Commission Implementing Regulation (EU) 2025/393 of 26 February 2025 imposing a provisional anti-dumping duty on imports of epoxy resins originating in the People’s Republic of China, Taiwan, and Thailand

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	2025/393	27.2.2025

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 (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1.   Initiation

• (1) On 1 July 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of epoxy resins (‘epoxy resins’) originating in the People’s Republic of China, the Republic of Korea, Taiwan and Thailand (the People’s Republic of China, Taiwan and Thailand are further considered as ‘the countries concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ² (‘the Notice of Initiation’).

• (2) The Commission initiated the investigation following a complaint lodged on 6 June 2024 (’the Complaint’) by the Ad Hoc Coalition of Epoxy Resin producers (‘the complainant’). The Complaint was made on behalf of the Union industry of epoxy resins 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 the product concerned subject to registration by Commission Implementing Regulation (EU) 2024/2714 ³ (‘the registration Regulation’).

1.3.   Interested parties

• (4) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the Korean, Chinese, Taiwanese and Thai authorities, known importers, 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) The Committee of epoxy resin and applications of China petroleum and chemical industry federation (‘ERC’), acting on behalf of the Chinese epoxy producers ⁴ submitted that the Union industry failed to meet the sufficient evidence standard for initiating the present proceeding and the Commission failed to duly verify the content of the Complaint. According to the ERC, information on all the factors listed in Article 3(3) and (5) of the basic Regulation should have been included in the Complaint.

• (7) First, the legal standard of evidence required for a complaint under Article 5 of the basic Regulation (‘sufficient to justify the initiation of an investigation’) makes it clear that the quantity and quality of information in the complaint is not the same as the one on which the Commission bases its findings at the end of an investigation. In fact, the complaint needs to include sufficient evidence of dumping, injury and a causal link which is reasonably available to the complainant. Further to that, Article 5 of the basic Regulation does not require that all injury factors mentioned in Article 3(5) are analysed or show deterioration to establish sufficient evidence of material injury. Indeed, the wording of Article 5(2) of the Basic Regulation states that the complaint must contain information on changes in the volume of the allegedly dumped imports, the effect of those imports on prices of the like product on the Union market and the consequent impact of the imports on the Union industry, as demonstrated by relevant (but not necessarily all) factors and indices having a bearing on the state of the Union industry, such as those listed in Articles 3(3) and 3(5). In the present case, the Commission’s analysis of the evidence provided by the complainants, in accordance with Article 2 of the Basic Regulation, has yielded the result that the Complaint contained sufficient evidence of dumping, injury and causality. Therefore, ERC’s claim is dismissed.

• (8) The ERC claimed that the non-confidential version of the Complaint and its exhibits did not permit a reasonable understanding of the substance of the redacted information and highly complicated the ability of other interested parties to provide meaningful comments. More specifically, the ERC contended that all injury indicators at Union-wide level as well as data for the complaining producers were presented in the form of ranges without substantiation, that numerous sources of information were withheld and that certain exhibits containing dumping margin calculations entirely restricted all substantive data that would allow the ERC to address the dumping allegations raised.

• (9) The Thai exporting producer Aditya Birla Chemicals (Thailand) Limited (‘Aditya Birla’) equally contended the excessive confidentiality granted by the Commission to the complainants, which they argued was contrary to Article 19 of the basic Regulation. The claim related to redacted information in the Complaint regarding various market reports (ECH Market Report, 2022 CEH Epoxy Resins, Tecnon Orbichem), letters of support, supporting evidence for the dumping and undercutting/underselling calculations (including missing undercutting and underselling analysis for Thailand), and the analysis of impact of COVID-19 on the Union industry.

• (10) First, the Commission found that the information provided in the Complaint, including the information redacted for confidentiality reasons, permitted a reasonable understanding of the substance of the information submitted in line with Article 19(2) of the basic Regulation. Due to the structure of the Union industry, the Commission accepted ranges for the micro-economic and macro-economic indicators. The ranges given for the injury indicators did provide sufficient detail to permit a reasonable understanding of the substance of the information submitted and assess the trends of all the injury indicators, especially since an index was given for each indicator.

• (11) Besides, specifically for the confidentiality restrictions on injury indicators and information sources disputed by the ERC, the said data was placed on the open file by the complainant after initiation in its reply to the macro questionnaire in unrestricted, unindexed form along with a specification of sources used.

• (12) Regarding the dumping allegations, the Commission found that the information set out in the body of the Complaint did allow the ERC to make meaningful comments on the subject-matter. The dumping calculations in the open version of the Complaint provided a detailed explanation of all different elements used to arrive at the dumping calculation, including all sources used for these calculations. The normal value was based upon the cost structure of the Union industry and therefore the Commission found it reasonable that a narrow range of the normal value for each of the countries concerned was given in the open version of the Complaint. Aditya Birla did not provide any reasoning why the information submitted in the open version the Complaint regarding the calculation of the dumping margin was insufficiently detailed to permit a reasonable understanding.

• (13) Regarding Aditya Birla’s claims, ranges or indications of trend evolution from market reports or in relation to injury and dumping calculations were provided in non-confidential summaries to a sufficient level of detail. Contrary to the claim of Aditya Birla, the price undercutting/underselling analysis for Thailand is part of the body of the Complaint, while the same information is mirrored in Exhibit 5.4. Moreover, certain information (such as quotes from telephone call reports) is confidential by nature and not susceptible to a non-confidential summary. In addition, the various reports referred to in the Complaint were subject to copyright but readily available to other interested parties. Finally, regarding the other claims from the party, for example on trade analysis, letters of support and the impact of COVID-19, no substantiation was given why the open version did not permit a reasonable understanding and could therefore not be duly assessed by the Commission.

• (14) In conclusion, as set out above, the non-confidential version of the Complaint and its exhibits permitted reasonable understanding of the substance included therein and hence the procedural rights of the parties have been respected.

• (15) The ERC also submitted that the PRODCOM data on industrial production provided by Eurostat for the relevant product group would show a different state of the Union industry from that presented in the Complaint.

• (16) The data provided in the Complaint covers 70-80 % of the Union production and originates from the complainant itself. On the other hand, PRODCOM data is gathered through a voluntary survey of Union producers, and its accuracy cannot be independently verified. For the reasons above, the complainant did not err in disregarding PRODCOM database in preparing the complaint. Therefore, ERC’s argument was rejected.

• (17) Aditya Birla maintained that the data provided in the Complaint pertains to an investigation period from October 2022 to September 2023, whereas the Notice of Initiation refers to a different investigation period. According to Aditya Birla, the comments on import data, injury, and dumping can only be based on the period covered in the Complaint or otherwise such approach would amount to a breach of rights of defence. Aditya Birla further claimed that, for the purposes of establishing standing, the Complaint did not allow the exporting producer to assess the relevant information on the Union producers and production.

• (18) First, the Commission is not bound by the investigation period set out in the Complaint in conducting its investigation and in fact should in principle set the investigation period closer to the date of initiation of the proceedings. Second, the results of the standing exercise in which 4 companies came forward representing around 80 % of the Union production, have been placed on the open file and are hence available to all interested parties for inspection. Therefore, Aditya Birla’s allegations are dismissed as unsubstantiated.

• (19) According to Aditya Birla, the imports from Thailand were much lower in comparison to the imports from other two countries concerned and, thus, Thailand should have been excluded from the investigation.

• (20) Imports from Thailand represented a market share above 1 %, which is the threshold below which an investigation cannot be initiated as established by Article 5(7) for initiation. Therefore, Aditya Birla’s claim cannot be accepted.

1.5.   Sampling

• (21) 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

• (22) 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 the largest representative production and sales volume in the Union during the investigation period. This sample consisted of two Union producers (Westlake and Blue Cube/Olin). The sampled Union producers accounted for around 60 % of the total Union production. The Commission invited interested parties to comment on the provisional sample. No comments were received, and the sample was considered representative of the Union industry.

Sampling of importers

• (23) 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.

• (24) Two unrelated importers (Cortex and Comexim) 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 in Thailand

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

• (26) There was only one exporting producer in Thailand known to the Commission at the initiation of the investigation. No further exporting producers came forward. Therefore, the Commission deemed it was not necessary to select a sample and proposed this exporting producer to be investigated. In accordance with Article 17(2) of the basic Regulation, the known exporting producer concerned, and the authorities of the country concerned, were consulted on this decision. No comments were received.

Sampling of exporting producers in the Republic of Korea

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

• (28) Four exporting producers in Korea provided the requested information and agreed to be included in the sample. The Commission has sampled the two Korean exporting producers with the largest quantity of exports to the Union. They represented over 90 % of the total export volume from Korea to the Union during the investigation period.

Sampling of exporting producers in Taiwan

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

• (30) There were only two exporting producers in Taiwan known to the Commission at the initiation of the investigation. No further exporting producers came forward. Therefore, the Commission deemed it was not necessary to select a sample and proposed those two exporting producers to be investigated. In accordance with Article 17(2) of the basic Regulation, the known exporting producers concerned, and the authorities of the country concerned, were consulted on this decision. No comments were received.

Sampling of exporting producers in the People’s Republic of China

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

• (32) Ten exporting producers or groups of 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 two groups representing around 80 % of Chinese imports during the investigation period, on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the countries concerned (as well as of Korea) were consulted on the selection of the sample.

• (33) The exporting producers Chang Chun Chemical (Panjin) Co., Ltd. (CCPJ) and Chang Chun Chemical (Jiangsu) Co., Ltd. (CCJS) (together ‘Chang Chun Group’) argued that their aggregate export volume represents 20 % of the Union imports of epoxy resins during the investigation period, which is higher than the other sampled group. Moreover, since the Chang Chun Group was also sampled in Taiwan, the group argued that the Commission could capture the majority of the group’s exports to the Union if it would also sample the Chang Chun Group in China. Finally, the Chang Chun Group argued that their accounting system is different than those of the sampled companies in China, since they are a Taiwan owned group.

• (34) The Commission confirmed that, contrary to the claim, the export volume of the Chang Chun to the Union was below the volume declared by the two sampled groups. Moreover, the Commission selected a sample which could reasonably be investigated within the time available and therefore could not account for other factors such as accounting methods or the overall export volume of Chang Chun Group from China and Taiwan to the Union. Therefore, the claim was rejected.

1.6.   Questionnaire replies and verification visits

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

• (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 with regard to China. For this reason, the Commission sent additional questionnaire in this regard to the GOC.

• (37) The questionnaires to the sampled companies in China, Korea, Taiwan, and Thailand were made available online ⁵ on the day of initiation.

• (38) The Commission sought and verified all information 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

• — Westlake Epoxy BV (‘Westlake’), Pernis, The Netherlands

• — Blue Cube Germany Assets Management GmbH (‘Olin’), Stade, Germany

Unrelated importers in the Union

• — Comexim Europe SARL (‘Comexim’), Sannois, France

• — Cortex Chemicals Sp. z o.o. (‘Cortex’), Tarnow, Poland

Exporting producers in the People’s Republic of China

• — Sinochem group

• — Jiangsu Ruiheng New Material Technology Co., Ltd., Lianyungang, Jiangsu, China

• — Nantong Xingchen Synthetic Material Co., Ltd., Nantong, Jiangsu, China

• — Jiangsu Kumho Yangnong Chemical Co., Ltd., Yizheng, Jiangsu, Chin

• — Sanmu Group

• — Jiangsu Sanmu Group Co., Ltd., Yixing, Jiangsu, China

• — Jiangsu Sanmu Chemichal Co., Ltd, Yixing, Jiangsu, China

Exporting producers in the Republic of Korea

• — Kukdo Chemical Co., Ltd., Seoul, Republic of Korea

• — Kumho P&B Chemicals, Inc., Seoul, Republic of Korea

Related companies in the Republic of Korea

• — Kumho Trading Co. Inc., Seoul, Republic of Korea

• — Kukdo Finechem Co., Ltd., Seoul, Republic of Korea

Related company in the Union

• — Kukdo Europe GmbH, Eschborn, Germany

Exporting producers in Taiwan

• — Chang Chun Plastics Co., Ltd, Taipei City, Taiwan

• — Nan Ya Plastics Corporation, Taipei City, Taiwan

Related importer in the Union

• — CCD (Germany) GmbH, Dusseldorf, Germany

Exporting producer in Thailand

• — Aditya Birla Chemicals (Thailand) Limited, Rayong, Thailand

Related importer in the Union

• — CTP Advance Materials GmbH, Ruelsselsheim, Germany

1.7.   Investigation period and period considered

• (39) The investigation of dumping and injury covered the period from 1 April 2023 to 31 March 2024 (‘the investigation period’ or ‘the IP’). 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’).

• (40) ERC claimed that the investigation period (the ‘IP’) set by the Commission at initiation is missing an entire quarter between the end of the IP and the initiation date. Furthermore, according to the ERC, selecting 2020 as a benchmark for assessing the import volumes and prices portrays a distorted image since that year has been driven by non-market forces causing a low point in terms of imports volumes due to logistics problems and extremely volatile prices. ERC suggested that Commission adopts a period considered starting on 1 January 2019 to reflect the normal business conditions prior to the COVID-19 pandemic and geopolitical turbulence that followed.

• (41) One of the unrelated importers, Cortex, also called for an extension of the period considered by including year 2019, which, in the importer’s view, was a year in which normal conditions existed in the market.

• (42) In accordance with Article 6(1) of the basic Regulation, an investigation period must, normally, cover a period of no less than six months immediately prior to the initiation of proceedings. The Commission has a wide discretion in selecting the investigation period, as far as such selection allows for a representative finding, with the use of information that is as recent as possible. In this case, the Commission selected the investigation period ending three months before the initiation of the investigation, which is in line with Article 6(1) as well as the established practice, while also allowing for collection of the data from the Union, exporting producers and other statistical sources.

• (43) With respect to the period considered and its extension to year 2019, it is recalled that the Commission has equally a wide discretion regarding the selection of such period. The period considered should be long enough to enable the Commission to duly evaluate all relevant economic factors and indices having a bearing on the state of the Union industry. In the present case, the Commission, in accordance with its standard practice selected a period of three full years as well as the investigation period for examination of the macro- and microeconomic trends and indicators. It is further noted that the Commission injury assessment involves a dynamic assessment of the economic factors over the period considered and not merely the conditions at the start and the end of the period considered. In this context, regardless of the first year of the period considered, the Commission analysis clearly showed material injury to the Union industry during the investigation period. Therefore, a change of the period consider would not invalidate or otherwise alter the injury findings set out in this Regulation. The claims of ERC and Cortex were therefore rejected.

2. PRODUCT UNDER INVESTIGATION, PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

• (44) The product subject to this investigation is products containing more than 35 % by weight of epoxy resins, also known as epoxide resins or polyepoxides, which are polymers or prepolymers containing reactive epoxy groups, based on epichlorohydrin (‘ECH’) and an aliphatic or aromatic alcoholic component (such as BPA), in solid, semi-solid or liquid forms, having all types of grade, purity, molecule weight or molecular structure, whether or not containing modifiers, curing agents, or additives, so long as the curing agents have not chemically reacted so as to cure the epoxy resin or convert it into a different product no longer containing epoxy groups (‘the product under investigation’).

The following products are excluded:

• (1) certain paint and coating products, which are blends, mixtures, or other formulations of epoxy resin, curing agent, and pigment, in any form, packaged in one or more containers, wherein (1) the pigment represents a minimum of 10 percent of the total weight of the product, (2) the epoxy resin represents a maximum of 80 percent of the total weight of the product, and (3) the curing agent represents 5 to 40 percent of the total weight of the product;

• (2) pre-impregnated fabrics or fibres, often referred to as ‘pre-pregs’, which are composite materials consisting of fabrics or fibres (typically carbon or glass) impregnated with epoxy resin;

• (3) blends of epoxy resins with other materials, currently classified under CN codes other than 2910 90 00 , 3824 99 92 , 3824 99 93 , and 3907 30 00 .

• (45) Epoxy resins have a variety of different chemical compositions. The most common epoxy resin is bisphenol A diglycidyl ether, also known as BADGE or DGEBA which is formed by reacting ECH with bisphenol A (‘BPA’). Epoxy resins can also be produced by reacting ECH with other raw materials such as aliphatic glycols, and phenol- or cresol-novolacs. Even when producing epoxy resin using other raw materials to replace BPA in the reaction with ECH, the production process is similar.

• (46) Epoxy resins are thermosetting resins, meaning that they do not develop useful properties until they are cured, that is, they have reacted with curing agents. In their cured form, epoxy resins possess the following properties: great adhesion, excellent resistance to corrosion and chemicals, high mechanical strength, and excellent properties for insulation applications.

• (47) Epoxy resins are used in a wide range of applications such as, coatings (including wind energy blades), paints, adhesives, composite materials, insulating materials, and electronics.

2.2.   Product concerned

• (48) The product concerned is product under investigation originating in the People’s Republic of China, the Republic of Korea, Taiwan and Thailand, currently falling under CN codes ex 2910 90 00 , ex 3824 99 92 , ex 3824 99 93 , and ex 3907 30 00 (TARIC codes 2910 90 00 05, 3824 99 92 96, 3824 99 93 10, 3907 30 00 05, 3907 30 00 20, and 3907 30 00 80).

2.3.   Like product

• (49) 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 the People’s Republic of China, the Republic of Korea, Taiwan and Thailand, and

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

• (50) 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

• (51) The Valspar Corporation SAS (hereinafter ‘Sherwin Williams’) claimed that tetramethyl bisphenol F-based diglycidyl ether (‘TMBPF-DGE’), which falls under the definition of the product concerned, should be excluded from the product scope of the investigation. More specifically, Sherwin Williams argued that TMBPF-DGE is approved for use in food contact coating applications and is an important alternative to BPA-based coatings. Moreover, according to Sherwin Williams, the company holds proprietary patent rights for production of TMBPF-DGE in the Union and in China, TMBPF-DGE is not imported into the Union and there is no evidence of injury to the Union production of TMBPF-DGE caused by increased imports of epoxy resin into the Union from the countries concerned.

• (52) First, Sherwin Williams itself states that TMBPF-DGE is used in coatings industry as an alternative to BPA-based products. Hence the said epoxy type has the same basic use and similar essential characteristics as other, competing epoxy types and is interchangeable with the other epoxy products under investigation. In addition, the existence of a proprietary right regarding the manufacturing of a certain epoxy type cannot be considered a reason for exclusion from the product scope of the investigation. Sherwin Williams has not demonstrated that all versions of TMBPF-DGE would be covered by patent. Moreover, intellectual property rights have no bearing on characteristics or uses of a product relevant in the context of trade defence investigations. Furthermore, the fact that TMBPF-DGE is not imported into the Union is not indicative of future behaviour by exporting producers in the countries concerned, irrespective of any patent rights which may extend beyond the Union, or which may even be inapplicable in territories outside the Union. Sherwin Williams has equally not demonstrated that TMBPF-DGE could not be produced in any of the countries concerned.

• (53) Furthermore, Allnex Resins (China) Ltd. (‘Allnex China’) submitted a request that Allnex specialty resins, specifically BECKOPOX EP 2387w/53WA, be excluded from the scope of the investigation. Allnex China claimed that the said specialty resin contains less hazardous organic solvents and offers very low environmental impact and that the company utilizes proprietary techniques to manufacture the resin.

• (54) First, Allnex China itself acknowledges that BECKOPOX EP 2387w/53WA meets the definition of the product under investigation. Second, the fact that the resin concerned contains less hazardous substances and is more environmentally friendly is not a qualifying criterion for defining the product under investigation in this case. Lastly, as set out in recital (51), use of proprietary techniques cannot serve as a reason for product exclusion and does not imply that other producers cannot make epoxy resins achieving similar properties and performance characteristics, causing injury to the Union industry.

• (55) In view of the above considerations, the Commission provisionally rejected the request for exclusion of TMBPF-DGE and BECKOPOX EP 2387w/53WA from the product scope of the product under investigation.

3. DUMPING

3.1.   People’s Republic of China

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

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

• (57) 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 epoxy resins. Three groups of exporting producers submitted the relevant information.

• (58) To obtain information deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. 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. No comments were received from interested parties on the eventual application of Article 2(6a) of the basic Regulation on China.

• (59) 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.

• (60) On 17 September 2024, the Commission informed by a note (‘the First Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of the product concerned. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified a possible representative country, namely Thailand. The Commission received comments from one sampled Chinese exporting producer Jiangsu Sanmu Group Co. Ltd and from the complainant. These comments were addressed in the Second Note.

• (61) On 15 November 2024, after having analysed the comments received, the Commission issued a second note on the sources for the determination of the normal value (‘the Second Note’). In that note the Commission established a provisional list of factors of production and informed interested parties of its intention to use Thailand as the representative country under Article 2(6a)(a), first indent of the basic Regulation. It also informed interested parties that it would establish selling, general and administrative (‘SG&A’) costs and profit based on readily available financial data sourced from the company Aditya Birla Chemicals (Thailand), a producer in the representative country. The Commission invited interested parties to comment. Comments were received from the sampled exporting producer Jiangsu Sanmu Group Co. Ltd and from the complainant.

• (62) After having analysed the comments and information received on the Second Note, the Commission concluded that Thailand was an appropriate choice as representative country from which undistorted prices and costs would be sourced for the determination of the normal value. The underlying reasons for that choice are further described in detail in recitals (104) and following. Comments received are addressed in Section 3.1.2.4.4.

3.1.2.   Normal value

• (63) 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’.

• (64) 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 refereed hereinafter as ‘SG&A’).

• (65) 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.

3.1.2.1.   Existence of significant distortions

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

• (67) 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. In particular, the Commission concluded that in the chemical sector 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. 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. Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in China ¹². In the same vein, the Commission found distortions of wage costs in the chemical 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.

• (68) Like in previous investigations concerning the chemical sector in China, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the Complaint, and 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 (‘Report’), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the Chinese economy in general, but also the specific market situation in the relevant sector including the product under investigation. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in China as also found by its previous investigations in this respect.

• (69) The Complaint alleged that significant distortions exist in the Chinese epoxy resin sector. It referred to the Report and in particular to the Chinee economic system being a ‘socialist market economy’ and the active role of the Chinese Communist Party (‘CCP’) in both the public and private sectors in China.

• (70) More specifically, the Complaint pointed out that:

• — State-owned enterprises (‘SOEs’) interfere with the epoxy resin costs in China and many Chinese epoxy resin producers are heavily linked with the GOC. For example, Sinochem Holdings Corporation Ltd., part of Sinochem Group, owns epoxy resin producers such as Jiangsu Ruiheng New Material Technology Co., Ltd. and Zhejiang Haobang Chemical Co., Ltd. Sinochem made significant investments in its subsidiary Jiangsu Ruiheng New Material Technology Co. Sinochem Group also owns China National BlueStar (Group) Co., a large-scale enterprise with important market shares in the production of epoxy resin. Furthermore, Sinopec Baling Petrochemical Company, the largest Chinese manufacturer of epoxy resin, is an SOE and is known to promote official Chinese policy ¹⁶.

• — Measures taken by the GOC impact the costs and prices of epoxy resin in China. The Complaint refers to CCP pressure on and presence in both public and private companies in China. By way of example, several Party members hold executive positions in epoxy resin producers such as Jiangsu Yangnong Kumho Chemical Co., Ltd and Jiangsu Sanmu Group. This constitutes prima facie evidence that the epoxy resin sector in China is subject to State presence, allowing the GOC to interfere with prices or costs ¹⁷.

• — There are public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces. Specifically, the petrochemical and chemical products industry is regarded as a strategic industry by the GOC, as explained in the 14^th Five-Year Plan (‘FYP’). As such, the recent developments of the chemical sector in China had a strong regulatory drive to pursue several policy objectives, including industry upgrading in technical capabilities, moving towards more specialty products and tightening of environmental requirements. These objectives are supported by various policy measures, such as relocating chemical production sites or making available financing for chemical products. The Complaint also specifically referred to the Report which mentioned the implementation of the 14^th FYP in Jiangsu, where several Chinese epoxy resin producers are located ¹⁸.

• — The lack of, the discriminatory application, or the inadequate enforcement of bankruptcy, corporate, or property laws impact the epoxy resin costs in China. SOEs can benefit from de facto governmental guarantees and due to the absence of normal market mechanisms, the Chinese financial system remains highly distorted ¹⁹.

• — The market of epichlorohydrin (‘ECH’), one of the major inputs for epoxy resins, is also distorted. On the one hand, the GOC created a substantial overcapacity of ECH on the Chinese market due to significant government distortions and support. On the other hand, distortions and incentives provided in the upstream biodiesel and glycerine markets also affect the epoxy resins and ECH markets.

• (71) In conclusion, the Complaint took the position that prices or costs, 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. On that basis, according to the Complaint, it is not appropriate to use domestic prices and costs to establish normal value in this case.

• (72) The Commission examined 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. 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 concerned.

• (73) As regards Article 2(6a)(b), first indent of the basic Regulation, the sector of the product concerned is served by both private companies, such as Hongchang Electronics (also called Grace Epoxy) ²⁰ or Huibo New Materials (also called Wells Advanced Materials) ²¹and by SOEs, such as Fujian Sanmu Group ²², Sinochem Group ²³ and Sinopec Group ²⁴. The exact ratio of private versus state-owned producers in the epoxy resin market could not be determined. However, the Commission found that several producers are directly controlled by the State. Examples include the largest Chinese producer ²⁵ of epoxy resin, Fujian Sanmu Group, which is controlled by the Fuzhou Development Zone State-owned Assets Operation Co., Ltd. ²⁶, and Sinochem Group and Sinopec Group, both central enterprises controlled by the State Council’s State Asset Supervision and Administration Commission (‘SASAC’) ²⁷.

• (74) Moreover, CCP interventions into operational decision making have become the norm not only in SOEs but also in private companies ²⁸, with the CCP claiming leadership over virtually every aspect of the country’s economy. Indeed, the state’s influence by means of CCP structures within companies effectively results in economic operators being under the government’s control and policy supervision, given how far the state and Party structures have grown together in China.

• (75) The investigation found that the industry national association representing the producers of epoxy resin, the China Petroleum and Chemical Industry Federation (‘CPCIF’), stablished an Epoxy Resin and Application Special Commission ²⁹. The CPCIF adheres to the overall leadership of the CCP, carries out Party activities, and provides necessary conditions for the activities of party organizations ³⁰. Moreover, the ‘registration and management authority of the Association is the Ministry of Civil Affairs’ ³¹ and the conditions to be eligible as a representative of the CPCIF include to ‘adhere to the leadership of the CCP, support socialism with Chinese characteristics, resolutely implement the Party’s line, principles, and policies, and possess good political qualities’ ³².

• (76) Both public and privately owned enterprises in the chemical sector are subject to policy supervision and guidance. The latest Chinese policy documents concerning the chemical and petrochemical sector confirm the continued importance which the GOC attributes to the sector, including the intention to intervene in the sector in order to shape it in line with the government policies. This is exemplified by the 14th FYP on Economic and Social Development and 2035 Perspectives, according to which the GOC intends to ‘[t]ransform and upgrade traditional industries, promote the optimization of the layout and structural adjustment of raw material industries such as petrochemicals’.

• (77) Additionally, the Guiding Opinion on Promoting the High-Quality Development of the Petrochemical and Chemical Industries during the 14th FYP (‘the Guiding Opinion’) also stipulates that the GOC will ‘[p]romote industrial structure adjustment: strengthen specific measures and scientifically regulate the scale of the industry’ and ‘(…) [e]nhance the supply capacity of high-end polymers, special chemicals and other products’.

• (78) Similar examples of the intention of the Chinese authorities to supervise and guide the developments of the epoxy resins sector can be found at the provincial level, such as in the Jiangxi 14th FYP on the High-Quality Development of New Materials Industry, indicating that ‘aiming at emerging fields such as energy conservation and environmental protection, electronic information, new energy vehicles, 5G, and biomedicine, we will develop high-performance resins’.

• (79) Moreover, the Zhejiang 14th FYP on Developing the New Materials Industry, which covers the high-performance resin sector, plans to ‘[f]ocus on the development of high-performance resins and elastomers such as polyethylene, polypropylene, polyester, epoxy resin’ and lists epoxy resin among the key new materials to be developed.

• (80) 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, the Commission found that Article 12 of Huibo New Materials’ Articles of Association stipulates that: ‘The company shall establish a Communist Party organization and carry out Party activities in accordance with the provisions of the Constitution of the Communist Party of China. The company shall provide the necessary conditions for the activities of the Party organization’ ³³.

• (81) Moreover, the chairman as well as several members of the board of directors of Fujian Sanmu Group are also members of the CCP ³⁴.

• (82) Sinochem Group’s chairman of the board of directors serves as the secretary of the Party committee and several members of the board of directors serve as deputy secretaries of the Party committee ³⁵. Also, Sinochem Group presents itself as a company that ‘adheres to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, effectively strengthens the Party’s overall leadership over the enterprise, deepens Party building, [and] gives full play to the role of Party organizations at all levels’ ³⁶.

• (83) Similarly, Sinopec Group’s chairman of the board of directors is the secretary of the Party committee and several members of the board serve as deputy secretaries of the Party committee ³⁷. Sinopec Group stated it intends to ‘focus on the company’s new mission and new tasks on the new journey, carry forward the party’s self-revolutionary spirit, strengthen the party’s leadership and party building in an all-round and integrated manner, and systematically promote comprehensive and strict party governance, so as to provide a strong guarantee for writing a new chapter of China's modern petrochemical industry’ ³⁸.

• (84) It was impossible to systematically establish the existence of personal connections between all of the producers of the product under investigation and the CCP. However, given that the product under investigation represents a subsector of the chemical sector, the Commission considered that the information established in the recent investigations concerning the chemical sector, as indicated in recital (67), is relevant also to the product under investigation.

• (85) Further, 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 epoxy resins sector. The Commission identified several documents demonstrating that the epoxy resins industry benefits from governmental guidance and intervention into the chemical sector, given that epoxy resin represents a subsector of the chemical sector.

• (86) The chemical industry is consistently regarded as a key industry by the GOC ³⁹. This is confirmed in the numerous plans, directives and other documents focused on chemicals, which are issued at national, regional, and municipal level. Under the 14^th FYP, the GOC earmarked the chemical industry for optimization and upgrade ⁴⁰. Similarly, the 14^th FYP on Developing the Raw Materials Industry stipulates that the GOC will ‘Optimize the organizational structure: Make leading enterprises bigger and stronger. (…) [S]upport enterprises to accelerate cross-regional and cross-ownership mergers and reorganizations, increase industrial concentration, and conduct international operations. In the petrochemical, chemical, steel, non-ferrous metals, building materials and other industries, cultivate a group of leading enterprises in the industrial chain with ecological dominance and core competitiveness’ ⁴¹.

• (87) Moreover, Sinopec Group’s Hunan subsidiary’s project called ‘Key technology for high-performance special epoxy resin’ was selected by the Hunan government among the top 10 technological research projects to be supported. ⁴²

• (88) Additionally, in 2024, Hongchang Electronics received special governmental subsidies of CNY 21 million benefitting its wholly owned subsidiary Zhuhai Hongchang Electronics Materials Co., Ltd for an epoxy resin production project ⁴³. In their 2023 Annual Report, Hongchang Electronics Materials Co., Ltd declared having received CNY 9,2 million governmental subsidies in 2022 and CNY 11,5 million in 2023 ⁴⁴.

• (89) Similarly, Huibo New Materials received CNY 1,4 million governmental subsidies in 2022 and CNY 2,8 million in 2023 ⁴⁵.

• (90) Fujian Sanmu Group also benefitted from governmental subsidies amounting to CNY 10,8 million in 2021, to CNY 13,9 million in 2022 and to CNY 3,2 million in 2023 ⁴⁶.

• (91) 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 product under investigation. Such measures impede market forces from operating freely.

• (92) The present investigation has not revealed any evidence that the discriminatory application or inadequate enforcement of bankruptcy and property laws in the chemical sector, according to Article 2(6a)(b), fourth indent of the basic Regulation would not affect the manufacturers of the product under investigation ⁴⁷.

• (93) Further, 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, as referred to above in recital (67). 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.

• (94) Moreover, no evidence was submitted in the present investigation demonstrating that the epoxy resin sector 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 ⁴⁹. The abovementioned Guiding Opinion requiring to ‘improve supporting policies, strengthen the coordination between fiscal, financial, regional, investment, import and export (…) policies with the industry policies [to] give full play to the national cooperation platform between industry and finance and [to] foster the connection between enterprises and banks’ ⁵⁰ also exemplifies this type of government intervention very well. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.

• (95) Finally, the Commission recalls that in order 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.

• (96) 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, raw materials and energy are present throughout China. This means, for instance, that an input that in itself 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.

• (97) In sum, the evidence available showed that prices or costs of the product under investigation, including the costs of raw materials, land, 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.

3.1.2.2.   Arguments raised by interested parties

• (98) 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.

• (99) Jiangsu Sanmu Group submitted that Article 2(6a) of the basic Regulation is not applicable in the present case as there is insufficient evidence of significant distortions in the Chinese epoxy resin industry. It argued that Jiangsu Sanmu Group is a privately owned company and that its business activities are driven by market forces without any undue interference by the government. It therefore asked the Commission to accept its domestic prices and costs as reported by the company.

• (100) First, the Commission disagreed that there is insufficient evidence of the Chinese epoxy resin industry being affected by significant distortions. While the Report does not include a specific chapter on epoxy resin, the existence of significant distortions giving rise to the application of Article 2(6a) of the basic Regulation is not linked to the existence of a specific sectoral chapter covering the product under investigation. The Report describes different types of distortions present in China which are cross-cutting and applicable throughout the Chinese economy ⁵¹ and affect the prices and the costs of production of the product under investigation, including raw materials, energy, land, capital and labour ⁵². Additionally, the Report includes a chapter on the chemical industry sector, which is relevant for the Commission’s assessment on the epoxy resin sector, which is a subsector of the chemical industry sector.

• (101) Furthermore, the Report is not the only source of evidence used by the Commission for its determination, as there are additional probationary elements used for this purpose (including the Complaint ⁵³). As explained in section 3.1.2.1 above, the epoxy resin industry is subject to a number of governmental interventions (such as State presence and supervision in key industry actors ⁵⁴, coverage by the FYPs and other documents ⁵⁵, and interventions in the financial sector ⁵⁶), which also affect the costs of production of epoxy resin, including raw materials, energy, land, capital and labour ⁵⁷. Therefore, this argument was dismissed.

• (102) Second, with regard to Jiangsu Sanmu Group’s request that the Commission uses the company’s reported domestic prices and costs, the Commission recalls that once it is determined that, due to the existence of significant distortions for the exporting country in accordance with Article 2(6a)(b) of the basic Regulation, it is not appropriate to use domestic prices and costs in the exporting country, the Commission may construct normal using undistorted prices or benchmarks in an appropriate representative country for each exporting producer according to Article 2(6a)(a). Article 2(6a)(a) allows the use of domestic costs only if they are positively established not to be distorted. However, no costs of production and sale of the product under investigation could be established as undistorted in light of the evidence available on the factors of production of individual exporting producers. The Commission also notes that Jiangsu Sanmu Group did not further substantiate its claim. The argument was therefore rejected.

3.1.2.3.   Conclusion

• (103) In view of the above, the Commission concluded that it was not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, 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.

3.1.2.4.   Representative country

3.1.2.4.1.   General remarks

• (104) 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 ⁵⁸.

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

• — Existence of relevant readily available 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.

• (105) As explained in recitals (60) and (61), the Commission issued two notes for the file on the sources for the determination of the normal value. These notes described the facts and evidence underlying the relevant criteria, and addressed the comments received by the parties on these elements and on the relevant sources. In the Second Note, the Commission informed interested parties of its intention to select Thailand as an appropriate representative country in the present case.

3.1.2.4.2.   A level of economic development similar to China

• (106) In the First Note, the Commission identified Brazil, Malaysia, 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.

3.1.2.4.3.   Existence of relevant readily available data in the representative country

• (107) In the First Note the Commission indicated that for the countries identified as countries where product under investigation is being produced, i.e. Brazil, Malaysia and Thailand, readily available financial data from producers of the product under investigation was only available for one producer of epoxy resins in Thailand, Aditya Birla Chemicals (Thailand) ⁵⁹.

• (108) The Commission could not find detailed financial information coinciding with the investigation period for the identified Thai producer Aditya Birla Chemicals (Thailand). However, in the course of the investigation the company provided its financial statements for the financial year ending 31 March 2024, which aligns with the investigation period, and agreed to be considered as a reference in the current investigation ⁶⁰ and for the relevant data to be placed on the file, accessible to the interested parties.

• (109) With regard to Malaysia, based on the information available to the Commission, there is only one producer manufacturing epoxy resins, DIC Corporation ⁶¹, part of a global Japanese group. No detailed financial information for this company was found to be readily available. No comments were received on this finding.

• (110) With regards to Brazil, based on the information available to the European Commission, there are three producers who manufacture epoxy resins, Dow ⁶², Hexion Quimica do Brazil LTDA ⁶³, and Olin ⁶⁴. However, no financial information regarding the product concerned was found to be available for these companies.

• (111) The complainant provided a sensitive version of the audited accounts of one of the known producers of epoxy resins in Brazil, Olin Brazil. However, this information was not accompanied by any non-confidential summary, nor by any company agreement to use this sensitive data as a reference in the current investigation. Therefore, the Commission was not in the position to consider this information as readily available data within the meaning of Article 2(6a) of the basic Regulation and therefore could not use it in the current investigation.

• (112) In their comments to the Second Note, the Chinese exporting producer Jiangsu Sanmu Group requested the Commission to disclose the full annual accounts of Aditya Birla Chemicals (Thailand) in order to assess the correctness of the calculation and methodology used for the construction of the profit and SG&A costs. In particular, Jiangsu Sanmu Group requested the disclosure of the details of the ‘selling expenses’, ‘administrative expenses’ and ‘finance costs’ items.

• (113) The Commission considered that the financial data provided by Aditya Birla Chemicals (Thailand) represented a comprehensive and up-to-date source of information for calculating SG&A costs and profit, which allowed interested parties sufficient data to assess the level of profit and SG&A. As explained in recitals (109) to (111) no alternative information was readily available, nor interested parties provided any usable alternative data. With regards to the elements included in the SG&A costs used in the calculation, that could be made readily available, the Commission will further enquire about this with Aditya Birla Chemicals (Thailand).

• (114) In the Second Note, the Commission noted that the import volumes from China into Thailand were significant for ECH (75 %) and caustic soda (62 %). Based on this, the Commission considered that the import value of ECH and caustic soda from Thailand was likely distorted. Indeed, further examination of prices of imports from China and other sources had shown that these prices were aligned, with the Chinese prices likely influencing prices from the rest of the world. As a consequence, the Commission decided to find alternative benchmarks for these two factors of production. No international benchmarks were available for either ECH or caustic soda. For this reason, the Commission considered imports of those factors into Malaysia or Brazil – the two countries with similar development and epoxy resin production as explained in recital (106). The share of Chinese imports of ECH of the total imports was 0 % for Malaysia and 27 % for Brazil, while the share of Chinese imports of caustic soda, which however represents a smaller share of the total costs of production, of the total imports during the investigation was 15 % for Malaysia and 4 % for Brazil. Due to the overall significance of ECH in the overall costs of production of epoxy resin, the Commission decided to use imports into Malaysia to establish the undistorted costs of the two factors of production.

• (115) In light of the above considerations, the Commission informed the interested parties with the Second Note that it intended to use Thailand as an appropriate representative country (except for imports of ECH and caustic soda where it would use imports into Malaysia) and to use the company Aditya Birla Chemicals (Thailand), 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.

• (116) Interested parties were invited to comment on the appropriateness of Thailand as a representative country and of Aditya Birla Chemicals (Thailand) as producers in the representative country.

3.1.2.4.4.   Comments of the interested parties

• (117) Jiangsu Sanmu Group opposed the assumptions adopted by the Commission that Thai ECH and caustic soda markets would be distorted solely on the basis of high imports from China and claimed that the Commission should use imports into Thailand to also establish the undistorted values for both caustic soda and ECH.

• (118) Moreover, Jiangsu Sanmu Group noted that the import quantity of ECH into Thailand from countries other than China are still higher than the total imports of ECH into Malaysia.

• (119) Finally, Jiangsu Sanmu Group claimed that Thailand should take precedence as source for undistorted benchmarks for the normal value, since it is one of the countries investigated.

• (120) The complainant opposed these claims when commenting on the First and Second Notes and stressed that a significant proportion of imports from China into one country would likely put pressure on prices of imports from other competing countries too. The complainant stressed that as the world’s largest ECH producer, China’s massive production and export flow exerts a profound influence on neighbouring markets. As a result, import prices into Thailand of ECH and caustic soda would indirectly reflect price distortions in China.