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

• (275) The price comparison was made on a type-by-type basis for transactions at the same level of trade. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period. It showed a weighted average undercutting margin between 25 % and 28 % for Chinese producers, a weighted average undercutting margin of 23 % for the Thai producer, a weighted average undercutting margin between 20 % and 25 % for the Taiwanese producers and a cumulative weighted average undercutting of 27 %, 23 % and 20 % for the sampled producers in China, Thailand, and Taiwan respectively.

• (276) In any event, regardless of the findings on undercutting, the Commission observed that the dumped imports also led to significant price depression (as reflected by the underselling margins) during the investigation period, when the Union industry sold epoxy resin below its cost of production.

4.4.   Economic situation of the Union industry

4.4.1.   General remarks

• (277) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (278) As mentioned in recital (22), sampling was used for the determination of possible injury suffered by the Union industry.

• (279) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators for the complainant on the basis of data contained in the macro questionnaire submitted by the complainant and information obtained during the verification visits. The data for the rest of the Union producers was estimated based on the S&P Global intelligence data used in combination with the data from the complainant. The Commission evaluated the microeconomic indicators based on the data contained in the questionnaire replies from the sampled Union producers. Both macro- and microeconomic datasets were found to be representative of the economic situation of the Union industry.

• (280) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.

• (281) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

4.4.2.   Macroeconomic indicators

4.4.2.1.   Production, production capacity and capacity utilisation

• (282) The total Union production, production capacity and capacity utilisation were established on the basis of the (i) verified macro data from the complainant for the Union producers represented by the complainant and (ii) estimates using the S&P Global intelligence data for the remaining Union producers.

• (283) The total Union production, production capacity and capacity utilisation ⁹⁰ developed over the period considered as follows:

Table 5

Production, production capacity and capacity utilisation

	2020	2021	2022	2023	Investigation period
Production volume (tonnes)	407 176	430 283	302 875	241 717	248 693
Index	100	106	74	59	61
Production capacity (tonnes)	748 398	742 270	745 991	707 282	708 202
Index	100	99	100	95	95
Capacity utilisation	68 %	72 %	50 %	44 %	45 %
Index	100	105	73	64	66
Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.

• (284) The production of the like product in the Union shows a clear downward trend starting from 2021 until the end of the investigation period, following a 6 % uptick in production between 2020 and 2021. While the pandemic lockdowns and stay-at-home economy in 2020 and 2021 led to an enormous growth in demand for paints and coatings (main epoxy resin application), the improvement in supply availability from Asia and resulting pressure of rising imports, together with destocking of inventories led to sharp decline in the Union production from 2022 onwards.

• (285) Production capacity remained relatively stable, except for a minor 5 % decrease in 2023 to the investigation period caused by a maintenance issue at one of the Union producers in 2023.

• (286) Capacity utilisation remained stable in 2020 and 2021 while it showed a significant fall from 2022 until the investigation period, when it dropped below 50 %. The capacity utilisation declined from 2022 onwards due to a sharp decrease in production (see recital (284) above).

4.4.2.2.   Sales volume and market share

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

Table 6

Sales volume and market share

	2020	2021	2022	2023	Investigation period
Total sales volume on the Union market (tonnes)	259 759	273 030	210 733	174 965	178 157
Index	100	105	81	67	69
Market share	68 %	64 %	58 %	52 %	52 %
Index	100	95	85	76	77
Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.

• (288) The sales volume of the Union producers shows significant variations between the beginning of the period considered (2020-2021) and the period 2022 to the investigation period. While the sales volume grew in 2021 by 5 % due to the impact of the COVID-19 pandemic and disruptions in supply chains coupled with the surge in demand for epoxy resins, this temporary increase was followed by the gradual decline in the sales of the Union producers over the remainder of the period considered, with the decrease reaching more than 30 % in the investigation period compared to 2020. Such evolution was due to the contraction of demand coupled with the increasing flow of the dumped imports from the countries concerned.

• (289) With respect to the evolution of the market share of the Union industry, the overall adverse trend is clearly visible over the entirety of the period considered, while the loss of market share is most striking on the annualised basis between 2021 and 2023/investigation period, when the Union industry lost each year 6 percentage points in its share of the Union market. Overall, the market share of Union industry decreased from 68 % to 52 % in the period considered.

• (290) The loss of the market share in a market with a slowdown in consumption aggravated the impact of the dumped imports of epoxy from the countries concerned, that gained market share (see recital (269)) at the expense of the Union producers.

4.4.2.3.   Growth

• (291) The Union consumption decreased by 11 % during the period considered, while the sales volume of the Union industry in the Union market decreased by 31 %. The consumption was rather volatile, with an increase of 11 % in 2021. The Union consumption then showed a decline from 2022 onwards, coupled with even higher drop in the sales of the Union producers and with an increase in the imports from the countries concerned. As a consequence, the Union industry lost market share in this shrinking market, contrary to the market share of the imports from the countries concerned.

4.4.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2020	2021	2022	2023	Investigation period
Number of employees	1 402	1 394	1 421	1 432	1 423
Index	100	99	101	102	102
Productivity (tonne/employee)	291	309	213	169	175
Index	100	106	73	58	60
Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.	Source: Macro questionnaire reply, Sampled Union producers, S&P Global intelligence.

• (293) The number of employees remained relatively stable during the period considered (+2 %). This is consistent with a stable capacity of production as the number of employees needed to operate the plants do not fluctuate according to the capacity utilisation rate.

• (294) The productivity per employee took an adverse turn in 2022. The situation further worsened in 2023 and during the investigation period. The low productivity from 2022 onwards was a result of the combination of stable headcount numbers over the period considered with the low levels of production. Overall, the productivity in tonnes per employee decreased by 40 % over the period considered.

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

• (295) All dumping margins were above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the countries concerned.

• (296) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

4.4.3.   Microeconomic indicators

4.4.3.1.   Prices and factors affecting prices

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

Table 8

Sales prices in the Union

	2020	2021	2022	2023	Investigation period
Average unit sales price to unrelated customers in the Union (EUR/ tonne)	[2 162 – 2 512 ]	[4 116 – 4 801 ]	[5 192 – 6 057 ]	[3 684 – 4 297 ]	[3 250 – 3 792 ]
Index	100	191	241	171	151
Unit cost of production (EUR/ tonne)	[2 367 – 2 762 ]	[2 679 – 3 126 ]	[4 599 – 5 366 ]	[4 559 – 5 318 ]	[4 121 – 4 808 ]
Index	100	113	194	193	174
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (298) The average unit sales price in the Union was very volatile during the period considered. The uptick in demand, in association with the supply chain disruptions and rising inflation in 2021 and 2022 resulted in a remarkable increase in prices that exceeded the increase in costs. However, this trend was not sustained and following the emergence of an energy crisis in the Union in 2022, in combination with the destocking of the inventories by the buyers and the pressure exerted by the dumped imports, the situation quickly deteriorated in 2023, when the Union producers were simply unable to absorb the rising production costs. This resulted in a situation of depressed sales prices of the Union producers in 2023 and in the investigation period which were below the cost of production in those periods.

• (299) During the investigation period, the cost of production saw a correction once the energy crisis subsided, but the sales price decreased even more sharply as shown in Table 8 (in the investigation period and compared to 2022, the cost of production went down by 10 % but the average sales price decreased by a larger margin, namely by 37 %). As a result, the sampled Union producers were operating at a significant loss during the investigation period. The major disparity between the cost of production and sales prices by the Union producers is illustrative of the magnitude of the impact that the increasingly large, dumped imports had on the market behaviour, pricing policy and competitiveness of the Union producers.

• (300) Overall, during the period considered, sales prices increased by 51 %, while this increase was outpaced by the rise in costs of production (increase of 74 % during the period considered).

4.4.3.2.   Labour costs

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

Table 9

Average labour costs per employee

	2020	2021	2022	2023	Investigation period
Average labour costs per employee (EUR)	[108 781 – 126 911 ]	[115 950 – 135 275 ]	[127 900 – 149 217 ]	[105 066 – 122 577 ]	[105 166 – 122 694 ]
Index	100	107	118	97	97
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (302) Average labour cost per employee was relatively stable, decreasing by mere 3 % during the period considered. The Commission does not consider that the evolution of the average labour cost would in any way affect the injury assessment in this case.

4.4.3.3.   Inventories

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

Table 10

Inventories

	2020	2021	2022	2023	Investigation period
Closing stocks (tonnes)	[19 743 – 22 860 ]	[32 515 – 37 649 ]	[21 329 – 24 697 ]	[18 479 – 21 397 ]	[25 612 – 29 656 ]
Index	100	165	108	94	130
Closing stocks as a percentage of production	8,8 %	13,2 %	14,8 %	16,0 %	20,8 %
Index	100	150	169	182	236
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (304) Year-end closing stocks as a percentage of production increased from 8,8 % in 2020 to 16 % in 2023 and even 20,8 % in the investigation period, when the impact of the high imports from the countries concerned, coupled with unfavourable market conditions was felt the most over the period considered.

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

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

Table 11

Profitability, cash flow, investments and return on investments

	2020	2021	2022	2023	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	[-2,2 – -1,6 ] %	[34,2 – 45,6 ] %	[11,7 – 15,6 ] %	[-25,3 – -18,4 ] %	[-37,4 – -27,2 ] %
Index	100	1 899	627	-1 141	-1 672
Cash flow (EUR)	[25 421 000 – 29 658 ]	[265 732 000 – 310 021 000 ]	[164 278 000 – 191 657 000 ]	[-26 506 000 – -22 892 000 ]	[- 101 026 000 – -87 250 000 ]
Index	100	1 045	646	-85	- 325
Investments (EUR)	[18 003 000 – 21 003 000 ]	[16 853 000 – 19 661 000 ]	[17 330 000 – 20 219 000 ]	[15 122 000 – 17 642 000 ]	[15 090 000 – 17 605 000 ]
Index	100	94	96	84	84
Return on investments	-4 %	150 %	63 %	-66 %	-93 %
Index	100	3 378	1 405	-1 472	-2 086
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (306) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. While the lossmaking situation in 2020 was driven by the initial market response to the COVID-19 pandemic, the profitability quickly bounced back and reached exceptional levels in 2021 as the COVID-19 pandemic ultimately led to a boost in demand for the epoxy-containing products and the disruption in supply chains resulted in tightening of the supply. While the profitability achieved in 2022 was already more than halved by the emerging energy crisis, the sampled Union producers managed to pass the significant increase in costs to the buyers in the Union. However, starting from 2023, the situation became unsustainable for the Union producers as they experienced a significant downturn in operating rates leading to higher fixed unit costs and declines in sales volumes, leading to a highly loss-making situation in 2023 and the investigation period.

• (307) The net cash flow is the ability of the Union producers to self-finance their activities. The net cash flow analysis shows a downward trend from 2021 and a significant slump in 2023 and during the investigation period, when the cash flow is negative for the first time during the period considered. The sampled producers delayed some investments or postponed some non-essential maintenance during the investigation period, but these measures were not sufficient to avoid negative cash flows.

• (308) While investments were relatively stable in the period 2020-2022, they showed a declining trend in 2023-investigation period, similar to other main injury indicators.

• (309) The return on investments is the profit in percentage of the net book value of investments. In light of the developments described above, it was continuously decreasing from 2021 until the end of the period considered, falling from a healthy +63 % in 2022 to a telling -93 % in the investigation period.

• (310) The sampled Union producers’ ability to raise capital was severely affected by the deterioration in their economic performance towards the end of the period considered and by the uncertain market outlook.

4.4.4.   Conclusion on injury

• (311) The main macro-indicators showed a negative trend during the period considered: Union production volume dropped by 39 %, capacity utilisation by 34 %, Union sales volume by 31 % and productivity by 40 %. While the said indicators showed a positive trend in 2021 compared to 2020, they then kept declining dramatically for the remainder of the period considered.

• (312) A similar picture can be drawn for the micro-indicators. Profitability of sales in the Union was positive between 2021 and 2022 but started declining thereafter and the Union industry became loss-making in 2023 and in the investigation period. Similarly, cash flow that has been positive from 2020 to 2022, became negative in 2023 and in the investigation period. Year-end closing stocks as a percentage of production climbed over 15 % in the second part of the period considered, when the impact of the increasing imports from the countries concerned was already felt by the Union industry.

• (313) The import volumes by the countries concerned increased more than four times over the period considered. In a context of a decrease in annual consumption by 43 031 tonnes in the period considered, annual imports from the countries concerned increased by 44 023 tonnes over the same period, which resulted in the exporters from the countries concerned increasing their combined market share from 3,5 % in 2020 to 16,9 % in the investigation period as their prices significantly undercut the Union industry’s prices from 2021 onwards. During the investigation period, the undercutting margins of the exporters from the countries concerned were significant and ranged between 20-28 %. (as outlined in recital (275)).

• (314) The low-priced dumped imports from the countries concerned also caused significant price depression to the Union industry. As a result, the Union industry was unable to sell at prices covering their cost of production and became loss-making in 2023 and in the investigation period.

• (315) Throughout the period considered net investments decreased by 16 % and the return on investment as well as the cash flow became negative starting from 2023, even though the number of employees increased during the period considered by 2 %, the productivity decreased by 40 % over the same period, resulting in a higher labour cost per tonne of epoxy resin produced. It follows that while the employment levels have been stable throughout the period considered, the Union industry is faced with a significant pressure to maintain its workforce as it operates at significantly reduced capacities due to the massive flow of dumped imports.

• (316) As set out above, financial indicators such as profitability, cash flow and return on investment deteriorated dramatically during the period considered. These negative developments affected the ability of the Union industry to make any significant investments and to raise capital, thus impeding its growth.

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

5. CAUSATION

• (318) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the countries concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the countries concerned was not attributed to the dumped imports. These factors are: imports from other third countries including Korea, export performance of the Union producers, effects of the energy crisis and the increased cost of production, decline in the Union consumption and business decisions of the Union producers.

5.1.   Effects of the dumped imports

• (319) The import quantities from the countries concerned during the period considered increased more than four times, from 13 526 tonnes in 2020 to 57 549 tonnes in the investigation period. This steep increase, as explained in recital (313), coincided with a 11 % drop in the domestic consumption while the Union producers’ domestic sales fell by 31 % over the same period.

• (320) As a result, in the period considered, the combined market share of the countries concerned increased from 3,5 % to 16,9 %. Meanwhile, the market share of the Union industry decreased continuously from 68 % in 2020 to a mere 52 % in the investigation period.

• (321) The period 2020-2021 was impacted by the COVID-19 pandemic, disruptions in supply chains and extraordinary surge in demand for epoxy-containing products, helping the Union producers to rebuff injurious effects of the rising dumped imports. However, the effects of the dumped imports became more palpable from 2022 onwards when the imports from the countries concerned kept increasing their market share in a shrinking market, exerting price pressure on the suffering Union industry. While in 2022 the Union producers still managed to achieve healthy profits, the pressure from increasing import volumes at dumped prices significantly below the production cost of the Union producers in 2023 and in the investigation period became unsustainable for the Union industry. The Union industry became unable to increase its sales prices to pass on to customers the increasing cost of raw materials because it faced unfair competition from imports of the product concerned. To mitigate losses in production volumes and market share, the Union producers were forced to reduce prices at the expense of their profitability. Indeed, from being profitable in 2021-2022, the Union industry became highly loss-making in 2023 and in the investigation period. Therefore, the low-priced imports from the countries concerned caused the prices of the Union industry to be depressed to a significant degree within the meaning of Article 3(3) of the basic Regulation.

• (322) In view of the above considerations, the Commission provisionally established that the material injury suffered by the Union industry was caused by the dumped imports from the countries concerned within the meaning of Article 3(6) of the basic Regulation. Such injury had both volume and price effects.

• (323) Cortex claimed that while the Chinese imports affect trade in the Union, the Commission should consider excluding imports from other countries concerned from the scope of the proceedings. Aditya Birla also argued that the increase in imports was mainly from the countries concerned other than Thailand (due to the benefits received from the subsidized energy prices), that Thai export and CIF import prices were higher than those of the other countries concerned, and that any injury was mainly due to the imports from China.

• (324) As set out in Section 4.3.1, effects of imports from all countries concerned in this case are assessed cumulatively and as concluded in the foregoing recitals, it is found that that the material injury suffered by the Union industry was caused by the dumped imports from all the countries concerned (China, Thailand, Taiwan). Moreover, and even when assessed individually, while the rate of increase of Chinese import volumes as well as the level of price undercutting over the period considered was more prominent compared to the imports from the other countries concerned, it follows from recitals (269) and (272) to (276) that the trends observed for Thai and Taiwanese imports equally support the conclusion that those caused injury to the Union industry, as a result of both the increase in their volumes and their price levels, which is clearly shown by the significant undercutting found vis-à-vis the Union industry prices. Therefore, Cortex’s and Aditya Birla’s claims were provisionally dismissed.

• (325) PPG argued that profitability of the complaining producers increased with the import volume (between 2020 and 2021) and started to decrease significantly while the import volume only increased discretely (between 2021 and the investigation period). According to PPG, this shows the lack of correlation between epoxy resins imported from the countries concerned and injury to the Union industry.

• (326) First, reference is made to the context described and the Commission findings in recital (321) above. Second, contrary to PPG’s claim, the imports from the countries concerned were steadily and at a significant rate increasing every single year of the period considered (hence not only between 2020 and 2021), while the market share of the Union producers was dropping and imports from third countries (apart from Korea) were largely stable. The increase of imports from the countries concerned was far from discrete between 2021 and the investigation period – the Union market share of these imports reached 16,9 % in the investigation period compared to 8,4 % in 2021. Therefore, PPG’s claim was provisionally rejected.

• (327) PPG further claimed that the import prices from the countries concerned, except for China, increased over the period considered. which raises serious doubts that those imports could have been responsible for the injury suffered.

• (328) PPG’s claim was found to be misleading. While it is true that compared to 2020, prices for Thailand and Taiwan have increased, the year-by-year analysis showed that prices increased in 2021 and 2022, they sharply decreased in 2023 and the investigation period. Moreover, price trends cannot be viewed in isolation from other injury indicators and general market dynamics. In the present case, the observed trend needs to be seen in a context of rise in raw material costs and inflationary pressure. Furthermore, import prices from the countries concerned (including Taiwan and Thailand) viewed against the Union industry prices show significant undercutting. PPG’s argument was therefore provisionally rejected.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

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

Table 12

Imports from third countries

Country		2020	2021	2022	2023	Investigation period
Korea	Volume (tonnes)	42 271	42 590	43 772	53 735	52 382
	Index	100	101	104	127	124
	Market share	11 %	10 %	12 %	16 %	15 %
	Average price	2 143	3 962	4 590	2 908	2 684
	Index	100	185	214	136	125
Switzerland	Volume (tonnes)	34 166	40 716	33 930	28 245	27 396
	Index	100	119	99	83	80
	Market share	8,9 %	9,6 %	9,3 %	8,3 %	8,0 %
	Average price	4 383	4 573	6 170	6 318	6 236
	Index	100	104	141	144	142
India	Volume (tonnes)	10 832	11 251	14 686	7 339	7 243
	Index	100	104	136	68	67
	Market share	2,8 %	2,73 %	4,0 %	2,2 %	2,1 %
	Average price	1 939	3 716	4 159	3 336	3 170
	Index	100	192	215	172	163
Other third countries	Volume (tonnes)	23 142	21 310	19 767	18 576	17 935
	Index	100	92	85	80	78
	Market share	6,0 %	5,0 %	5,4 %	5,5 %	5,3 %
	Average price	5 327	7 114	9 480	9 799	10 081
	Index	100	134	178	184	189
Total of all third countries except the countries concerned	Volume (tonnes)	110 411	115 868	112 155	107 895	104 957
	Index	100	105	102	98	95
	Market share	29 %	27 %	31 %	32 %	31 %
	Average price	3 484	4 733	5 874	5 016	4 909
	Index	100	136	169	144	141
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (330) During the period considered, the only third countries from which significant volumes of epoxy resins were imported into the Union were Korea, Switzerland and India.

• (331) Overall, third countries other than the countries concerned had together a Union market share between 27 % and 32 % over the period considered. However, the market share remained stable between 2022 and the investigation period, when the injurious effects of dumped imports were felt the most. Also, in absolute numbers, the import volumes remained relatively stable when comparing 2020 with the investigation period.

• (332) Looking at the importers individually, Korea accounted for nearly half of the imports of third countries. Korean market share oscillated between 11 % in 2020 and 15 % in the investigation period and saw an overall increase of 4 percentage points in the investigation period in relation to 2020, also to the detriment of the Union industry. Furthermore, the Korean prices were below the Union sales prices over the period considered. The Commission found that the Korean imports admittedly contributed to the injurious situation of the Union industry (especially in light of the market shares on the Union market) in the period considered. However, given the volumes and prices of the dumped imports from the countries concerned, and their development throughout the period considered, it cannot be concluded that imports from Korea were capable of attenuating the causal link between the dumped imports from countries concerned and the material injury they caused to the Union industry.

• (333) With regards to Swiss and Indian imports, import prices increased by 42 % and 63 % respectively over the period considered and from 2022 onwards, their prices were consistently above the average import price of the countries concerned. Moreover, and importantly, both Switzerland’s and India’s market shares decreased over the period considered (from 8,9 % to 8 % in case of Switzerland and from 2,8 % to 2,1 % in case of India) and hence these imports cannot be the cause of the material injury to the Union industry. Moreover, in case of Switzerland, the prices in the period considered were higher or equivalent to those of the Union producers.

• (334) In light of the above, the Commission provisionally concluded that imports from Korea contributed to the material injury of the Union industry, however not to the extent that they would attenuate the causal link between the injury suffered by the Union industry and the dumped imports from the countries concerned.

5.2.2.   Export performance of the Union industry

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

Table 13

Export performance of the sampled Union producers

	2020	2021	2022	2023	Investigation period
Export volume to unrelated customers (tonnes)	[56 905 – 65 890 ]	[53 455 – 61 895 ]	[40 480 – 46 872 ]	[27 036 – 31 305 ]	[27 538 – 31 885 ]
Index	100	94	71	48	48
Average price (tonnes)	[2 157 – 2 497 ]	[3 826 – 4 430 ]	[5 005 – 5 795 ]	[3 905 – 4 522 ]	[3 467 – 4 014 ]
Index	100	177	232	181	161
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (336) Similarly to production volumes and domestic sales, export volumes of the Union industry significantly decreased over the period considered. Furthermore, export prices followed the same trend as prices on the Union market, increasing in 2021 and 2022 before significantly falling in 2023 and in the investigation period.

• (337) In general, the Commission noted that the producers from the countries concerned are also active in the traditional Union export markets, which explains the challenges faced by the Union industry to maintain volumes and prices also in the export markets.

• (338) Furthermore, in the period 2020-2022 when the Union successfully fended off the low-priced imports from the countries concerned, the domestic prices of the Union producers were higher than the export prices; however, the situation reversed in 2023-investigation period, when the injurious effects of the dumped imports were most pronounced. Therefore, in a situation of the material injury, when the export prices trended higher than the domestic prices, if anything, the export sales mitigated the situation of the Union producers, rather than aggravating it.

• (339) In view of the above considerations, the export performance was not liable to attenuate the causal link between the dumped imports originating in the countries concerned and the injury suffered by the Union industry.

• (340) Aditya Birla and PPG argued that the injury suffered by the Union industry was due to the loss in the export market share. According to Aditya Birla, even if the complainant suffered injury in the Union, this does not explain why the complainant was not able to increase its export sales. As outlined in recitals (335) to (337) above, the Union producers were confronted with the same challenges in the export markets, having to compete against the countries concerned and loss of export markets cannot explain the loss of domestic market share and heavily depressed Union prices, leading to negative profits in the Union market. Therefore, Aditya Birla’s and PPG’s claim had to be rejected.

5.2.3.   Increased cost of production and the energy crisis

• (341) ERC claimed that the main factor causing deterioration of complainant’s performance and profitability was the increased cost of production and not the dumped imports. In this context, ERC also argued that in 2022-2023, the electricity prices in the Union soared, which became relevant for the costs of production and profitability of the Union producers. Aditya Birla also submitted that the injury suffered by the Union industry is due to the high cost of production resulting from the energy crisis and due to rise in raw material prices. According to Aditya Birla, the increase in exports from the countries concerned occurred in 2022 and in the investigation period, which is the period when the Union industry was most impacted by the increase in energy prices and non-availability of the raw materials. In the same vein, Cortex claimed that the decrease in profitability for the epoxy resins in 2023 was mainly attributable to occurrence of extraordinary economic conditions such as the energy crisis in Europe. Furthermore, PPG also referred to the increase in energy costs after 2021 as a reason for deterioration of the Union industry’s situation.

• (342) It is not disputed that the energy crisis brought a spike in energy costs and subsequently in the cost of production of epoxy resins in the Union, as recalled in recital (305) of the present Regulation. However, in the period 2021-2022, despite the rising production costs and the energy prices reaching their highest levels, the Union producers were able to increase their sales prices to absorb their rising unit cost of production and achieve their highest profitability levels over the period considered. On the other hand, in 2023 and the investigation period, when the upward trend in energy prices had reversed (contrary to what ERC and Aditya Birla claimed), the profitability of the Union producers sharply decreased to reach alarmingly negative levels and the material injury to the Union industry became clearly visible. Furthermore, Aditya Birla failed to demonstrate that from 2022 onwards, there was an issue with availability of raw materials. In any event, dumped imports should not prevent EU producers from increasing prices in order to pass on cost increases. In a situation where the prices of the Union producers were heavily depressed by the increasing levels of dumped imports and the cost of production remained high, the plummeting profitability is merely a manifestation of the injury caused by dumped imports, rather than by a self-inflicted decline in performance. The claims were therefore dismissed.

5.2.4.   Consumption decline

• (343) As outlined in recitals (257) to (258) above, the Union consumption increased by 11 % from 2020 to 2021, as a result of surging demand. The demand then dropped below 2020 levels in 2022 to decrease even further in 2023-investigation period.

• (344) ERC submitted that the lower demand from 2022 was a direct outcome of standard market adjustments by paint manufacturers to changing market conditions rather than the result of any unfair competitive practices. PPG also referred to the significant decrease in consumption after 2021 in the context of causality. Aditya Birla equally contended that with a consumption decline, sales would also decline and that such evolution had nothing to do with the imports from the countries concerned. Furthermore, Cortex claimed that it was the problems in the construction sector, one of the main markets for epoxy resins, that had a direct impact on profitability for the product concerned. Cortex claimed that the decrease in profitability of the Union producers was influenced by the overall level of consumption of the product concerned in the Union.

• (345) The Union market indeed contracted by 7 percentage points between 2022 and 2023 (and beyond) and by 11 % overall during the period considered. Such decline was a result of the COVID-19 pandemic aftermath, de-stocking of inventories and a general economic downturn. Under normal conditions of competition, in such a shrinking market, sales volumes of all the market participants would have gone down more or less equally. However, in the present case, the countries concerned gained an additional 5,2 percentage point market share of the Union market between 2022 and the investigation period to the detriment of the Union industry (which lost 6 percentage points of market share), while the total market share of the other importing countries remained stable. Furthermore, it was not explained by the parties why the contraction in demand would force the Union industry with over 55 % market share to suddenly sell their products well below cost. Moreover, the demand dropped by almost 14 % already between 2021 and 2022 (hence twice as much as between 2022-2023), while the Union producers were still able to enjoy healthy profits.

• (346) Therefore, the claims of the parties were dismissed as the economic contraction was not found to cause material injury to the Union industry in this case.

5.2.5.   Complainants’ business decisions

• (347) Cortex, PPG and Akzo Nobel claimed that in 2020-2021, there was a significant increase in demand for epoxy resins while, at the same time, an unreasonable and significant price increase by the complaining producers on the Union market was observed. According to Cortex and PPG, the complaining producers imposed prices significantly higher than the production costs, which then encouraged customers to look for alternative sources of supply. Consequently, Cortex maintained that the increase in imports from 2020-2021 from the countries concerned was a result of natural actions of market forces, while in 2022 and beyond the import volumes from countries concerned remained stable.

• (348) As set out in recital (306), the sampled Union producers were lossmaking in 2020 and it was only in 2021 that they posted exceptional profits as a result of (i) a growth in demand, (ii) disruption in supply chains leading to a tightening of the supply and (iii) the increase in sales prices (outpacing the gradual increase in hydrocarbon prices). The response of the Union producers to the then prevailing market conditions must be seen as a rational business response for an economic operator in a market economy. The deterioration of the Union industry amid a surge in low-priced imports cannot however be seen as resulting from market forces. It is noted that the cumulated imports from the countries concerned were steadily increasing every single year of the period considered (hence not only between 2020-2021), while the market share of the Union producers was dropping and total imports from other countries were stable. Moreover, the import prices from each of the countries concerned undercut the Union prices already from 2021. Although the injurious effects of the low-priced and increasing imports only became more pronounced in 2023 and in the investigation period, the strategy of the exporters from the countries concerned remained essentially unchanged over the period considered. In conclusion, there is no link between the pricing policy and other business decisions of the Union industry and the injury suffered. The injury of the Union industry does not result from free market forces, but rather from unfair commercial practices of the exporters from the countries concerned.

• (349) PPG further referred to Union producers’ alleged strategy to prioritize margins/higher unit values over the sales volumes in 2021. PPG however failed to substantiate how and why this commercial behaviour in the period where the Union industry enjoyed healthy profits would have caused or even contributed to the deterioration of the Union industry conditions from 2022 onwards, let alone how such behaviour would have attenuated the causal link between the dumped imports and material injury of the Union producers.

• (350) Cortex further submitted that apart from the pricing decisions, other business decisions of the complaining producers (such as shutting down BPA production lines, a cumene plant or epoxy resin operations outside the Union) likely had an impact on their general level of production and profitability. Along similar lines, Aditya Birla claimed that the significant decline in production was due to the closure of plants of Olin and Westlake which was strategically planned.

• (351) First, neither Westlake nor Olin shut down their epoxy resin plants in the Union during the period considered. While the Union producers may have scaled back their operations in a dwindling market, overall, as set out in Table 5, the production capacity remained at stable levels throughout the period considered. Second, Cortex failed to substantiate how operations of other, albeit affiliated producers or operations relating to different assets than epoxy resins would affect profitability of the Union producers in the epoxy resins business.

• (352) Furthermore, PPG referred to insufficient investments made by Olin and Westlake into their outdated facilities as well as to number of force majeure events invoked by Westlake in the context of causality.

• (353) It is noted that the consolidated level of investment for both sampled Union producers was relatively stable over the period considered (mainly in 2020-2022) and was in any case higher relative to the levels of production and sales in the investigation period compared to the beginning of the period considered. While the investment activity was muted towards the end of the period considered (resulting in a 16 % drop during the period considered) this was due to the weak market and most recent financial performance of the companies concerned. Nevertheless, a vast array of investments were made over the period considered to: (i) upgrade equipment and modernise facilities such as controlling systems to debottleneck the production process; (ii) achieve efficiency gains and to ensure compliance with environmental and safety regulations. Invoking force majeure on isolated occasions is equally not an indication of any broader implications for the production efficiency of the Union producers. Overall, there is no indication that the observed decrease in investment would in any way affect competitiveness of the Union producers. In conclusion, PPG failed to substantiate how the allegedly insufficient investments would cause injury to the Union industry. The claims were therefore rejected.

5.3.   Conclusion on causation

• (354) A causal link was established between the dumped imports from the countries concerned on one hand and the injury suffered by the Union industry on the other hand. There was a coincidence in time between the significant increase in volume and market share of the dumped imports and the worsening of the Union industry’s performance, visible in particular from 2022 onwards. In a relatively weak market with demand contraction, the increased volumes of dumped imports eroded the operating rates of the Union industry and its ability to set prices that would absorb the high costs of production, thereby clearly pointing to the existence of price depression. This situation resulted in a lossmaking situation of the Union producers in 2023 and during the investigation period.

• (355) The Commission examined other possible factors that may have had an impact on the situation of the Union industry. The Commission distinguished and separated the effects of these factors on the situation of the Union industry from the injurious effects of the dumped imports.

• (356) Regarding the effects of imports from other third countries, the Commission concluded that, except for the Korean imports, those imports did not cause injury to the Union industry. The third countries overall had stable market shares and prices above those of the dumped imports, notably in the period 2022 to the investigation period when the injurious effects of the dumped imports were most pronounced. As for the Korean imports specifically, they undercut the Union sales prices over the period considered and increased their Union market share from 11 % to 15 % over the period considered, while China, Taiwan and Thailand increased their cumulative market share from 3,5 % to 16,9 % ⁹¹. Therefore, while the Korean imports might have contributed to the injurious situation of the Union industry, Korean imports did not attenuate the causal link between the imports from countries concerned and the injury suffered by the Union industry.

• (357) The export performance of the Union industry equally did not attenuate the causal link. The export sales, in volume as well as in price followed a similar pattern to that observed for the Union sales over the period considered. This is because the Union producers face the same challenges in their traditional export markets, having to compete against producers from the countries concerned with their low-priced imports. In conclusion, while the effect of the export performance on the Union producers contributed to the adverse situation at the Union producers, for the reasons explained in recitals (335) to (340), it did not break the causal link between the dumped imports and the injury suffered by the Union industry.

• (358) With respect to the consumption decline and the increase in cost of production resulting from the rise in raw material prices, it is undisputable that the Union industry was faced with numerous challenges over the period considered. However, had it not been for the price pressure from the dumped imports, the Union industry would have been able to pass on the cost increases and adequately respond to the changing market conditions. As noted above, dumped imports should not prevent Union producers from increasing prices in order to pass on cost increases. Therefore, while the energy crisis and demand contraction presented a significant challenge for the Union producers, these developments were found not to have caused material injury to the Union industry.

• (359) Regarding the business decisions made by the Union producers, be it with respect to their price increases, investment decisions or plant operations, such decisions were made in response to the prevailing market conditions and must be viewed as rational business decisions that any economic operator would have made in a market economy. Thus, the Commission found that those decisions did not cause material injury to the Union industry.

• (360) On the basis of the above, the Commission concluded at this stage that the dumped imports from the countries concerned caused material injury to the Union industry and that the other factors (imports from Korea and the export performance of the Union industry), considered individually or collectively, did not attenuate or break the causal link between the dumped imports and the material injury. The injury consists of reduced market share, production, production capacity utilisation, productivity, profitability, closing stocks, cash flow and return on investments. Furthermore, as explained above in recital (276), the Union industry suffered price depression caused by imports from the countries concerned.

6. LEVEL OF MEASURES

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

6.1.   Injury margin

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

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

• (364) The profit for the sampled Union producers widely fluctuated between within the period considered. The exceptionally high profits in 2021-2022 were achieved in an extraordinary period of demand fuelled by the COVID-19 economy and supply chain restraints. Therefore, it would not be appropriate to use the profit figures from 2021-2022 as a basic profit in accordance with Article 7(2c) of the basic Regulation. Furthermore, for the years prior to the period considered, precise or appropriate levels of profitability could equally not be identified either given the lack of reliable profit data due to corporate system constraints or the swings from large profits to highly negative profitability. The Commission therefore established the target profit to determine the non-injurious price at 6 %, in accordance with Article 7(2c) of the basic Regulation. Furthermore, none of the sampled Union producers made a substantiated claim for investments foregone or R&D and innovation costs. In view of those facts, the Commission resorted to the use of the minimum 6 % target profit which was added to the Union industry’s actual cost of production to establish the non-injurious price.

• (365) As no substantiated claims were made pursuant to Article 7(2d) concerning current or future costs which result from multilateral environmental agreements and protocols thereunder or from the listed ILO Conventions, no further costs were added to the non-injurious price thus established.

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

• (367) The injury elimination level for ‘other cooperating companies’ and for ‘all other imports’ originating in the respective country concerned is defined in the same manner as the dumping margin for these companies and imports.

Country	Company	Dumping margin (%)	Injury margin (%)
China	Jiangsu Sanmu Group Co., Ltd.	24,2	116
China	Sinochem Group: — Jiangsu Ruiheng New Material Technology Co., Ltd. — Nantong Xingchen Synthetic Material Co., Ltd. — Jiangsu Kumho Yangnong Chemical Co., Ltd.	40,8	118,9
China	Other cooperating Chinese companies	30,3	117,1
China	All other imports originating in China	40,8	118,9
Taiwan	Chang Chun Plastics Co	10,8	105,8
Taiwan	Nan Ya Plastics	11,0	96,5
Taiwan	All other imports originating in Taiwan	11,0	105,8
Thailand	Aditya Birla Chemicals (Thailand) Limited	32,1	84,2
Thailand	All other imports originating in Thailand	32,1	84,2

6.2.   Conclusion on the level of measures

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

Country	Company	Provisional anti-dumping duty
China	Jiangsu Sanmu Group Co., Ltd.	24,2 %
China	Sinochem Group: — Jiangsu Ruiheng New Material Technology Co., Ltd. — Nantong Xingchen Synthetic Material Co., Ltd. — Jiangsu Kumho Yangnong Chemical Co., Ltd.	40,8 %
China	Other cooperating companies	30,3 %
China	All other imports originating in China	40,8 %
Taiwan	Chang Chun Plastics Co	10,8 %
Taiwan	Nan Ya Plastics	11,0 %
Taiwan	All other imports originating in Taiwan	11,0 %
Thailand	Aditya Birla Chemicals (Thailand) Limited	32,1 %
Thailand	All other imports originating in Thailand	32,1 %

7. UNION INTEREST

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

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

7.1.   Interest of the Union industry

• (371) As explained in recital (249), the Union industry consist of six groups of producers manufacturing the product under investigation during the investigation period.

• (372) The Union epoxy resin industry is fundamental to the Union’s industrial base. Epoxy resin, a water-resistant chemical, is used for coatings and adhesives in the defence, automotive, aerospace, electronics, construction, medical devices, energy, and numerous other critical industries. Epoxy resin is also used for household and consumer goods and in food processing and packing.

• (373) Epoxy resin equally plays an important role in the energy transition as products used for renewable energy production and storage (such as wind turbine blades, batteries, fuel cells, and solar panels) incorporate epoxy resin as an irreplaceable component to ensure longevity and efficiency. The Association of Chemical Industry of the Czech Republic (which is in support of the measures and has the complaining Czech producer Spolchemie as one of its members) also stressed that by ensuring a level playing field in the Union, green transition in the Union’s chemical supply chain and the climate goals can be achieved.

• (374) Overall, imposition of measures in this case would likely lead to a higher volume of sales for the Union producers and, therefore, better capacity utilization and recovery in operating margins and profit. The improved performance would in turn lead to sustained levels of investment and employment and promotion of continued innovation.

• (375) The measures would also benefit the upstream industries, which will see more sustainable demand for raw materials with increasing production volumes of epoxy resins.

• (376) Without measures, it would be more likely that the epoxy resin manufacturing footprint in the Union will be further eroded. Falling utilisation rates would lead to unsustainably high fixed-cost operations and sharp reductions in the investments resulting in potential job losses, which in turn would make the operations even less able to compete with dumped imports from the countries concerned. As also observed by the Polish Chamber of Chemical Industry (in support of the measures), imports of epoxy resins at prices that do not reflect the fair market value impact negatively not only the epoxy resin market, but also upstream markets (such as the one for phenol).

• (377) Furthermore, in light of the ongoing trade defence investigations in the United States of America against the countries concerned, if duties are imposed, exports would likely be redirected to other destinations, such as the Union, given its attractiveness as an alternative market. This diversion of trade flows towards the Union would exacerbate the situation of the Union industry even more in the absence of measures.

• (378) The Commission thus concluded that it would be in the interest of the Union industry to impose anti-dumping duties.

7.2.   Interest of users

• (379) In the present case, users predominantly representing the coating/painting segment and wind industry segment came forward. The latter represent two of the principal user’ applications of the product concerned. Several users (PPG, Akzo Nobel, Sherwin Williams, Siemens Gamesa, Allnex Europe) replied to the user questionnaire made available at the beginning of the investigation. Other users (MIPA and Emil Frei) participated in the investigation without completing the dedicated user questionnaire.

• (380) For users in the coating industry, their financial performance shows (at least for the users who submitted structured questionnaire replies covering their entire Union coatings business) that they enjoyed large profit margins, going even into double digits in the investigation period. Moreover, the submissions for the coatings industry users indicated that the proportion of the epoxy resin cost on their cost of production is limited and accounted generally for no more than 10 % of the cost of production. Furthermore, their revenues derived from the products incorporating epoxy resins was no higher than 40-45 % (and often much lower than that).

• (381) Regarding the users in the wind industry, while in fragile state, the user who came forward with a reply to the Commission questionnaire (Siemens Gamesa) dominates the offshore wind market and introduced contractual mechanisms to hedge against potential fluctuations in raw material prices and the cost of epoxy resins on the cost of wind turbine (business in which the wind industry users operate ⁹²) is only around [0-3]%.

• (382) In the context of the users’ interest analysis, it is notable that several users (such as Akzo Nobel or Emil Frei) acknowledged that the Chinese imports of epoxy resins might be causing injury to the Union industry.

7.3.   Interest of unrelated importers

• (383) With respect to unrelated importers, two companies (Cortex and Comexim) cooperated in this investigation, including by providing replies to the Commission questionnaire. Another unrelated importer, Monchy also came forward, voicing its opposition against potential anti-dumping measures. Cortex was in favour of imposing anti-dumping measures on China, claiming that such course of action would lead to a restoration of normal trade conditions, however it opposed the application of the measures to countries other than China.

7.4.   Comments of the users and importers

• (384) Cortex argued that the broad application of anti-dumping measures (involving other countries than China) is not in the Union interest. According to Cortex, the ability of Union operators to meet the needs of the Union market for epoxy resins is limited and may not be sufficient. Comexim and Monchy also argued that the volume produced in Europe is not sufficient to cover the Union demand. PPG also submitted that it is critical to maintain alternative sources of supply at competitive prices given the reduced production and several force majeure declarations by the Union producers in the past. Sherwin Williams also argued that Union capacity is not sufficient to cover the Union demand and that duties would lead to a decreased availability of the product concerned on the Union market.

• (385) Furthermore, according to PPG, imposition of anti-dumping duties will lead to further concentration of the epoxy resin market in the hands of large producers, to the detriment of consumers and market competition as a whole.

• (386) Finally, according to PPG, the duties would hinder the accomplishment of the Union’s carbon neutrality and renewable energy goals, in so far as it would provoke disruptions in the supply chain of the epoxy resins. Siemens Gamesa Renewable Energy (‘SGRE’) also submitted that the imposition of anti-dumping measures would run counter to the energy policy objectives set by the Union, that the users would shift their production outside the Union or even leave the market entirely and that there are no viable alternatives to the imports of epoxy resins from the countries concerned. Sherwin Williams also expressed a concern that imposition of duties would lead to potential relocation of downstream industries outside the Union.

• (387) First, concerning the claim that the Union industry is not in a position to cover the demand and the possibility of other alternative sources, the Commission recalled that there are other large exporting countries such as India, Korea, or Switzerland and their producers which represent alternative sources of supply and pose a healthy competition to Union industry. Second, fairly priced Chinese, Thai and Taiwanese imports will not be prevented from entering the Union. Imposition of anti-dumping duties is hence not liable to bring about increased concentration of producers in the epoxy resin market. Third, the parties did not provide any substantiated evidence that the Union producers would not be able to satisfy the demand coming from the Union users. While the Union producers may have reduced their operating rates in a dwindling market, as set out in recital (351), their production capacity remained at stable and sufficient levels throughout the period considered.

• (388) Furthermore, in the absence of measures, not only would the existence of the epoxy resin industry in the Union be endangered, but equally the stability of epoxy supply for the epoxy users could be jeopardized. Contrary to what the parties have argued, reliance on dumped imports would undercut the Union efforts to develop its own reliable industrial base and to meet the renewable energy and carbon neutrality goals. Further to this, as one of the users (Allnex Europe) also remarked, while Chinese epoxy resins might exhibit variability in quality and performance, Union-produced resins are typically associated with consistency in applications where performance and regulatory compliance are critical.

• (389) Finally, given the level of profitability (mainly for coating industry) and/or the limited proportion of the epoxy cost on the cost of production of the users (see recitals (380) to (381) for more details) as well as existing alternative sources of supply, the imposition of measures should not have a prohibitive effect on the users, let alone force them to relocate outside the Union. The arguments of the parties were therefore rejected.

• (390) ERC also submitted that imposition of anti-dumping duties is not in the overall Union interest because such step would increase the prices of epoxy resins for the industrial users and final consumers in the Union. Cortex further submitted that the cost of the duties will be passed on all the way to consumers, hence affecting them. Finally, PPG claimed that the imposition of anti-dumping duties would lead to price increases of epoxy resins, which in turn would add pressure on PPG and other Union users to increase prices. In fact, PPG contented that it would be unable to pass on any increase in costs of materials resulting from the anti-dumping duties and that such cost increase would affect PPG's competitiveness in the Union market. Monchy also argued that imposition of measures would have an adverse effect on the financial performance and employment situation of the importer. Finally, SGRE submitted that the long-term technological survival of the user industry would be affected by the measures.

• (391) First, while the anti-dumping measures might lead to an increase in the epoxy price and might have an adverse effect on some importers, user industries and final users of epoxy-containing products, this claim is purely speculative as no evidence was provided to quantify the effect that the duties would have. Furthermore, market intelligence sources (namely Tecnon OrbiChem in their ChemFocus Report ⁹³ from October 2024) project only a modest price increase if anti-dumping measures on epoxy resin imports are introduced. Moreover, any price correction would merely be a manifestation of the fair-trade restoration in a situation where Union industry prices were depressed by a downward pressure coming from the dumped imports. Furthermore, highly profitable operations of coatings users (such as PPG) will allow for absorption of any potential cost increase and the duties imposed are set at a level that will allow the users and importers to continue to import epoxy resins, at reasonable and fair prices. In conclusion, hypothetical adverse effects on the user industries and importers cannot outweigh the distinct need to restore a level playing field on the Union epoxy resin market, in particular where the preservation of the Union industry is at stake.