22 % of their market share over the period considered.

4.5.2.3.   Growth

• (179) The Union consumption increased from 2020 until 2022 and then showed a substantial decrease in the IP, leading to a total decrease over the period considered. The Union industry lost market share while the consumption increased and could only partially recuperate market share during the decrease of the consumption in the IP.

4.5.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2020	2021	2022	Investigation period
Number of employees (FTE)	[1 200 – 1 400 ]	[1 200 – 1 400 ]	[1 200 – 1 400 ]	[1 200 – 1 400 ]
Index	100	103	103	95
Productivity (tonnes/employee)	[80 – 100 ]	[80 – 100 ]	[80 – 100 ]	[70 – 90 ]
Index	100	101	101	82
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (181) During the period considered the employment showed a moderate increase of 3 % in 2021, remained stable in 2022 and decreased in the IP to a level that is 5 % below the beginning of the period considered. The productivity during the period considered the employment showed a moderate increase of 1 % in 2021, remained stable in 2022 and decreased in the IP to a level that is 18 % below the beginning of the period considered.

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

• (182) 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 country concerned.

• (183) 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

• (184) The weighted average unit sales prices of the 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 total market (EUR/ tonne)	[1 500 – 1 600 ]	[1 700 – 1 800 ]	[2 400 – 2 500 ]	[2 150 – 2 250 ]
Index	100	111	154	141
Unit cost of production (EUR/ tonne)	[1 190 – 1 240 ]	[1 300 – 1 350 ]	[1 800 – 1 850 ]	[2 280 – 2 330 ]
Index	100	110	151	191
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (185) The table above shows the evolution of the unit sales price on the Union market as compared to the corresponding cost of production. Sales prices have on average been higher than the unit cost of production for the years from 2020 until 2022. In the IP the average sales price fell under the unit cost of production.

• (186) The major factor that influenced the price from 2020 until 2022 was the increase in raw material and energy cost. In the IP the sales price of the Union industry decreased compared to the previous year while their cost of production increased sharply.

4.5.3.2.   Labour costs

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

Table 9

Average labour costs per employee

	2020	2021	2022	Investigation period
Average labour costs per employee (EUR)	[23 000 – 26 000 ]	[24 000 – 27 000 ]	[28 000 – 31 000 ]	[31 000 – 34 000 ]
Index	100	105	118	130
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (188) During the period considered, the average wage per employee increased steadily, over the entire period by 30 %.

4.5.3.3.   Inventories

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

Table 10

Inventories

	2020	2021	2022	Investigation period
Closing stocks (tonnes)	[4 500 – 5 500 ]	[4 500 – 5 500 ]	[7 500 – 8 500 ]	[4 500 – 5 500 ]
Index	100	104	172	113
Closing stocks as a percentage of production	[4  %-5  %]	[4  %-5  %]	[6  %-7  %]	[5  %-6  %]
Index	100	100	164	144
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (190) There was an increase in stock levels over the period considered of 13 %. While the stock only increased slightly in 2021 in relation to the increase of production, in 2022 there was a substantial increase. The stock level decreased substantially in the IP.

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

• (191) Profitability, cash flow, investments and return on investments of the 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)	[13  % –17  %]	[13  % –17  %]	[16  % –18  %]	[(-22  %) – (-18  %)]
Index	100	98	111	- 129
Cash flow (EUR)	[20 000 000 – 23 000 000 ]	[20 000 000 – 23 000 000 ]	[20 000 000 – 23 000 000 ]	[6 000 000 – 8 000 000 ]
Index	100	96	104	31
Investments (EUR)	[15 000 000 – 16 000 000 ]	[21 000 000 – 23 000 000 ]	[21 000 000 – 23 000 000 ]	[14 000 000 – 15 000 000 ]
Index	100	145	141	91
Return on investments	[1  % –3  %]	[1  % –3  %]	[3  % –5  %]	[(-4  %) – (-3  %)]
Index	100	106	175	- 120
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (192) The Commission established the profitability of the 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. Profitability was positive throughout the period from 2020 until 2022 considered, with the highest profits recorded in 2022. However, in the IP the profit turned into a substantial loss.

• (193) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed relatively stable from 2020 to 2022, with a slight decrease in 2021 and a positive development in 2022. However, in 2023 the cash flow decreased substantially.

• (194) Investments, while being relatively low at the beginning of the period, increased by 45 % in 2021 and in 2022 only slightly decreased. However, in the IP there was a substantial decrease in investments. Most of the investment concerned production line maintenance and modernisation aiming at increasing the longevity of the plants and keeping the production up to date. There was no investment in new GFY capacity at the Union producers during the period considered, beside some capacity gains through modernization. The decrease in investment in the IP is connected to a delay in maintenance.

• (195) The return on investments is the profit in percentage of the net book value of investments. Consistent with the profitability, the return on investment was positive from 2020 to 2022 but went negative in the IP.

• (196) The Union producers’ ability to raise capital has not been affected over the period considered as they produce profitable derivative products using GFY as an input.

4.6.   Conclusion on injury

• (197) While between 2020 and 2022 most injury indicators showed a positive trend, in that period the Union industry lost substantial market share. Its market share decreased until 2022 by 34 %. The development in the IP lead to a negative trend over the period considered of all injury indicators. Production volume and sales volume decreased by 22 % and 26 %, respectively. The loss in sales volume was so substantial that the market share of the Union industry decreased by 12 % over the period considered, despite having recuperated some market share in the IP.

• (198) Likewise, the main financial indicators unit sales price, profitability, cash flow and return on investment, also showed a positive trend in the years from 2020 to 2022, but due to substantial decreases in the IP showed a negative trend which reflected the significant price suppression on the Union market as shown in Table 8. The unit sales prices increased from 2020 to 2022 substantially, reflecting not only the substantial increases of cost of production in that period, but also allowing the Union industry to improve their profit. However, in the IP their sales price decreased to a level below the cost of production. As a result, the profitability of the Union industry turned from a profit of [13 % – 17 %] in 2020 to a loss of [(-22 %) – (- 18 %)] in the investigation period. Similar negative effects are seen in cash flow and return on investment.

• (199) 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 in the IP in the form of volume injury, price suppression and financial losses.

5. CAUSATION

• (200) 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: captive use, increase in cost of production, imports from other third countries and decrease of consumption in the IP.

5.1.   Effects of the dumped imports

• (201) In the years from 2020 to 2022 the Chinese imports increased substantially in absolute volumes by 290 %. Alone in the year 2022, the year prior to the IP, the Chinese exports more than doubled from 14 000 tonnes in 2021 to an all-time high of 31 000 tonnes in 2022 at prices which were lower than the Union industry’s prices. The Chinese importers substantially increased their market shares from [15-25] % in 2020 to [30-40] % in 2022.

• (202) At the same time the consumption increased from 2021 to 2022 from [60 000 – 70 000] tonnes to an all-time high of [85 000 – 95 000] tonnes. The effect of this high consumption was that in 2022 the Union producers could continue to sell quantities at profitable prices and therefore no injury was caused in the year 2022 despite the high volume of imports and loss of market share of the Union industry.

• (203) However, the consumption decreased substantially in the IP to only [40 000 – 50 000] tonnes, representing a reduction of 47,7 % compared to 2022. At the same time, the Chinese exporters maintained a high market share of [30-40] %, in the IP. Although the Chinese market share decreased slightly by 2 percentage points between 2022 and the IP, compared to their market share in the beginning of the period considered of [15-25] %, this constitutes an increase of 68 % or 14 percentage points over the period considered. As an effect, in the IP the Union industry could no longer sell the volumes which they sold in the preceding years, and they even had to decrease their sales prices to be able to sell these low sales volumes. While their sales volume had slowly increased from 2020 to 2022, it substantially dropped in the IP from [20 000 – 40 000] tonnes in 2022 to [10 000 – 30 000] tonnes in the IP. The Union industry explained that the drop in consumption in the IP is caused by the fact that the users filled their stocks with Chinese GFY in 2022 and therefore created less demand in the IP. The complainants submitted internal reports and minutes of meetings to show that many of their EU and non-EU customers were building up high stocks in 2022 and started to become reluctant to source from the EU industry in 2023 when demand dropped. No party has commented to this statement or questioned this stockpiling. Moreover, low cooperation of Chinese exporting producers combined with relatively low cooperation of users made further analysis of the stockpiling issue impossible. The Commission considered that the sales in 2022 and 2023 cannot be analysed separately. The average of the consumption in 2022 and the IP was [62 000 – 73 000] tonnes, which is a direct continuation of the trend from 2020 and 2021.

• (204) In the context of decrease in consumption during the investigation period, the average import price from China dropped significantly in the IP, exercising price pressure on the market. As the Union industry’s cost of production continued to increase in the IP, the pricing practices of China turned out to be particularly injurious in that year as they prevented the Union industry from covering their increasing costs. Instead, they had to decrease their prices below their costs. In addition, as explained in recital (220) below, the high fixed costs of the Union industry spread over lower sales volumes, which resulted in significant financial losses during the investigation period.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

• (205) 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
Taiwan	Volume (tonnes)	7 821	10 725	17 713	6 702
	Index	100	137	226	86
	Market share	14 %	16 %	20 %	14 %
	Average price (EUR/tonne)	1 594	1 841	2 421	1 954
	Index	100	115	152	123
Mexico	Volume (tonnes)	3 446	4 194	6 504	1 715
	Index	100	122	189	50
	Market share	6 %	6 %	7 %	4 %
	Average price (EUR/tonne)	1 615	1 839	2 641	2 814
	Index	100	114	164	174
Total of all third countries except China	Volume (tonnes)	19 574	26 114	32 499	12 938
	Index	100	133	166	66
	Market share	36 %	40 %	36 %	28 %
	Average price (EUR/tonne)	2 338	2 722	3 579	5 121
	Index	100	116	153	219
Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.	Source: Eurostat and additional data provided by the national customs authorities.

• (206) Imports from Taiwan increased substantially from 11 000 tonnes in 2021 to 18 000 tonnes in 2022. However, whereas the Chinese import price in 2022 of 2 163 EUR/tonne and in the IP of 1 720 EUR/per tonne was substantially lower than the Union industry price of 2 443 in 2022 and 2 226 EUR/tonne in the IP, the Taiwanese price of 2 421 EUR/tonne in 2022 and 1 954 EUR/tonne was only minimally lower than the Union industry price and was substantially above the Chinese price. In addition, the Taiwanese exports over the two-year-period 2022 to 2023 only constitute around half the total volume of the Chinese exports.

• (207) Therefore, the Commission did not consider the imports from Taiwan as a contributing factor that could attenuate the causal link between the Chinese exports and the injury.

• (208) Imports from Mexico and other third countries have substantially decreased over the period considered and especially in the investigation period.

• (209) Therefore, the Commission did not consider the imports from Mexico or other third countries as a contributing factor that could attenuate the causal link between the Chinese exports and the injury. Also, cumulatively imports from all third countries including Taiwan show a decrease over the period considered and have not contributed to the injury.

5.2.2.   Export performance of the Union industry

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

Table 13

Export performance of the sampled Union producers

	2020	2021	2022	Investigation period
Export volume (tonnes)	[12 000 – 13 000 ]	[10 000 – 11 000 ]	[9 000 – 10 000 ]	[6 000 – 7 000 ]
Index	100	87	79	54
Average price (EUR/tonne)	[1 550 – 1 600 ]	[1 700 – 1 750 ]	[2 650 – 2 700 ]	[2 340 – 2 390 ]
Index	100	109	171	150
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (211) The export volume declined over the period considered by 48 %. The average export price stayed above the cost of production over the entire period considered. Therefore, we concluded that the exports have not contributed to the injury.

5.2.3.   Consumption

• (212) The consumption has substantially decreased in the IP from [85 000 – 95 000] tonnes in 2022 to [40 000 – 50 000] tonnes in the IP. However, a comparison to the year 2020, in which the consumption was also substantially lower at [50 000 – 60 000] tonnes shows that as long as the Chinese imports only had a market share of 19 %, the Union industry was capable of selling enough volume at a high enough price level to be profitable. Therefore, the decrease in consumption is not an isolated factor that has attenuated the causal link between the Chinese imports and the injury of the Union industry. It is rather the opposite, that the high consumption in 2022 has delayed the injurious effect of the Chinese imports, which already in that year took a high market share.

• (213) Therefore, the decrease in consumption did not attenuate the causal link between the Chinese imports and the injury.

5.2.4.   Captive use

• (214) The Union industry has a very substantial captive use of GFY amounting to about two third of its total production. However, the GFY used captively is cheaper to produce and has generated profit in the downstream market in the IP. The Union producers also have not decreased their sales of GFY in the IP in favour of a captive use, which is evidenced by the fact that the captively used GFY also decreased in volume in the IP. Therefore, it did not contribute to the injury.

5.2.5.   Increase in cost of production

Unit cost of production (EUR/ tonne)	[1 190 – 1 240 ]	[1 300 – 1 350 ]	[1 800 – 1 850 ]	[2 280 – 2 330 ]
Index	100	110	151	191

• (215) The Union industry’s cost of production (COP) increased substantially over the period considered from [1 190 – 1 240] EUR/tonne in 2020 to [2 280 – 2 330] EUR/tonne in the IP, which represents an overall increase of 91 %. The increase is caused by an increase in energy prices and raw material prices, as well as an increase of the fixed costs per tonne produced, due to the lower volumes produced in the IP.

• (216) In general, increases in the COP occur regularly and, under fair market conditions, are taken into account when setting the sales prices. The Commission analysed if there is any factor, that cannot be considered to be offset by price increases on the sales price of GFY under fair market conditions.

• (217) From 2021 to 2022 the COP had already increased substantially from [1 300 – 1 350] EUR/tonne in 2020 to [1 800 – 1 850] EUR/tonne, which was an increase by 37 %. However, due to the high demand in 2022 the Union industry could sell a volume that did not change substantially from the previous year and set the prices at a level that allowed them to stay profitable. This demonstrates that customers were in the position to absorb even high price increases, as long as there is demand.

• (218) From 2022 to the IP the COP increased by 27 %. In the IP, however, the demand decreased significantly. Moreover, as evidenced by Table 4, Chinese prices that were increasing throughout the first three years of the period considered dropped significantly in the IP (by 20 %). Consequently, the Union industry could not negotiate price increases, but instead needed to decrease their sales prices below their costs.

• (219) Increases in the COP of the Union industry can be separated into three categories.

• (220) First, due to the lower volume of GFY sold in the IP, the fixed costs distributed on a smaller base resulted in an increased fixed costs per tonne produced. Such an increase is a direct consequence of the Chinese capture of market shares and the resulting lower volume sold by the Union Industry. To attribute this increase of COP as a separate factor contributing to the injury, would contradict the fact that it is a direct consequence of the low-priced unfair competition by the Chinese exporters. It should therefore not be treated as a separate factor contributing to injury.

• (221) Second, several raw material prices have increased substantially in the IP. Important raw materials like colemanite and limestone, next to other raw materials that only represent a smaller proportion of the raw material costs, have increased substantially. However, these raw materials are mostly imported from international market and all producers that operate in non-distorted markets encounter these price increases and have to pass on this increase to their customers. E.g. in 2022 the top exporters of limestone were United Arab Emirates, Japan, Malaysia, Vietnam, and Oman. The raw material price increase therefore does not constitute an event that has contributed to the injury in a way that would not be counterbalanced by GFY price increases under fair market conditions.

• (222) Third, the energy prices have contributed to the increase of COP. However, this was not an isolated occurrence in the IP. Already in 2022, the energy prices had increased substantially. In Latvia, the average electricity price in the IP even decreased compared to 2022 ⁵⁷. The energy price increase therefore does not constitute an event that has contributed to the injury in a way that would not be counterbalanced by GFY price increases under fair market conditions.

• (223) Increase of COP are not an isolated factor that causes injury. Only, if the GFY sales prices cannot reflect that increase, the increase of COP leads to injury. However, the pressure on the sales prices is directly linked to the dumped Chinese imports during the IP.

• (224) Further, the situation in 2022 demonstrates that under fair market conditions, in which the Chinese exports at lower prices do not lead to a loss of sales volume for the Union industry, the Union industry was in the position to pass on the cost increase to their customers, even when that increase was as high as 37 %. Therefore, had it not been for the Chinese low priced and dumped imports during the IP, the Union industry would have been able, as observed in the previous years of the period considered, to increase its prices to reflect the further increase of its costs. However, the Chinese prices in the IP were even below the COP of the Union Industry.

• (225) This demonstrates that the increase of COP in the IP did not attenuate the causal link between the dumped Chinese imports and the injury.

5.3.   Conclusion on causation

• (226) There was a coincidence in time between the substantial increase of imports from China and the deterioration of the situation of the Union industry. While the injury did not show before the IP due to the high demand, the Chinese import kept the high market share in the IP causing volume injury and exercising pricing pressure.

• (227) The Commission has also investigated other factors of injury and has not found any other factors which contributed to the material injury suffered by the Union industry. In fact, none of the other factors examined, either individually or collectively, put into question that there is a genuine and substantial relationship between the dumped imports from China and the material injury suffered by the Union industry.

6. LEVEL OF MEASURES

• (228) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

6.1.   Injury margin

• (229) 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.

• (230) 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 %.

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

• (232) The complainant indicated in the complaint that a profit level of at least 20 % would reflect the level of profit of the Union industry under normal market conditions, based on its prior performance. The complainant also emphasized that the GFY industry was a highly capital-intensive industry and high profit levels were required to ensure the periodical maintenance and upgrading of the furnaces and the investments in R & D.

• (233) The Commission considered that none of the years during the period under investigation would qualify as representative for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

• (234) In 2020 and 2021, the years preceding the sharp increase of the Chinese imports’ market share, the Union industry achieved a profitability of [13 % – 17 %]. However, both years were affected by the exceptional circumstances of the COVID-19 lockdown and the reduced international trade flows. Therefore, the Commission concluded that that the level of profitability achieved in these years could not be considered representative of normal conditions of competition.

• (235) The year 2022 was an exceptional year, with a surge in consumption of GFY in the Union market, which resulted in both an increase of the market share of Chinese of imports and of sales volumes of the Union producers, who could maintain and even increase their profitability.

• (236) On this basis, the Commission concluded that 2022 would not qualify as a representative year for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

• (237) In search of a period where normal conditions of competitions would prevail, the Commission examined the profitability achieved during the five years prior to the period considered and calculated the average profitability achieved by the two Union producers from 2015 and 2019.

• (238) Such profit margin was established at 20,7 %.

• (239) The Union industry claimed that its level of investments, research and development (R & D) and innovation during the period considered would have been higher under normal conditions of competition. However, these claims were not sufficiently substantiated and were therefore disregarded in the calculation of the target profit.

• (240) 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). The Commission considered that the Union producers did not provide sufficient evidence related to these costs and therefore did not take them into account in the calculation of the non-injurious price.

• (241) On this basis, the Commission calculated a non-injurious price of EUR [3 600 – 4 600] for the like product of the Union industry by applying the target profit margin indicated in recital (238) to the cost of production of the Union producers during the investigation period. No adjustments under Article 7(2d) were done.

• (242) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the cooperating exporting producer Henan Guangyuan in China, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the 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.

Company	Dumping margin	Injury margin
Henan Guangyuan	26,3  %	129,9  %
All other imports originating in China	56,1  %	182,2  %

6.2.   Conclusion on the level of measures

• (243) 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
Henan Guangyuan	26,3  %
All other imports originating in China	56,1  %

7. UNION INTEREST

• (244) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could conclude that it was not in the Union interest to adopt provisional measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.

7.1.   Interest of the Union industry

• (245) Based on the above analysis, the imposition of provisional measures is in the interest of the Union GFY industry. Without measures, Chinese producers will continue to export GFY at low prices on the Union market and exert price pressure, preventing the Union industry to sell GFY at an adequate profit and regain lost market shares.

7.2.   Interest of unrelated importers

• (246) One importer, who purchases the product under investigation from China has provided a questionnaire reply. From the data provided, the Commission understands that the importer appears to be operating with a fixed profit margin. The importer did not put forward any arguments yet. Therefore, the Commission concluded that there is no compelling reason not to impose provisional measures.

7.3.   Interest of users

• (247) Users produce fabrics for a wide range of industrial products, including wind turbines, construction, isolation, or aviation materials.

• (248) Three users, together purchasing around 10 % of the GFY imported from China in the IP, provided questionnaire replies. Their data shows that for two of the users the impact of the measures should not be substantial, as either they only use a minor percentage of the product under investigation from China or the product under investigation only presents a small percentage of their COP and any duty should not endanger the profitability of the company. In addition, it appears that despite the substantial price increases in the product under investigation in the years prior to the IP, the users could stay profitable in the IP. For one user, who purchased the majority of its GFY from China and who currently has a low profitability, it cannot be ruled out that the duties might have an impact on its profitability. Given the low participation from the users, the Commission concluded that the latter is not representative for the users.

• (249) Therefore, the Commission concluded that there is no compelling reason not to impose provisional measures.

7.4.   Conclusion on Union interest

• (250) On the basis of the above, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose provisional measures on imports of GFY originating in China at this stage of the investigation.

8. PROVISIONAL ANTI-DUMPING MEASURES

• (251) On the basis of the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

• (252) Provisional anti-dumping measures should be imposed on imports of glass fibre yarns originating in China in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The amount of the duties was set at the level of the lower of the dumping and the injury margins.

• (253) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Company	Provisional anti-dumping duty
Henan Guangyuan New Material Co., Ltd.	26,3  %
All other imports originating in China	56,1  %

• (254) The individual company anti-dumping duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflects the situation found during this investigation with respect to this company. This duty rate is exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to that specifically mentioned, should be subject to the duty rate applicable to ‘all other imports originating in China’. They should not be subject to any of the individual anti-dumping duty rates.

• (255) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The application of individual anti-dumping duties is only applicable upon presentation of a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this regulation. Until such invoice is presented, imports should be subject to the anti-dumping duty applicable to ‘all other imports originating in China’.

• (256) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (257) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

9. INFORMATION AT PROVISIONAL STAGE

• (258) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

• (259) No comments on the accuracy of the calculations were received.

10. FINAL PROVISIONS

• (260) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

• (261) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

Company	Provisional anti-dumping duty	TARIC additional code
Henan Guangyuan New Material Co., Ltd.	26,3  %	89 FV
All other imports originating in the People’s Republic of China	56,1  %	8 999

Article 2

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 11 October 2024.

For the Commission

The President

Ursula VON DER LEYEN