Commission Implementing Regulation (EU) 2025/81 of 13 January 2025 imposing a provisional anti-dumping duty on imports of flat-rolled products of iron or non-alloy steel plated or coated with tin originating in the People’s Republic of China

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	2025/81	14.1.2025

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, and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1.   Initiation

• (1) On 16 May 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation regarding imports of flat-rolled products of iron or non-alloy steel plated or coated with tin (‘tinplated products’ ²) originating in the People’s Republic of China (‘the country concerned’, ‘China or ‘the PRC’) based on Article 5 of Regulation (EU) 2016/1036 of the European Parliament and of the Council (‘the basic Regulation’). It published a Notice of Initiation in the Official Journal of the European Union ³ (‘the Notice of Initiation’).

• (2) The Commission initiated the investigation following a complaint lodged on 2 April 2024 by EUROFER (‘the complainant’). The complaint was made on behalf of the Union industry of tinplated products in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2.   Registration

• (3) The Commission made imports of tinplated products subject to registration by Commission Implementing Regulation (EU) 2024/2731 of 24 October 2024 (‘the registration Regulation’) ⁴.

1.3.   Interested parties

• (4) In the Notice of Initiation, the Commission invited interested parties to contact it 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, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

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

1.4.   Comments on initiation

• (6) Several parties opposing the potential imposition of anti-dumping duties provided comments on initiation, arguing that the complaint did not contain evidence to indicate that the Union industry suffered any material injury, nor that it was facing a threat of injury, and is therefore procedurally deficient.

• (7) First, to demonstrate the alleged lack of evidence in the complaint concerning the material injury suffered by the Union industry, an unrelated importer, Steelforce Packaging BV (‘Steelforce’), pointed to the performance of the Union industry presented in the complaint. Specifically, Steelforce claimed that the average sales prices remained above average cost of production both in 2022 and in the investigation period used in the complaint, which ran from October 2022 to September 2023 (‘Complaint IP’), resulting in the Union industry being profitable during that period.

• (8) Steelforce also contended that, rather than such positive performance being a temporary trend, as the complainant claimed, it was the negative performance in 2020 and 2021 which was of temporary nature, due to the overall disruption of Union’s economy caused by the COVID-19 pandemic, which dramatically reduced demand. Steelforce alleged that years 2018 or 2019 would also show a generally positive trend for the Union industry.

• (9) Furthermore, Steelforce claimed that the Union industry’s market share remained very high and largely stable. All these elements showed that the Union industry did not suffer any injury.

• (10) Steelforce further claimed the Union industry is not threatened by further imminent injury either, because, as they are not suffering any material injury, any threat can thus only be of future harm.

• (11) Steelforce also argued that the complaint’s assertion that imports from China were suppressing and depressing Union industry’s prices was unfounded since it was based on data from only one unnamed Union producer in the complaint, and this data was also not disclosed, precluding Steelforce from properly exercising their right of defence as they could not meaningfully comment on that data or assess the size of the Union producer providing the data.

• (12) Finally, Steelforce claimed that the quarterly data on profitability presented in the complaint was not conclusive to the existence of a threat of injury due to the natural seasonality of demand in this market.

• (13) Notwithstanding the above, Steelforce claimed that all the evidence and claims presented in the complaint were outdated. First, it argued that the Complaint IP ended in Q3 2023 while the investigation was initiated in May 2024, and thus any evidence provided in the complaint demonstrated, at best, past injury and not its persistence in the present. Second, it claimed that the Notice of Initiation did not show that the Commission would have strived to update the figures in the complaint in order to comply with Article 5 of the basic Regulation. Steelforce thus maintained that the investigation was unlawful claiming that it violated Article 5(3) of the basic Regulation.

• (14) Similar to Steelforce’s claims from recitals (7) and (13) above, China Iron and Steel Association (‘CISA’) claimed that the complaint lacked positive evidence justifying the initiation of the proceeding and that the complainant relied excessively on confidential information which did not allow other interested parties to meaningfully respond to allegations contained in the complaint. In particular, CISA claimed that the period considered selected in the complaint was not representative to lead to reliable findings in these proceedings, contrary to the requirements of Article 6(1) of the basic Regulation, due to the effects that the COVID-19 pandemic had on the situation on the market. In view of the lockdowns disrupting production, demand, and supply chains in 2020 and 2021, CISA requested the Commission to adopt a period considered which would start in 2019 or 2018 reflecting normal business conditions, so that the extraordinary nature of the Union industry’s performance in 2020 and 2021 would be visible in the trends of micro and macroeconomic indicators.

• (15) CISA also argued that the complaint failed to address several factors which had a bearing on the state of the Union industry, including return on investment, ability to raise capital, cash flow, wages, and export performance. Concerning the quality of the non-confidential version of the complaint, CISA claimed that the fact that Union consumption, market share and the macroeconomic dataset was presented as ranges instead of actual figures prevented interested parties from responding to the claims contained in the complaint and therefore breached their right of defence.

• (16) The complainant argued that the focus of the material injury assessment in the complaint was based on annual figures and that quarterly trends were provided for further context and as evidence of a threat of injury. Concerning the non-confidential version of the complaint, the complainant argued that the injury data was given in ranges to respect antitrust policies which require that aggregated data must come from at least five companies to be shared, and the complainant producers are only four.

• (17) Concerning the claims that there was no sufficient evidence that the Union industry suffered injury in the complaint, the Commission noted that Article 5(2) of the Basic Regulation states that relevant (not necessarily all) factors and indices having a bearing on the state of the Union industry, must show deterioration in order for material injury to be established.

• (18) The complaint showed that after an uptick in 2022, the average profit margin decreased substantially in the Complaint IP. The Commission also noted that the open version of the complaint provided actual figures for the Union sales of the complainant which showed a considerable decline between 2020 and the Complaint IP. The figures of the complainant’s production and employment both showed a considerable drop over that period. In addition, contrary to the claim of Steelforce set out in recital (9), it was clear from the complaint that the market share of the Union industry went down while Chinese imports nearly doubled between 2020 and the Complaint IP. The macroeconomic data, which was provided in ranges in the complaint, also showed declining production, declining sales, and a drop in employment. Therefore, the Commission concluded that the data provided in the complaint could be considered as sufficient evidence pointing to injury.

• (19) The use of ranges instead of actual figures for confidential information in the complaint is general practice if they provide sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. The ranges provided in the complaint showed the trend over the period considered and were therefore found to be sufficiently detailed.

• (20) As to Steelforce’s claims from recital (11), the Commission noted that Annex 12 of the non-confidential version of the complaint contained a price comparison between the sales price of all complaining Union producers to unrelated customers in the EU and the price of Chinese imports based on statistics which showed that Chinese prices were lower than prices of the Union industry in the complaint investigation period.

• (21) Annex 12 of the complaint also contained the aggregate sales volumes of the complaining Union producers to unrelated customers in the EU which showed a steady decline over the period considered with a sharp drop between 2022 and the Complaint IP while the volume of Chinese imports increased significantly over the same period.

• (22) In addition, the complainant provided, in the confidential version of the complaint, individual examples from Union producers which had to decrease their sales price to be able to sell their products and the complainant summarized the essence of these confidential documents in points 194 and 195 of the complaint.

• (23) The Commission thus concluded that the complainant provided sufficient evidence on price undercutting, volume injury and price suppression required under Article 5(2) of the basic Regulation for the initiation of the investigation.

• (24) The Commission noted that the period of investigation used for the purpose of the complaints is often different from the one used in the proceeding itself, given the time lapse between the lodging of a complaint and the initiation of an investigation. The basic Regulation does not set any legal obligation concerning the period for the data contained in the complaint but stipulates that it should contain information reasonable available to the complainant. The Commission considered that the data contained in the complaint was sufficiently recent to justify the initiation of the investigation.

• (25) Concerning the period considered for the injury trends, the Commission noted that in line with its usual practice, it analysed the injury indicators for four years preceding the IP and that the effects of the COVID-19 pandemic were assessed under the injury and causation analysis in recitals (235), (293), (300) and (323). Therefore, the Commission concluded that the period considered was appropriate to assess the injury trends.

• (26) On the basis of the above, the Commission concluded that the complaint contained sufficient evidence to indicate that the Union industry suffered injury, that imports from China were dumped and that there was a causal link between dumping and injury. The Commission found that this evidence was sufficient for the initiation of the investigation and rejected the arguments of the other parties in this respect.

1.5.   Sampling

• (27) 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

• (28) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of representativity in terms of the production and sales quantity of the product under investigation during the investigation period and geographic location. This sample consisted of three Union producers. The sampled Union producers accounted for more than 80 % of estimated total Union production and more than 70 % of estimated Union sales of the like product. The Commission invited interested parties to comment on the provisional sample.

• (29) Given that no comments were received on the provisional sample, the Commission confirmed it to be the definitive sample as well. The sample is representative of the Union industry.

Sampling of unrelated importers

• (30) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

• (31) One unrelated importer provided the requested information and agreed to be included in the sample. In view of the low number of replies, the Commission decided that sampling was not necessary.

Sampling of exporting producers

• (32) 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 PRC to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

• (33) Eleven exporting producers in China provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three based on the largest representative quantity of exports to the Union which could reasonably be investigated within the time available.

• (34) In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of China were consulted on the selection of the sample. No comments were received.

1.6.   Questionnaire replies and verification visits

• (35) The Commission sent 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’).

• (36) Furthermore, the complainant provided in the complaint sufficient evidence of raw material distortions in China regarding the product concerned. Therefore, as announced in the Notice of Initiation, the investigation covered those raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation. For this reason, the Commission sent additional questionnaires in this regard to the GOC.

• (37) Questionnaires for exporting producers, Union producers, unrelated importers, and users were made available online ⁵ on the day of initiation.

• (38) The Commission received questionnaire replies from the three sampled Union producers, the three sampled exporting producers, one unrelated importer, and two users. Moreover, it received a questionnaire concerning macroeconomic data from the complainant.

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

Union producers

• — Tata Steel IJmuiden BV, IJmuiden, Netherlands

• — ThyssenKrupp Rasselstein GmbH, Andernach, Germany

• — Arcelor Mittal España SA, Aviles, Spain, and its related company:

• — Arcelor Mittal Avellino & Canossa S.p.a., Milano, Italy

Importers

• — Steelforce Packaging BV, Antwerp, Belgium

Exporting producers

• — Baoshan Iron and Steel Co., Ltd., Shanghai

• — WISCO Nippon Steel Tinplate Co., Ltd., Wuhan

• — Shougang Jingtang United Iron & Steel Co., Ltd., Caofeidian

1.7.   Investigation period and period considered

• (40) The investigation of dumping and injury covered the period from 1 April 2023 to 30 March 2024 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2020 to the end of the investigation period (‘the period considered’).

2. PRODUCT UNDER INVESTIGATION, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

• (41) The product under investigation is tin mill flat-rolled products, of iron or non-alloy steel, coated or plated with tin, whether or not coated with a plastic material and/or varnished (‘tinplated products’), currently falling under CN codes 7210 11 00 , 7210 12 , ex 7210 70 , 7210 90 40 , ex 7210 90 80 , 7212 10 , and ex 7212 40 (TARIC codes 7210 70 10 15, 7210 70 80 20, 7210 70 80 92, 7210 90 80 20, 7212 40 20 10, 7212 40 80 12, 7212 40 80 30, 7212 40 80 80, and 7212 40 80 85) (‘the product under investigation’).

• (42) Tinplated products are a packaging material, mainly used in the production of tin cans. They form part of the steel sector as they are mainly produced from cold rolled steel coils which are then electroplated with tin.

2.2.   Product concerned

• (43) The product concerned is product under investigation originating in the PRC (‘the product concerned’).

2.3.   Like product

• (44) The investigation showed that the following products have the same basic physical chemical and technical characteristics as well as the same basic uses:

• — the product concerned when exported to the Union;

• — the product under investigation produced and sold on the domestic market of China; and

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

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

2.4.   Claims regarding product scope

• (46) One exporting producer, Baosteel Group, and CISA both requested a product exclusion for double reduced tinplated products (‘DRT’). They both claimed that DRT has distinct production process and physical characteristics compared to other tinplated products, insofar that it is thinner, flatter, and easier to process, while also having higher yield strength. Furthermore, DRT has its own production standards (DIN EN 10203, DIN EN 10202, and JIS G3303) and Baosteel Group claimed that there is lack of supply of such tinplated products in the Union.

• (47) CISA additionally asked to exclude drawn and ironed tinplated products (‘DIT’) from the product scope as well. They claimed that DIT production includes ironing the product which has already been drawn out into a cylinder, a process which reduces wall thickness while maintaining the diameter of the cylinder. This makes the cans lightweight and strong enough to withstand internal pressures, specifically tailored for its main application – use as beverage cans for carbonated drinks. CISA claimed that DIT and other tinplated products are thus not substitutable and highlighted that DIT also has its own production standard (DIN EN 10202). CISA further claimed that EU demand for DIT often exceeds supply and pointed out that US Department of Commerce (‘DOC’) has accepted this exclusion within Section 232 measures on steel and aluminium (Section 232 of the US Trade Expansion Act of 1962).

• (48) The complainant disputed those claims, and they were not supported by any users. The complainant argued that DRT was produced on the same production line and equipment, the only specificity being that rolling speeds in the final stage of the process are higher. Furthermore, standards DIN EN 10203, DIN EN 10202, and JIS G3303 cover not only DRT but also single reduced tinplated products, while Union producers’ catalogues show that DRT and single reduced tinplated products often have same uses. In addition, the complainant argued that the fact that certain importers in the United States obtained from the US Bureau of Industry and Security temporary authorisation to import DIT based on the absence of US production of this type of tinplated products has no bearing to the present investigation.

• (49) Baosteel Group and CISA did not provide evidence and the Commission could not therefore conclude that DRT has any special physical, chemical, or technical characteristics which would warrant its exclusion from the product scope. At the same time, it is clearly covered by the product definition from Section 2 of the Notice of Initiation. Double reduced tinplated product is therefore a part of product concerned and thus within the scope of investigation. Paragraphs 28, 30, and 32 of the complaint discuss and consider specifically double reduced tinplated products in the production process while the structure of product control numbers (‘PCNs’) in the questionnaires has a category for thickness (‘up to 0,179 mm’) which covers the double reduced tinplated products ⁶. The Commission therefore decided to provisionally reject this request.

• (50) Regarding DIT, like for DRT, the production standard DIN EN 10202 (which they both share) does not cover just this one particular type of product. Furthermore, the producers’ catalogues show that they sell DIT cans to the food and beverage packaging industry, so the same users as other types of tinplated products. Furthermore, even if production of DIT includes a specific step in the process, this does not suggest that it would in any way not be covered by the product definition from Section 2 of the Notice of Initiation. Finally, as concerns the fact that US has excluded this product under Section 232 measures, this decision was taken within a legal framework entirely different from the investigation at hand. In any case, this decision was taken because there was no sufficient production of DIT of satisfactory quality in the United States of America, which was not demonstrated to be the case for the Union. The Commission therefore provisionally rejected this request.

3. DUMPING

3.1.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation

• (51) 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 regarding China, the Commission considered it appropriate to initiate the investigation regarding the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

• (52) Consequently, 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 tinplated products. Eleven exporting producers submitted the relevant information.

• (53) In order 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 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.

• (54) No reply was received from the GOC. 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.

• (55) 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.

• (56) On 19 August 2024, the Commission informed interested parties by a note (‘the First Note’) 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 tinplated products. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified Argentina, Brazil, Malaysia, Thailand, and Türkiye as possible representative countries.

• (57) The Commission received comments on the First Note from the complainant, and the Chinese exporting producers Baoshan Iron and Steel and WISCO-Nippon Steel (‘Baosteel Group’) and Shougang Jingtang United Iron and Steel Co., Ltd. (‘Shougang Jingtang’ or ‘Shougang’). These comments were addressed in the Second Note and are summarised below.

• (58) Eurofer requested that the Commission use Brazil as representative country as set out in the complaint, and if this was not possible, to use Argentina.

• (59) The Commission rejected Brazil as a representative country in the First Note as the producer of tinplated products in the complaint was not profitable in 2023, and Eurofer did not provide an alternative.

• (60) The Commission considered Argentina in the First Note as an appropriate representative country and would consider it further in the Second Note.

• (61) Eurofer also made comments on the use of Malaysia, Thailand, and Türkiye as representative country, arguing that Asian and other neighbouring countries including Türkiye are heavily affected by cheap Chinese imports of steel and both Türkiye and Malaysia have ongoing anti-dumping investigations targeting Chinese hot rolled steel. Moreover, Eurofer argued that Malaysia has licensing requirements on exports of iron ore and the annual reports of Malaysian producers have a different financial year from China. Regarding Thailand, Eurofer argued that the GDP per capita is less than half of China, the steam coal market in Thailand is distorted and there is no 2023 financial data readily available for any Thai producer of the product under investigation. Eurofer claimed concerning Türkiye that its coal market is distorted by imports from Russia. However, none of these comments would exclude either country from consideration in the Second Note.

• (62) The Baosteel Group agreed with the Commission in its rejection of Brazil as representative country, confirmed the difficulties identified in the First Note for the use of Argentina, because of the absence of cold-rolled steel imports and the unreasonably high profit of the identified producer of tinplated products, and Türkiye, because of high level of Russian imports of various FOP, and noted that either Malaysia or Thailand could be suitable.

• (63) Shougang noted the Commission’s arguments in the First Note and commented that Argentina or Thailand could be suitable candidates for representative country.

• (64) On 18 October 2024, the Commission informed interested parties by a second note (‘the Second Note’) on the relevant sources it intended to use for the determination of the normal value, with Malaysia as the representative country.

• (65) It also informed interested parties that it would establish selling, general and administrative (‘SG&A’) costs and profits based on available information for the company Perusahaan Sadur Timah Malaysia (Perstima) Berhad, a producer in the representative country.

• (66) Comments were received from the ‘Baosteel Group’ and Shougang Jingtang United Iron and Steel.

• (67) Baosteel Group made specific comments on the use of particular benchmarks for raw materials, which will be addressed below. They also commented on the calculation of the SG&A costs for the company selected for this source of data.

• (68) Shougang Jingtang also commented on the use of particular benchmarks, which will also be addressed below.

3.2.   Normal value

• (69) 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’.

• (70) 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 to here as ‘SG&A’).

• (71) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, the application of Article 2(6a) of the basic Regulation was appropriate.

3.2.1.   Existence of significant distortions

• (72) In recent investigations concerning the steel sector in China ⁷, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

• (73) In those investigations, the Commission found that there is substantial government intervention in China resulting in a distortion of the effective allocation of resources in line with market principles ⁸.

• (74) In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under investigation, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation ⁹, 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 ¹⁰.

• (75) 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 ¹¹.

• (76) 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 when maintaining insolvent firms afloat and when allocating land use rights in China ¹².

• (77) The Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation ¹³, 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 ¹⁴.

• (78) As in previous investigations concerning the iron and steel 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.

• (79) The Commission did so based on the evidence available on the file, including the evidence contained in the complaint, 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 ¹⁵ (‘the Report’), which relies on publicly available sources. 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.

• (80) The Commission further supplemented this evidence 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.

• (81) The complaint, referring to 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, which was first published on 20 December 2017 ¹⁶, as well as to the updated Report, alleged that the Chinese economic model is based on certain basic axioms, including the concept of the ‘socialist market economy’, the leading role of the Chinese Communist Party (‘CCP’) or the complex industrial planning system, which provide for and encourage manifold government interventions.

• (82) Such substantial government interventions are at odds with the free play of market forces, resulting in distorting the effective allocation of resources in line with market principles. Given that Chinese steel product markets are affected by significant distortions resulting from those foundations of the Chinese economic model, the complaint concluded that the normal value should be established by using non-distorted production costs in a representative country.

• (83) The complaint provided examples of elements pointing to the existence of distortions, as listed in the first to sixth indent of Article 2(6a)(b) of the basic Regulation. In addition to references to the relevant parts of the Report, the complaint pointed out that:

• — in the steel sector – hot-rolled flat steel being by far the biggest input in the production of the product under investigation – a substantial degree of ownership by the Chinese Government persists. Moreover, the government is aiming to consolidate 60 % to 70 % of iron and steel production to around ten large-scale enterprises by 2025. Many of the major producers of the product under investigation are state-owned. The evidence available therefore suggests that producers of the product under investigation in China are subject to the same ownership, control and policy supervision or guidance by the GOC and hence do not operate in accordance with market principles;

• — CCP cells existed in 70 % of around 1,86 million privately owned companies in 2017, with growing pressure from the CCP organisations to have the final say over business decisions within their respective companies. These rules apply in general in the Chinese economy, including to the producers of tinplated products and the suppliers of their inputs;

• — there is publicly available information manifesting the links between Chinese steel producers and local/regional authorities in China, such as the 2016 Semi-Annual Report of the company Baoshan Iron & Steel Ltd.;

• — the GOC has measures in place to induce operators to comply with the public policy objectives of supporting particular industries, including the production of the product under investigation and the sourcing of raw materials used for producing it (mainly hot-rolled flat steel). Chinese producers of hot-rolled flat steel enjoyed benefits under a number of subsidy programs as being part of a supported industry, as indicated in the Catalogue for Guiding Industry Restructuring (2011 Version) (2013 Amendment);

• — Chinese tinplated products producers are affected by the distortions of wage costs, both directly (when producing the product under investigation) and indirectly (when having access to capital or inputs from companies subject to wage cost distortions);

• — the substantial intervention of the GOC in the financial system has led to the market conditions being severely affected, including within the Chinese tinplated products industry;

• — in addition to the product under investigation being affected to significant distortions, all input costs (including hot-rolled flat steel and the underlying raw materials (i.e., iron ore, coke, scrap, and ferroalloys), tin, energy, land, financing, labour, etc.) are also affected by significant distortions.

• (84) In the sector of the product under investigation – the iron and steel sector – a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation. Both public and privately owned enterprises in the sector are subject to policy supervision and guidance. Examples include the Ansteel Group ¹⁷ and the Baowu Steel Group ¹⁸, which are both State Owned Enterprises (‘SOEs) under the central SASAC; the Baotou Steel Group, an SOE held by the Inner Mongolian Government ¹⁹; as well as the Shougang Group ²⁰, an SOE 100 % held by the Beijing State-Owned Asset Management Ltd. ²¹.

• (85) While more specific information may not be available for the product under investigation, the sector represents a sub-sector of the iron and steel industry and the findings concerning the iron and steel sector are therefore deemed indicative also for the product under investigation.

• (86) The latest Chinese policy documents concerning the iron and steel sector confirm the continued importance which GOC attributes to the sector, including the intention to intervene in the sector to shape it in line with the government policies. This is exemplified by the MIIT Guiding Opinion on Fostering a High Quality Development of Steel Industry which calls for further consolidation of the industrial foundation and significant improvement in the modernization level of the industrial chain ²².

• (87) Specifically, this Guiding Opinion requires the GOC to ‘[p]romote mergers and reorganizations of enterprises. Encourage leading enterprises in the industry to implement mergers and reorganizations and create a number of world-class super-large steel enterprise groups. Relying on the industry's dominant enterprises, cultivate 1 to 2 specialized leading enterprises in the fields of stainless steel, special steel, […].’

• (88) Another example of the GOC’s intention to intervene in the sector can be found in the 14th Five-Year Plan on Developing the Raw Material Industry (‘14th FYP’) according to which the sector will ‘adhere to the combination of market leadership and government promotion’ and will ‘cultivate a group of leading companies with ecological leadership and core competitiveness’ ²³, and also in the MIIT 2023 Work Plan on the Stable Growth of the Steel Industry ²⁴ which sets the following objectives: ‘In 2023, […] the investment in fixed assets in the entire industry shall maintain a steady growth, and the economic benefits shall be significantly improved; the industry’s R&D investment shall eventually reach 1,5 %; the industry’s added value growth shall reach about 3,5 %; in 2024, the industry development environment and industry structure shall be further optimized, the move towards high-end, intelligent, and green products shall continue, and the industry added value growth shall exceed 4 %’.

• (89) The Work Plan also foresees government mandated corporate consolidation of the steel sector: ‘[e]ncourage industry-leading enterprises to implement mergers and acquisitions, build world-class super-large iron and steel enterprise groups, and foster the optimal layout of national iron and steel production capacity. Support specialized enterprises with leading power in particular steel market segments to further integrate resources and create a steel industry ecosystem. Encourage iron and steel enterprises to carry out cross-regional […] mergers and reorganizations […]. Consider giving greater policy support for capacity replacement to iron and steel enterprises that have completed substantive mergers and reorganizations.’

• (90) Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the sector can be seen at the provincial level, such as in Hebei where the provincial government released the Three-Year Action Plan on Cluster Development in the Steel Industry Chain in 2020. This plan requires the government to ‘steadily implement the group development of organizations, accelerate the reform of mixed ownership of state-owned enterprises, focus on promoting the cross-regional merger and reorganization of private iron and steel enterprises, and strive to establish 1-2 world-class large groups, 3-5 large groups with domestic influence as the support’ and to ‘further expand the recycling and circulation channels of scrap steel, strengthen the screening and classification of scrap steel.’ ²⁵

• (91) Hebei’s plan in the steel sector states: ‘Adhere to structural adjustment and highlight product diversification. Unswervingly promote the structural adjustment and layout optimization of the iron and steel industry, promote the consolidation, reorganization, transformation and upgrading of enterprises, and comprehensively promote the development of the iron and steel industry in the direction of large-scale enterprises, modernization of technical equipment, diversification of production processes, and diversification of downstream products’.

• (92) The Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14th FYP foresees the ‘construction of characteristic steel production bases […], build 6 characteristic steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhouou, etc., and improve the scale, intensification and specialization of the industry. Among them, by 2025, the production capacity of pig iron in Anyang will be controlled within 14 million tons, and the production capacity of crude steel will be controlled within 15 million tons.’ ²⁶

• (93) Further industrial policy objectives can also be found in the planning documents of other provinces, such as Jiangsu ²⁷, Shandong ²⁸, Shanxi ²⁹, Liaoning Dalian ³⁰ or Zhejiang ³¹.

• (94) Another example of effective steering by the GOC through the plans is the Notice of the Ansteel Group Co., Ltd.’s Party Committee on conscientiously studying, publicizing and implementing the spirit of the Party’s 20th National Congress ³². The notice claims that the Ansteel Group will conscientiously implement the guiding plans and better introduce them to Party members, cadres and employees of the entire group.

• (95) As to the GOC being 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, given that the product under investigation represents a subsector of the steel sector, information available with respect to steel producers is relevant also to the product under investigation.

• (96) For instance, the Chairman of the Board of Directors and the General Manager of Baoshan Iron and Steel Ltd., a tinplated products producer whose controlling shareholder is the Baowu Steel Group, also serve as the company’s Party Committee Secretary and Deputy Secretary respectively ³³.

• (97) Also the Chairman of the Board of Directors of Wuhan Iron and Steel Group, also controlled by the Baowu Steel Group, serves as the Party Committee Secretary ³⁴.

• (98) Moreover, ‘Wuhan Iron and Steel Group held the tenth centralized study and discussion of the Party Committee Theory Study Group in 2022 to convey and study the spirit of the Central Economic Work Conference and promote the implementation of the decisions and arrangements of the 20th National Congress of the Party and the spirit of the Central Economic Work Conference in Wuhan Iron and Steel Group. [The] General Representative of China Baowu Wuhan Headquarters, Secretary of the Party Committee and Chairman of Wuhan Iron and Steel Group, presided over the meeting and put forward requirements for implementing the requirements of the Party Central Committee, the Hubei Provincial Party Committee and the China Baowu Party Committee, and further implementing the spirit of the Central Economic Work Conference’ ³⁵.

• (99) The Chairman of the Board of Directors of the Baotou Steel Union, belonging to the Baotou Steel Group, serves also as the company’s Party Secretary, and the Executive Manager of the company as well as the Chairman of the company’s trade union are both Deputy Party Secretaries ³⁶.

• (100) Finally, within the Shougang Group, the Chairman of the Board of Directors serves as the Party Committee Secretary while the Executive Manager is the Deputy Secretary of the company’s Party Committee ³⁷.

• (101) In certain cases, the company’s articles of association of a company will demonstrate CCP allegiance. For example, Article 134 of the Articles of Association of tinplated products producer Baoshan Iron and Steel Ltd. stipulates that ‘[t]he company’s Party committee shall perform its duties in accordance with the Constitution of the Communist Party of China and other party regulations: (1) Ensure and supervise the implementation of the Party and state policies in the company’ ³⁸.

• (102) Article 3 of the Articles of Association of the China Foundry Association stipulates that the Association accepts the business guidance, supervision, and management by the respective Party entities, e.g. the SASAC and Ministry of Civil Affairs, and provides the necessary conditions for its participation ³⁹.

• (103) An identical provision can be found in Article 3 of the Articles of Association of the China Iron and Steel Association ⁴⁰, of which major iron and steel producers are members.

• (104) Policies discriminating in favour of domestic producers or otherwise influencing the market in the sense of Article 2(6a)(b), third indent of the basic Regulation are in place in the iron and steel sector, which are generally applicable to the product under investigation given that the product under investigation represents one of its subsectors.

• (105) The iron and steel industry keeps being regarded as a key industry by the GOC ⁴¹. This is confirmed in the numerous plans, directives and other documents focused on the sector, which are issued at national, regional, and municipal level. Under the 14th FYP, the GOC earmarked the iron and steel industry for transformation and upgrade, as well as optimization and structural adjustment ⁴².

• (106) The 14th FYP on Developing the Raw Materials Industry, applicable also to the iron and steel industry, lists the sector as the ‘bedrock of the real economy’ and ‘a key field that shapes China’s international competitive edge’ and sets a number of objectives and working methods which would drive the development of the sector in the time period 2021-2025, such as technological upgrade, improving the structure of the sector (not least by means of further corporate concentrations) or digital transformation ⁴³.

• (107) The Work Plan on the Stable Growth of the Steel Industry (see recital (88)) demonstrates how the focus of the Chinese authorities on the sector is put into the wider context of the GOC steering the Chinese economy: ‘[s]upport steel companies to closely follow the needs of new infrastructure, new urbanization, rural revitalization, and emerging industries, dock with major engineering projects related to the “14th Five-Year Plan” in various regions, and make every effort to ensure steel supply. Establish and deepen upstream and downstream cooperation mechanisms between steel and key steel-using sectors such as shipbuilding, transportation, construction, energy, automobiles, home appliances, agricultural machinery, and heavy equipment, carry out production-demand docking activities, and actively expand steel application fields’ ⁴⁴.

• (108) Additionally, in relation to iron ore, which is a key raw material used for the production of the product under investigation, according to the 14th FYP on Developing the Raw Materials Industry, the State plans to ‘rationally develop domestic mineral resources. Strengthen the exploration of iron ore […], implement preferential tax policies, encourage the adoption of advanced technology and equipment to reduce the generation of mining solid waste’ ⁴⁵ leading to the establishment of a system for the reserves of iron ore output and mineral lands that will ‘become an important measure to stabilize the iron ore market price and ensure the safety of the industrial chain’ ⁴⁶.

• (109) At local level, such as in the Hebei province, the authorities foresee the following for the iron and steel sector: ‘new project investment discount subsidy; explore and guide financial institutions to provide low-interest loans for iron and steel enterprises to switch to new industries, and at the same time, the government will provide discount subsidies’ ⁴⁷.

• (110) In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of the main raw materials used in the manufacturing of the product under investigation. Such measures prevent market forces from operating freely.

• (111) This investigation has not revealed any evidence that the discriminatory application or inadequate enforcement of bankruptcy and property laws in the iron and steel sector, according to Article 2(6a)(b), fourth indent of the basic Regulation would not affect the manufacturers of the product under investigation.

• (112) The product under investigation is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation. Those distortions affect the sector both directly (when producing the product under investigation or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in China) ⁴⁸.

• (113) No evidence was submitted in the present investigation demonstrating that the sector of the product under investigation is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation.

• (114) The Work Plan on the Stable Growth also exemplifies this type of government intervention very well: ‘Encourage financial institutions to actively provide financial services to steel companies that implement mergers and reorganizations, layout adjustments, transformation and upgrading, in accordance with the principles of risk control and business sustainability’. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (115) Finally, the Commission recalls that to produce the product under investigation, a number of inputs is needed. When the producers of the product under investigation purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.

• (116) As a consequence, not only the domestic sales prices of the product under investigation are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy, and raw materials are present throughout China. This means, for instance, that an input that was produced in China by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth.

• (117) In sum, the evidence available showed that prices or costs of the product under investigation, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation, as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case.

3.2.2.   Comments by interested parties

• (118) The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the Report and the additional evidence provided by the complainant, 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.

• (119) During the investigation comments were received from CISA and Baoshan Iron and Steel Ltd.

• (120) Firstly, CISA submitted that the Report fails to meet the standards of impartial and objective evidence and evidence of sufficient probative value. It argued that the fact that the Report has been drafted with a deliberate objective in mind, namely facilitating Union industries to lodge a complaint in the area of trade measures, automatically removes any likelihood for an impartial and objective analysis of the Chinese economy.

• (121) CISA also submitted that the probative value of the Report is doubtful as the Report deliberately omits factual circumstances, elements, and conclusions, which would contradict or weaken the partial purpose for which it has been prepared.

• (122) Furthermore, CISA argued that the Commission cannot rely on past cases to find positive evidence of dumping practices in the present investigation, as the complainant did to prove the existence of significant distortions. The burden of proof in anti-dumping investigations requires an investigating authority to positively establish the existence of dumping practices.

• (123) Regarding CISA’s claim that the Report is not objective or impartial, the Commission noted that the Report is a comprehensive document based on extensive objective evidence, including legislation, regulations and other official policy documents published by the GOC, third party reports from international organisations, academic studies and articles by scholars, and other reliable independent sources. It was made publicly available since December 2017 so that any interested party would have ample opportunity to rebut, supplement or comment on it and the evidence on which it is based.

• (124) The Commission has since reviewed the Report and published an updated version in April 2024, as set out in recital (81) ⁴⁹. CISA did not provide any rebuttal on the substance and evidence contained in the Report. Therefore, the claim was rejected.

• (125) Moreover, complainants can rely on past investigations evidence and findings, to the extent they are relevant and that their legality has not been put aside by a judicial authority. Article 2(6a) of the basic Regulation ensures that proceedings are neutral and impartial, and that all parties’ rights of defence are respected throughout the investigation.

• (126) The Commission noted that the possibility offered to complainants to put forward allegations and evidence on possible distortions of prices and costs in countries where significant distortions induced by the State would possibly exist cannot be interpreted as an unfair and unjust practice which encourages the adducing of such allegations.

• (127) Further, the Commission’s determination on the actual existence and impact of significant distortions and the consequent use of the methodology prescribed by Article 2(6a)(a) occurs at the time of the provisional and/or definitive disclosure as result of an investigation. Therefore, the claim was rejected.

• (128) Secondly, CISA and Baoshan Iron and Steel Ltd. submitted that Article 2(6a) of the basic Regulation appears to be incompatible with the WTO Antidumping Agreement (‘WTO ADA’). Article 2.2 of the WTO ADA does not recognize the concept of significant distortions and that it does not allow the use of data from an appropriate representative country or international prices to construct the normal value. Specifically, Article 2.2 of the WTO ADA only permits using the cost of production in the country of origin plus a reasonable amount for administrative, selling, and general costs and profits when constructing the normal value.

• (129) Baoshan Iron and Steel Ltd. argued that the significant distortions in the exporting country would need to fall under the definition of either sales not in the ‘ordinary course of trade’ or a ‘particular market situation’, but that the concept of significant distortions does not fall in any of these categories.

• (130) According to CISA and Baoshan Iron and Steel Ltd., Article 2(6a) of the basic Regulation seems incompatible with Article 2.2.1.1 and with the Appellate Body’s interpretation thereof, provided in the EU – Biodiesel (Argentina) (DS473) case (‘EU – Biodiesel’) which established that investigating authorities must use the product costs actually incurred by producers or exporters for the calculation of constructed normal values.

• (131) As such, CISA and Baoshan Iron and Steel Ltd. requested that the Commission accepts the domestic prices and costs reported by the cooperating Chinese exporters, thus rejecting the existence of alleged significant distortions.

• (132) The Commission considered that the provisions of Article 2(6a) are fully consistent with the European Union's WTO obligations and the jurisprudence cited by CISA and Baoshan Iron and Steel Ltd. At the outset, the WTO Report on EU – Biodiesel did not concern the application of Article 2(6a) of the basic Regulation, but of a specific provision of Article 2(5) of the basic Regulation. Moreover, WTO law as interpreted by the WTO Panel and the Appellate Body in EU – Biodiesel allows the use of data from a third country, duly adjusted when such adjustment is necessary and substantiated. The existence of significant distortions renders costs and prices in the exporting country inappropriate for the construction of normal value.

• (133) In any event, the case-law of the EU Courts has already confirmed that while Article 2(6a) of the basic Regulation sets out a ‘special regime laying down rules for determining normal value in the case of exports from countries whose domestic market has been shown to have significant distortions, as defined in that provision’, WTO law ‘does not however, include specific rules for calculating normal value in such situations’ ⁵⁰. The arguments of CISA, Baoshan Iron and Steel Ltd. therefore cannot be upheld.

• (134) In these circumstances, Article 2(6a) of the basic Regulation envisages the construction of costs of production and sale based on undistorted prices or benchmarks, including those in an appropriate representative country with a similar level of development as the exporting country.

• (135) The Commission therefore rejected this claim by CISA and Baoshan Iron and Steel Ltd.

3.2.3.   Conclusion on the existence of significant distortions

• (136) In view of the above, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as described in the following section.

3.2.4.   Representative country

3.2.4.1.   General remarks

• (137) The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:

• — A level of economic development similar to China. For this purpose, the Commission used countries with a gross national income per capita similar to China on the basis of the database of the World Bank ⁵¹.

• — Production of the product under investigation in that country.

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

• — Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection.

• (138) As explained in recitals (56) and (64), the Commission issued two notes for the file on the sources for the determination of the normal value.

• (139) These notes described the facts and evidence underlying the relevant criteria, and also addressed the comments received by the parties on these elements and on the relevant sources. In the second note on factors of production, the Commission informed interested parties of its intention to consider Malaysia as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

A level of economic development similar to China

• (140) In the First Note on factors of production, the Commission identified Argentina, Brazil, Malaysia, Türkiye and Thailand as countries with a similar level of economic development as China according to the World Bank, i.e. they are all classified by the World Bank as ‘upper-middle income’ countries on a gross national income basis where production of the product under investigation was known to take place.

Availability of relevant public data in the representative country

• (141) The First and Second Notes set out the Commission’s research for readily available public data in the possible representative countries. This data concerned the company that would be the source for the amounts for SG&A costs and for profit; and the data necessary for the benchmarks needed to construct the normal value.

• (142) The First Note found readily available data from tinplated products producers in Argentina, Brazil, Malaysia, Türkiye and Thailand that would make these countries suitable as a representative country. It found, however, that the producer of tinplated products in Brazil was not profitable during 2023 and Brazil could not be considered an appropriate representative country.

• (143) The Commission further analysed imports of the main factors of production into the four potential representative countries in the First Note.

• (144) The analysis showed that the imports into Türkiye of the major factors of production (hot-rolled steel, cold-rolled steel, coke, coking coal, gas coal, steam coal, and hot briquetted iron) were affected by significant imports from the Russian Federation (‘Russia’). All these factors of production were sanctioned inter alia by the Union following the full-scale invasion of Ukraine and thus major export markets became unavailable to the producers of these inputs. This in turn increased the relevant spare capacities in Russia and potentially affected prices of export to other markets in Russia’s proximity, including Türkiye that remained open to the export in question.

• (145) The overcapacity in Russian steel production has been set out in the Commission Staff Working Document on Significant Distortions in the Economy of the Russian Federation for the Purposes of Trade Defence Investigations ⁵². Moreover, a further increase in steel capacity in the coming years is planned ⁵³.

• (146) The Commission also noted that the Ministry of Trade of the Republic of Türkiye imposed anti-dumping duties on imports of hot rolled flat steel products from China, India, Japan and the Russian Federation in October 2024 by Communique 2024/33 ⁵⁴. In their investigation the Ministry of Trade analysed the effect of Russian imports on the steel industry in Türkiye and stated that these imports put pressure on the prices of the domestic production sector at a rate between 15 % and 20 %. Hot rolled flat steel is one of the main factors of production for the product under investigation.

• (147) Regarding coal, Russia holds the second largest coal reserves in the world and has been expanding its production in the last decade because of growing exports ⁵⁵. Combined with the sanctions, this circumstance has lowered the price of Russian exports and Turkish imports of Russian coal have increased significantly in the recent years ⁵⁶.

• (148) Therefore, the Commission concluded that the prices of the main FOP were distorted in Türkiye and could not be considered as a suitable representative country.

• (149) The First Note also stated that Argentina did not have imports of cold-rolled steel, which is a vital input to produce tinplated products for non-integrated producers. As a result, the Second Note concluded that Argentina could not be considered as a suitable representative country.

• (150) The same analysis showed that Malaysia could be used as an appropriate representative country as their imports of the main factors of production, apart from steam coal, were not materially affected by imports from China, or any of the countries listed in Annex I to Regulation (EU) 2015/755 of the European Parliament and of the Council ⁵⁷.

• (151) Even though Türkiye and Argentina could not be considered appropriate representative countries due to the issues set out in recitals (144) and (149) above, in the Second Note the Commission updated the information available for the tinplated products producers in those countries, together with Malaysia and Thailand, and found that the producers in Argentina, Malaysia and Türkiye were profitable in 2023. The producer in Thailand was in essence breaking even, with a profit of less than 0,5 % of turnover, and this was not considered a reasonable profit.

• (152) Consequently, the Second Note stated that the Commission intended to use Malaysia as an appropriate representative country and Perusahaan Sadur Timah Malaysia (PERSTIMA) Berhad (‘Perstima’) in accordance with Article 2(6a)(a), first ident of the basic Regulation in order to source undistorted prices or benchmarks for the calculation of normal value.

• (153) Interested parties were invited to comment on the appropriateness of these choices.

• (154) No interested party provided a different proposal for representative country or another company for the source of SG&A costs and profit. However, specific comments were received regarding some factors of production and the calculation of SG&A costs and profit, which are addressed in detail below.

Level of social and environmental protection

• (155) Having established that Malaysia was the only available appropriate representative country, based on all the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation, since that provision requires the presence of more than one appropriate country.

3.2.5.   Conclusion

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

3.2.6.   Sources used to establish undistorted costs

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