Commission Implementing Regulation (EU) 2025/670 of 4 April 2025 imposing a provisional anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Egypt, Japan and Vietnam

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 8 August 2024 the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel, originating in Egypt, India, Japan and Vietnam (‘the countries concerned’) on the basis of Article 5 of the basic Regulation. The Commission 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 24 June 2024 by the European Steel Association (‘EUROFER’ or ‘the complainant’). The complaint was made on behalf of the Union industry of certain hot-rolled flat products of iron, non-alloy or other alloy steel 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.

(3) Under Article 14(5) of the basic Regulation, imports of the product concerned may be made subject to registration for the purpose of ensuring that, if the investigation results in findings leading to the imposition of anti-dumping duties, those duties can, if the necessary conditions are fulfilled, be levied retroactively on the registered imports in accordance with the applicable legal provisions. The Commission decided to make imports of the product concerned subject to registration on its own initiative by Commission Implementing Regulation (EU) 2024/2719 (3) (‘the registration Regulation’).

(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 Egyptian, Indian, Japanese and Vietnamese authorities, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(5) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. Hearings were held with the Egyptian Government, the Egyptian cooperating exporting producer, Nippon Steel Corporation, JFE Steel Corporation, the Japanese Ministry of Economy, Trade and Industry, and the Consortium for the defence of Imports of Hot-Rolled Flat products (the ‘Consortium’).

(6) Following initiation, the Egyptian cooperating exporting producer claimed that hot-rolled flat products of steel (‘HRF’) exports from Egypt to the Union were negligible, accounting for only 1,3 % of the open market. It also argued that being the sole producer of HRF in Egypt, its capacity was much smaller compared to the other countries concerned and did not increase since 1999.

(7) The same cooperating exporter argued that it had a longstanding partnership with several European equipment suppliers, banks and government, as regards in particular the purchase of raw material, including high-grade iron ore from one Member State.

(8) These claims were examined respectively under sections on causality and EU interest.

(9) Comments were received from the Consortium, the Government of Egypt and the Egyptian cooperating exporting producer.

(10) The Consortium argued that the Union industry was already over protected with the implementation of a safeguard regime setting out a cap limiting to 15 % imports of third countries. The Consortium argued that in the last eight years, several anti-dumping and anti-subsidy measures have been taken against imports from major producing countries such as Brazil, China, Russia, Iran, Türkiye and Ukraine. This argument is further addressed in recital (198) below.

(11) One exporting producer claimed that rights of defence have been infringed due to the incompleteness of the open versions of the annexes to the complaint made available in the file open for consultation by interested parties.

(12) One Vietnamese exporting producer argued that the initiation was not compliant with Article 5.2 and 5.3 of the WTO Antidumping Agreement (‘ADA’) and Article 5(2)(d) of the basic Regulation, as it lacked positive evidence justifying the initiation of the proceeding.

(14) As a result, a high number of injury indicators requiring examination pursuant to Article 3(5) of the basic Regulation had not been dealt with in the complaint. These indicators include return on investments, factors affecting Union prices, actual and potential negative effects on cash flow, inventories, wages, or the ability to raise capital.

(15) Finally, this exporting producer claimed that the data provided by the complainant regarding market share were arithmetically impossible due to the consistently increasing domestic sales above the level of consumption growth.

(16) In reply to those arguments, it was considered that the version open for inspection by interested parties of the complaint contained all the essential evidence and non-confidential summaries of data provided under confidential cover in order for interested parties to exercise their right of defence throughout the proceeding.

(17) It is recalled that Article 19 of the basic Regulation and Article 6.5 ADA allow for the safeguarding of confidential information in circumstances where disclosure would be of significant competitive advantage to a competitor or would have a significantly adverse effect upon a person supplying the information or upon a person from whom that person has acquired the information.

(18) The information provided in the limited annexes to the complaint falls under these categories. In any event, the complainant has provided a meaningful summary of the information contained in the limited annexes of the complaint so that interested parties may have a ‘reasonable understanding of the substance of the information submitted in confidence’ as set forth by Article 19(2) of the basic Regulation. The complainant has adequately summarised the contents of these annexes, without disclosing sensitive company-specific data.

(19) The Egyptian government and the cooperating exporting producer both submitted comments on initiation, claiming the absence of dumping for Egyptian imports. They argued that the dumping for Egypt in the complaint was established by an ‘incorrect use of the official exchange rate rather than the parallel market rate’ to calculate the normal value and the dumping margin. They argued that the use of the ‘parallel market rate’ for the dumping calculation would demonstrate that Egyptian imports were not sold at unfairly low prices in the EU market. Both parties thus plead for the use of the parallel exchange rate for foreign currencies instead of the official Egyptian Central Bank (‘CBE’) rate for the conversion of Euro’s and the United States dollar (‘USD’) into Egyptian pounds (‘EGP’). To substantiate their claim, both parties referred to publications by Ernst & Young, the IMF and the European Commission and to Egyptian governmental decrees recognising the parallel market exchange rate, including a specific document issued after the investigation period by the Egyptian Financial Regulatory Authority authorising EZDK to use the actual exchange rates, supported by documents, rather than the official CBE ones for financial accounting and reporting purposes for the years 2023 and 2024.

(20) It has however been the Commission’s consistent practice to use official exchange rates in cases where there are allegations of the use of parallel exchange rates (4). In addition, it has to be noted that the official CBE rate was the only legal exchange rate that prevailed during the investigation period of the complaint. and that there were no publicly recorded historic rates of a ‘black’ or parallel market for the investigation period. The complaint was considered to be supported by sufficient evidence for the purpose of initiating the case. For the investigation itself however, the Commission relied only on verified data, i.a. submitted by the parties in the questionnaire replies and verified on spot. This claim was therefore rejected.

(21) Both parties also claimed that an error was made in the calculation of dumping in the complaint, by using ‘grossly inflated freight costs’ without justification. The cooperating exporting producer claimed in addition that errors were made in the calculation of dumping in the complaint by applying the official exchange rate for the purpose of determining the normal value and by using ‘erroneous domestic prices’ and by making reference to HRF prices of two Egyptian companies, who do not produce the product under investigation.

(22) Also in this regard it should be mentioned that the complaint was considered to be supported by sufficient evidence for the purpose of initiating the case. For the investigation itself, the Commission relied only on verified data, i.a. submitted by the parties in the questionnaire replies and verified on spot. This claim was therefore rejected.

(23) The two cooperating exporting producers in Vietnam, Formosa Ha Tinh Steel Corporation (‘Formosa’), Hoa Phat Dung Quat Steel Joint Company (‘HPDQ’) and a user, Marcegaglia Carbon Steel S.p.A, submitted comments on dumping calculations in the complaint, and in particular on the allegations by the complainant on existence of ‘a particular market situation’ in Vietnam not allowing for a proper comparison according to Article 2(3) of the basic Regulation. The three parties argued that the allegations in the complaint on the existence of the particular market situation were unfounded.

(24) The Commission recalled that when assessing the evidence in the complaint, it only took into account those elements for which evidence in the complaint was sufficiently adequate and accurate. It considered that it was not the case with regard the evidence contained in the complaint on the existence of the particular market situation in Vietnam. In addition, the calculated dumping in the complaint however was established without taking the particular market situation into account. The existence of the particular market situation was also not established by the Commission during the investigation. The dumping calculations for the two cooperating exporting producers were therefore calculated in line with the method detailed in Section 3.4 below. The Commission thus rejected the claims.

(25) Formosa argued that the domestic market in Vietnam experienced a high pressure from imports of the product under investigation from the People’s Republic of China (‘the PRC’) and India at dumped prices. As a result, the Government of Vietnam initiated an anti-dumping investigation, and provisional measures were to be imposed in January 2025. Formosa thus argued that the Commission should pay attention to the anticipated change in circumstances, and it should ensure that eventual anti-dumping measures to be imposed on Vietnam would be adequate to the new situation of lasting nature.

(26) The Commission recalled that the assessment of dumping and the resulting injury related to the investigation period and the period considered as mentioned in Section 1.8 below, and that it could not anticipate the evolution of the market conditions nor of the future behaviour of the exporting producers in Vietnam. If justified, provided that a change of circumstances of a lasting nature could be demonstrated a review of duties on that basis could be opened under Article 11(3) of the basic Regulation. The Commission thus rejected the claim.

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

(28) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected a sample on the basis of the highest representative production and sales volumes whilst ensuring a geographical spread. The Commission invited interested parties to comment on the provisional sample, but no comments were received.

(29) As a result, the final sample consisted of three Union producers located in three different Member States. It accounts for over 34 % of the estimated total volume of production and more than 35 % of the total estimated sales of the like product in the Union.

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

(31) No unrelated importers provided the requested information and agreed to be included in the sample.

(32) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in Egypt, India, Japan and Vietnam to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the Arab Republic of Egypt to the European Union, the Mission of India to the European Union, the Mission of Japan to the European Union and the Mission of the Socialist Republic of Viet Nam to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(33) With regard to Egypt, one group of exporting producers provided the requested information and agreed to be included in the sample. The group consists of a holding, Ezz Steel Company (‘Ezz Steel’), which owns an exporting producer, All Ezz Dekheila Steel Company (‘EZDK’), which in turn owns another exporting producer, Ezz Flat Steel Company (‘EFS’). In view of the low number of replies, the Commission decided that sampling was not necessary.

(34) With regard to India and Japan, five exporting producers in each country provided the requested information and agreed to be sampled. One of the Japanese companies, however, was not an exporting producer of the product concerned and was disregarded for the purpose of establishing a sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two exporting producers in both India and Japan, 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 two countries concerned were consulted on the selection of the samples. No comments on the samples were received.

(35) Finally, with regard to Vietnam, three companies provided the requested information and agreed to be included in the sample, however only two of them were exporting producers of the product concerned. In view of the low number of replies, the Commission decided that sampling was not necessary.

(36) No exporting producer requested individual examination under Article 17(3) of the basic Regulation.

(37) The Commission sent questionnaires to the three sampled Union producers, the complainant, the sampled exporting producers in Egypt, India, Japan and Vietnam, the known importers and the users. The same questionnaires were made available online (5) on the day of initiation.

(38) The complainant provided in the complaint sufficient prima facie evidence of raw material distortions in India and Vietnam regarding the product under investigation. 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 India and Vietnam. For this reason, the Commission sent additional questionnaires to the Government of India and Vietnam.

(40) The investigation of dumping and injury covered the period from 1 April 2023 to 31 March 2024 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2021 to the end of the investigation period (‘the period considered’).

(41) Following initiation, one exporting producer argued that the year 2020 should be included as the benchmark year in the period considered, in order to fully take into account the impact of market distortions from the COVID-19 crisis on the evolution of imports of hot-rolled flat steel products.

(42) The Commission considered that the period considered should not be extended to year 2020 since the market and the performance of the Union industry were severely influenced by exceptional circumstances triggered by the COVID-19 crisis. Such extension would not have added value. Moreover, the length of the period considered was consistent with normal investigation practices.

(43) Another exporting producer claimed that by selecting the investigation period at initiation the Commission left out the entire quarter between the end of the investigation period and the initiation date (8 August 2024) and thereby reduced the period considered to 2021 – Q1.2024 by excluding the full years 2020-2023.

(44) According to this exporting producer, this decision did not comply with the ‘legal standard prescribed’ by the basic Regulation and, by picking the non-representative year of 2021 as a benchmark it distorted the result of the material injury analysis.

(45) The Commission provisionally rejected these claims as, first, it is the Commission’s standard practice and it is in its discretion to select an investigation period covering a period of no less than six months immediately prior to the initiation date (6) and to consider for the injury assessment three calendar years in addition to the investigation period and not four. Second, the losses incurred by the overall industry, whether in the EU or abroad, in the year 2020 were mainly due to COVID-19 crisis, which resulted in production closures, with several steel plants idled across the world. Once the economy started to recover from COVID-19 as from 2021, the demand for the product under investigation followed suit, which resulted in increases in prices and profits. This means that the year 2020 represents an exceptionally low point, rather than a typical year. Third, since 2021 the supply and demand have stabilised so that a period considered starting in 2021 was considered appropriate. In any event, in line with the Commission's standard practice, the Commission analysed all relevant factors to assess the evolution of the situation of the Union industry over the period considered.

(47) Hot-rolled flat steel products are produced through hot rolling; this is a metal forming process in which hot metal is passed through one or more pairs of hot rolls to reduce the thickness and to make the thickness uniform, whereby the temperature of the metal is above its recrystallisation temperature. They can be delivered in various forms: in coils (oiled or not oiled, pickled or not pickled), in cut lengths (sheet) or narrow strips.