Commission Implementing Regulation (EU) 2025/1506 of 24 July 2025 imposing a definitive countervailing duty on imports of certain organic coated steel products originating in the People’s Republic of China following an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 of the European Parliament and of the Council

• (134) Subsidies pertinent to income and use for compensating the related future expenses or losses are recognized as deferred income and include in the current P&L, while those used for compensating the related expenses or losses incurred are directly included in the current P&L of the relevant accounting period.

• (135) Subsidies given to compensate past expenses or losses are recognised in the income statement in the period during which the subsidy is received. The positive balance between the compensation payments and the compensation amount transferred to deferred income should be considered as capital reserve.

• (136) Depending on type of the grant the applicant provided in the request quantification of the benefit obtained by each of the OCS producer in order to demonstrate that the subsidies in the form of grants received by the OCS producers did not diminish since the original investigation.

• (137) All grants and other ad hoc subsidies analysed above constituted a subsidy in the meaning of Article 3(1)(a)(i) of the basic Regulation in the form of a direct transfer of funds with regard to the grants and similar transfers of resources.

• (138) In the absence of cooperation from the GOC, no arguments were presented which would challenge the evidence presented by the applicant with regard to the continued benefits of the OCS producers from grants, whether given to reduce overcapacity or under specific programmes, or awarded ad hoc.

3.5.2.3.   Benefit

• (139) In the absence of cooperation from the GOC and the Chinese exporting producers, the Commission had no company-specific information on the basis of which to calculate the amount of subsidy conferred during the review investigation period. However, for the finding of continued subsidisation reached in the current expiry review investigation, the Commission does not consider it necessary to calculate such amounts. That being said, on the basis of the Annual Reports of the OCS producers, such amounts are not negligible.

3.5.2.4.   Specificity

• (140) These subsidies were considered to be specific in law or in fact, within the terms of Article 4(2) of the basic Regulation. In the absence of cooperation from the GOC, they are deemed to be granted to a limited number of steel companies in the encouraged steel sector, and/or because of the manner in which discretion of the granting authorities has been exercised for their granting.

3.5.2.5.   Conclusion

• (141) Accordingly, the Commission concluded that there is sufficient evidence showing that the OCS producers continued receiving grants as countervailable subsidies during the review investigation period.

3.6.   Government revenue forgone or not collected that is otherwise due

3.6.1.   Findings of the previous investigations

• (142) In the original investigation, the Commission established that OCS producers were receiving countervailable subsidies related with preferential treatment under income and other direct tax programmes and policies.

• (143) With regard to two specific programmes: Tax Policies for the Deduction of Research and Development Expenses, and Tax Concessions for Central and Western Regions, the Commission, having sufficient cooperation of the GOC and the Chinese exporting producers, based its findings as to the legal basis, eligibility, nature of the subsidy and its specificity on the verified questionnaire replies and was able to calculate individual subsidy rates for the sampled companies.

• (144) With regard to other eight programmes and policies, due to the lack of the cooperation of the GOC, the Commission based its findings on the evidence provided in the request and results of the anti-subsidy investigations of the US authorities on circular welded carbon quality steel line pipe ⁵⁴, certain steel wheels ⁵⁵, wire decking ⁵⁶, certain tow behind lawn groomers ⁵⁷, and the Commission’s own investigation on coated fine paper. It should be mentioned that two out of these eight programmes were found not to be countervailable.

• (145) In the first expiry review the Commission concluded that many Chinese steel producers, including at least three OCS producers, continue to benefit from at least two of the direct tax subsidy programmes countervailed in the original investigation, namely Preferential Tax Policies for the Companies that are Encouraged as High and New Technology, and Tax Policies for the Deduction of Research and Development Expenses. It was also confirmed that the schemes are still based on the same legal basis and thus there are no changes in the conclusions as to the eligibility, practical application of the schemes, the benefits conferred upon their use and their specificity.

• (146) In the first expiry review the applicant also provided evidence that some OCS producers were benefiting from three additional preferential income tax policies, not countervailed in the original investigation, namely Enterprise Income Tax Privileges for Resource Products from Synergic Utilization, Land Use Tax Exemption and Tax Reduction on Iron Ore. The evidence in this regard was based on the findings of the original HFR investigation and the audited accounts of the companies in question.

• (147) Due to insufficient cooperation of the GOC and the fact that sampled companies were not benefiting from these schemes in the original investigation, the Commission based its findings as to the legal basis, eligibility, nature of the subsidy and its specificity on the evidence provided in the request and results of the anti-subsidy investigation of the US authorities on coated free sheet ⁵⁸ and the Commission own investigation in coated fine paper ⁵⁹.

• (148) In the original investigation, the Commission established that OCS producers were also receiving countervailable subsidies related with preferential treatment under two indirect tax and import tariff programs:

• (a) Import tariff and VAT exemptions foreign-invested enterprises (‘FIE’) and certain domestic enterprises using imported equipment in encouraged enterprises, and

• (b) VAT refunds to FIE purchasing domestically produced equipment.

• (149) Additionally, one more regional scheme and several other ad-hoc tax privileges related with indirect taxes were countervailed.

• (150) In the first expiry review, on the basis of the original HRF investigation, it was concluded that certain companies being at the same time HRF and OCS producers continued to benefit from at least the first scheme listed in the recital 148. It was also confirmed that legal basis of the scheme did not change and thus there are no changes in the conclusions as to the eligibility, practical application of the scheme, benefits conferred upon its use and its specificity.

• (151) The direct and indirect tax and import tariff programmes described above were found to be subsidies within the meaning of Articles 3(1)(a)(ii) and 3(2) of the basic Regulation in the form of foregone government revenue which confers a benefit upon the recipient companies.

• (152) The subsidy schemes were also found to be specific within the meaning of Article 4(2)(a) of the basic Regulation given that the legislations pursuant to which the granting authority operated, limited the access to the schemes only to certain enterprises and industries. In addition, the lack of cooperation from the GOC did not permit the Commission to reach the conclusion to whether objective criteria of eligibility to certain schemes existed which made them also specific under the Article 4(2)(b) of the basic Regulation.

• (153) The second scheme referred to in recital 148 was additionally found specific with the terms of Article 4(4)(b) of the basic Regulation as contingent upon use of domestic over imported goods, while regional scheme and ad-hoc privileges were additionally found specific under the terms of Article 4(3) of that Regulation as their eligibility was limited to certain designated areas and municipalities within the jurisdiction of the authority of granting the subsidy.

3.6.2.   Continuation of the subsidy programme

• (154) In the expiry review request the applicant provided evidence that at least 27 OCS producers (groups of) continued to benefit from several EIT and VAT privileges.

• (155) The analysis and data provided in the request cover period 2018-June 2023 and are based on the financial reports of the companies under review and to the extend possible report specific companies, type of tax benefit and year of benefit.

• (156) Furthermore, recent HRF investigation confirmed that HRF producers (being often also OCS producers) continued to benefit from direct and indirect tax subsidy schemes in the review investigation period of the HRF procedure which covered year 2021 ⁶⁰.

• (157) The findings of this investigation as well as the most recent BEV and MAR investigations confirmed that the main tax schemes are still based on the same legal basis and thus there are no changes in the conclusions as to the eligibility, practical application of the schemes, the benefits conferred upon their use and their specificity.

• (158) In the absence of cooperation from the GOC, no arguments were presented which would challenge the evidence presented by the applicant with regard to the continued benefits of the OCS producers from income and other direct tax programmes as well as indirect tax programmes and policies.

• (159) The schemes in question are considered to be subsidies within the meaning of Articles 3(1)(a)(ii) and 3(2) of the basic Regulation in the form of foregone government revenue which confers a benefit upon the recipient companies.

3.6.3.   Benefit

• (160) In the absence of cooperation from the GOC and the Chinese exporting producers, the Commission had no company-specific information on the basis of which to calculate the amount of subsidy conferred during the review investigation period. However, for the finding of continued subsidisation reached in the current expiry review, the Commission does not consider it necessary to calculate such amounts.

3.6.4.   Specificity

• (161) The schemes are specific within the meaning of Article 4(2)(a) of the basic Regulation given that the legislations pursuant to which the granting authority operated, limited the access to the schemes only to certain enterprises and industries.

• (162) In addition, the lack of cooperation from the GOC did not permit the Commission to reach the conclusion to whether objective criteria of eligibility to certain schemes existed which made them also specific under the Article 4(2)(b) of the basic Regulation.

3.6.5.   Conclusion

• (163) Accordingly, the Commission concludes that there is sufficient evidence showing that some of the direct and indirect tax programmes continued being as countervailable subsidies during the review investigation period.

3.7.   Overall conclusion regarding the continuation of the subsidisation

• (164) Therefore, the Commission concluded that the OCS producers in China continued to benefit from countervailable subsidies during the review investigation period.

3.8.   Development of imports should the measures be repealed

• (165) Further to the finding of the existence of subsidisation during the review investigation period, the Commission investigated the likelihood of continuation of subsidized imports from the country concerned, should the measures be repealed. The following additional elements were analysed: the production capacity and spare capacity in China, the availability of other markets, and the attractiveness of the Union market.

3.8.1.   Production capacity and spare capacity in the PRC

• (166) Given the non-cooperation, production capacity and spare capacity in the PRC were established on the basis of facts available in accordance with Article 28 of the basic Regulation.

• (167) The production capacity of OCS in China gradually increased during the period considered as vertically integrated steel mills invested in the manufacturing of downstream products, such as colour-coated steel products. Total production capacity of OCS rose from 50 million tonnes in 2020 to over 55 million tonnes in 2023 ⁶¹.

• (168) In 2020, eight new colour-coated production lines were added, with a total capacity of 1,59 million tonnes. Five new production lines were put into operation in 2021, with a capacity of 800 000 tonnes. In 2022, an additional capacity of 2,3 million tonnes spread over 11 new production lines was expected to be built in several provinces including Tianjin, Liaoning, Fujian, Guangdong, Hebei, and Fujian ⁶². Some of the projects were however delayed due to a stagnant domestic demand for colour-coated coils. In 2023, eight new production lines were launched with a total capacity of 1,9 million tonnes. The Chinese OCS industry was supposed to further grow also in 2024 with an additional capacity of 2,07 million tonnes planned for eight new production lines ⁶³.

• (169) Production capacity in China continues to grow at a massive scale despite its utilisation rate. The new capacity added during the period considered alone would be able to fully serve the demand on the Union market.

• (170) The additional investments in OCS production lines were carried out despite the capacity utilisation remaining continuously low. During the period considered the capacity utilisation dropped from 68 % in 2020 ⁶⁴ to approximately 50 % in 2022 and 2023 ⁶⁵. Thus, in the review investigation period, the Chinese OCS producers had available a spare capacity that equalled almost seven times the demand for OCS in the Union.

• (171) Consequently, the Commission considered that should the measures be repealed, the Chinese OCS producers would be able to flood the Union market with their product.

3.8.2.   Availability of other markets

• (172) Trade defence measures against Chinese OCS exports are in place in Australia, India, Malaysia, Mexico, Pakistan, and Türkiye.

• (173) In addition, imports of inter alia Chinese OCS are subject to safeguard measures in Canada, India, Morocco, Türkiye, United Kingdom, Zambia, as well as in the countries of the Gulf Cooperation Council and of the Southern African Customs Union.

• (174) Therefore, the Commission considered that, should the current measures be repealed, it is likely that the Chinese OCS producers would redirect exports towards the Union.

3.8.3.   Attractiveness of the Union market

• (175) As described in section 3.5, Chinese producers of OCS possess a vast spare production capacity. The Union market represents an attractive opportunity to serve a market of significant size at prices that considerably exceed the domestic Chinese prices of OCS as well as export prices charged to customers in China’s major export markets, and thus increase the overall capacity utilisation. This remains particularly valid as a number of third countries regulates the access to their market for Chinese coated steel using safeguards and trade defence measures.

Size of the Union market

• (176) According to MySteel Annual Reports 2022 and 2023, total annual volume of exports of colour-coated steel from China remained above 6 million tonnes since 2018, reaching 6,4 million tonnes in 2023.

• (177) The Union with a consumption of 3,9 million tonnes of OCS in the review investigation period thus represents an attractive opportunity to increase exports by more than 60 %.

• (178) Therefore, the Commission considered that the size of the Union market would likely motivate the Chinese producers to reactivate their unused production capacities and increase exports targeting the Union market.

Relation between export prices to third countries and the price level in the Union

• (179) In the review investigation period, the price of the Union producers’ price was by 30 to 60 % higher than the export price charged by the Chinese OCS exporters on the five key export markets adjusted to CIF Union frontier price.

• (180) In addition, the import prices of OCS originating in India and Korea, were also higher the Chinese export prices on the main export markets, namely by 10 to 35 % for Indian origin and 30 to 60 % for Korean origin.

• (181) Therefore, the Commission considered that the price levels prevailing on the Union market represent an incentive for the Chinese exporters of OCS to redirect their exports from third countries to the Union should the measures cease to exist.

3.9.   Conclusion on the likelihood of continuation of subsidisation

• (182) The Commission, on the basis of facts available, conclude that there is sufficient evidence that subsidisation of the OCS industry in the PRC continued during the review investigation period and is likely to continue in the future.

• (183) The subsidisation of the OCS industry allows the Chinese producers to increase their production capacities to a level by far exceeding domestic demand. This enormous capacity remains largely unused due to stagnant domestic demand. The existing spare capacity is sufficient to flood the Union market with subsidised products. The Union market was found to be attractive for the Chinese OCS producers in terms of its size, as well as in terms of prices. Total consumption of OCS in the Union offers an opportunity for the PRC to significantly enlarge its exports. In addition, the prices prevailing on the Union market are considerably higher than the domestic Chinese prices and Chinese export prices to the main export markets. The fact that a number of third markets remain closed or with limited accessibility due to trade defence measures in place contributes to the attractiveness of the Union market. All the above serves as a strong incentive for the Chinese producers to (a) reactivate idle production capacity and/or (b) redirect their domestic sales or sales to third markets to the Union. Such exports to the Union would be likely at prices that are higher than those charged domestically or for exports to third markets while still undercutting the price of the Union producers. Chinese OCS could thus easily push Union producers out of the Union market and gain significant market share.

• (184) The Commision therefore found that the repeal of the countervailing measures is likely to result in a redirection of significant volumes of subsidised imports of the product under review to the Union market. Various subsidy programmes continue to be offered by the GOC to the OCS industry and the Commission determined that the OCS industry benefited from a number of them during the review investigation period.

4. INJURY

4.1.   Union production and Union industry

• (185) During the review investigation period OCS was manufactured by more than 20 known producers in the Union, some of them related to one another. Several of these producers belong to steelmaking groups.

• (186) The total Union production was estimated at 3 981 155 tonnes during the review investigation period on the basis of the questionnaire responses submitted by the sampled Union producers and data submitted the applicant. The Union producers accounting for the total Union production constitute the Union industry within the meaning of Articles 9(1) of the basic Regulation.

4.2.   Union consumption

• (187) The investigation found that a share of the Union industry uses its production for captive use, that is it is often simply transferred (without invoice) and/or delivered at transfer prices within the same company or group of companies for further downstream processing. As in the original investigation (in the recitals 462-463 of Implementing Regulation (EU) 2019/688), it was considered that economic indicators such as production, capacity, capacity utilisation, investments, stocks, employment, productivity, wages and ability to raise capital depend upon the whole activity, whether the production is for captive use or sold on the free market. However, sales volume and sales prices on the Union market, market share, growth, export volume and prices focus on the situation prevailing on the free market (and thus, excluding captive activities). Thus, the injury indicators were corrected for the known captive use and sales in the Union industry. As a result of this calculation, given that, on one hand, the volume used captively was in itself limited (between 5 and 10 % of production) and, on the other, it had developed in line with the volumes sold on the free market, it was not further analysed separately.

• (188) The Union consumption was established on the basis of (i) Eurostat import statistics and (ii) sales volumes of the Union industry in the Union as submitted by the applicant. These sales volumes were cross-checked and updated when necessary as regards sampled Union producers as a result of the verification visits to their premises.

• (189) During the period considered the Union consumption developed as follows:

Table 1

Union consumption (tonnes)

	2020	2021	2022	RIP
Total Union consumption	4 626 291	5 109 594	4 794 716	4 240 902
Index (2020=100)	100	110	104	92
Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.

• (190) During the period considered, the Union consumption decreased by 6 %. The sampled Union producers explained the decrease of Union consumption in the review investigation period by to the lower economic performance of Germany and accompanying lower demand of OCS.

4.3.   Imports from China

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

• (191) The Commission established the volume of imports and prices on the basis of import statistics at TARIC level using information collected on the grounds of Article 14(6) of the basic Regulation.

• (192) Over the period considered imports from China into the Union developed as follows:

Table 2

Import quantity (tonnes) and market share

	2020	2021	2022	RIP
Quantity of imports from China (tonnes)	4 331	1 083	2 432	2 554
Index (2020=100)	100	25	56	59
Market share (%)	0,09  %	0,02  %	0,05  %	0,06  %
Index (2020=100)	100	22	53	63
Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.	Source: Verified questionnaire replies and Eurostat.

• (193) The volume of imports from China was negligible over the whole period considered.

4.3.2.   Prices of the imports from China and price undercutting

• (194) Over the period considered the price of imports from China into the Union developed as follows:

Table 3

Import prices (EUR/ tonne)

	2020	2021	2022	RIP
China	594	1 639	1 675	1 167
Index (2020=100)	100	276	282	197
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (195) Over the period considered the prices of Chinese imports increased by 97 %, however they applied all the time to minimal volumes of imports. Those minimal volumes of imports cannot be considered representative and they do not allow for any meaningful price undercutting calculation.

4.4.   Imports from third countries other than China

• (196) The imports of organic coated steel from third countries other than China were mainly from India, South Korea, United Kingdom, Vietnam, Türkiye, Taiwan, North Macedonia and Russia.

• (197) The volume of imports into the Union as well as the market share and price trends for imports of organic coated steel from other third countries developed as follows:

Table 4

Imports from third countries

Country		2020	2021	2022	RIP
India	Volume (tonnes)	89 242	152 445	266 726	211 683
	Index (2020=100)	100	171	299	237
	Market share	1,9  %	3,0  %	5,6  %	5,0  %
	Average price (EUR/tonne)	759	1 109	1 389	1 038
	Index (2020=100)	100	146	183	137
Republic of Korea	Volume (tonnes)	95 319	128 150	204 542	197 508
	Index (2020=100)	100	134	215	207
	Market share	2,1  %	2,5  %	4,3  %	4,7  %
	Average price (EUR/tonne)	863	1 113	1 659	1 230
	Index (2020=100)	100	129	192	143
United Kingdom66	Volume (tonnes)	93 266	90 602	81 935	107 261
	Index (2020=100)	100	97	88	115
	Market share	2,0  %	1,8  %	1,7  %	2,5  %
	Average price (EUR/tonne)	1 787	1 647	2 040	1 712
	Index (2020=100)	100	92	114	96
Other third countries	Volume (tonnes)	198 850	256 840	310 654	181 455
	Index (2020=100)	100	129	156	91
	Market share	4,3  %	5,0  %	6,5  %	4,3  %
	Average price (EUR/tonne)	747	1 044	1 435	1 102
	Index (2020=100)	100	140	192	148
Total of all third countries except China	Volume (tonnes)	476 677	628 037	863 857	697 907
	Index (2020=100)	100	132	181	146
	Market share	10,3  %	12,3  %	18,0  %	16,5  %
	Average price (EUR/tonne)	779	1 161	1 531	1 212
	Index (2020=100)	100	149	197	156
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (198) Over the period considered, the volume of imports from third countries increased to reach a market share of 16,5 %. Most of these imports were from India and Korea, followed by United Kingdom, Vietnam, Türkiye and Taiwan. Imports from India and the Republic of Korea increased significantly and their combined market share almost doubled to reach 9,7 % in the review investigation period. Average prices of imports from India and the Republic of Korea were below the Union industry’s sales prices end they exerted price pressure on the prices of OCS prevailing on the Union market.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (199) Pursuant to Article 8(4) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic factors and indices having a bearing on the state of the Union industry during the period considered.

• (200) As mentioned in recital 16, sampling was used for the assessment of the economic situation of the Union industry.

• (201) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the verified questionnaire reply of the applicant, cross-checked with the verified questionnaire replies of the sampled Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers (see recital 20). Both sets of data were found to be representative of the economic situation of the Union industry.

• (202) The macroeconomic indicators (production, production capacity, capacity utilisation, sales volume, market share, employment, productivity, growth, magnitude of subsidisation margins and recovery from the effects of past subsidisation) were assessed at the level of the whole Union industry. The assessment was based on the information provided by the applicant, cross-checked with the verified questionnaire replies of the sampled Union producers.

• (203) The analysis of microeconomic indicators (stocks, sale prices, profitability, cash flow, investments, return on investments, ability to raise capital, and wages) was carried out at the level of the sampled Union producers. The assessment was based on their information which was duly verified during an on-spot verification visit.

4.5.2.   Macroeconomic indicators

4.5.2.1.   Production, production capacity and capacity utilisation

• (204) Over the period considered production, production capacity and capacity utilisation of the Union industry developed as follows:

Table 5

Production, production capacity and capacity utilisation

	2020	2021	2022	RIP
Production volume (tonnes)	4 721 729	5 251 800	4 396 916	3 981 155
Index (2020=100)	100	111	93	84
Production capacity (tonnes)	6 311 442	6 335 399	6 492 638	6 420 797
Index (2020=100)	100	100	103	102
Capacity utilisation	74,8  %	82,9  %	67,7  %	62,0  %
Index (2020=100)	100	111	91	83
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (205) The production volume first increased in 2021, as the construction sector performed well during the Covid-19 pandemics in 2020 and 2021. The production capacity increased as well. Over the period considered there was, however, an overall decrease in production volume (- 16 %) and the capacity utilisation (- 17 %) as, since 2022, the Union economy faced decreased economic performance, rising inflation and increased cost of production (increasing wages and increasing prices for building materials).

4.5.2.2.   Sales volume and market share in the Union

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

Table 6

Sales volume (tonnes) and market share

	2020	2021	2022	RIP
Total sales volume on the Union market	4 145 282	4 480 473	3 928 427	3 540 441
Index (2020=100)	100	108	95	85
Market share	89,6  %	87,7  %	81,9  %	83,5  %
Index (2020=100)	100	98	91	93
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (207) The sales by the Union industry on the Union market decreased by 15 % during the period considered following the economic trend described in recitals 190 and 205.

• (208) As shown in table 6, the market share of the Union industry decreased during the period considered from 89,6 % to 83,5 %.

4.5.2.3.   Growth

• (209) The Union industry managed to benefit temporarily from growth on the Union market with regard to the higher performance of the construction sector and higher demand for steel products in 2020 and 2021. The Union industry kept significant market shares during the whole period considered. However, following the economic challenges described in recital 205 the future ability for growth is put at risk.

4.5.2.4.   Employment and productivity

• (210) Over the period considered employment level and productivity within the Union industry developed as follows:

Table 7

Employment and productivity

	2020	2021	2022	RIP
Number of employees	7 257	7 576	7 341	6 801
Index (2020=100)	100	104	101	94
Productivity (tonnes/FTE)	651	693	599	585
Index (2020=100)	100	107	92	90
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (211) Both employment and productivity of the Union producers’ workforce, measured as output (tonnes) per person employed per year, decreased during the period considered. Those decreasing trends reflect the overall decrease in production and sales volume.

4.5.2.5.   Magnitude of subsidisation and recovery from past subsidisation

• (212) Subsidisation continued during the review investigation period at a significant level, as explained under Section 3 above. It is noted that Chinese producers undercut Union industry’s sales prices to a significant extent and that the Union industry is still suffering injury.

• (213) Since the volumes of the subsidised imports from China were much lower than during the original investigation period, the Commission concluded that the impact of the magnitude of the subsidisation margin on the Union industry was significantly less pronounced than in the original investigation.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

• (214) 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 and cost of production in the Union (EUR/tonnes)

	2020	2021	2022	RIP
Average unit sales price in the Union on the total market	891	1 239	1 668	1 241
Index (2020=100)	100	139	187	139
Unit cost of production	897	1 117	1 447	1 365
Index (2020=100)	100	124	161	152
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (215) Over the period considered, the Union industry’s cost of production increased by 52 %. This increase in cost was particularly strong in 2021 and 2022, due to Russia’s unjustified and unprovoked war of aggression against Ukraine which caused energy prices to reach unprecedently high levels, rise in certain other raw material prices, rising inflation and increasing wages. In addition, the significant decrease in Union demand in 2022 and the review investigation period resulted in significantly lower production volumes which in addition added to the fixed unit costs. In 2023 this trend reversed slightly and cost of production went down by 6 % compared to 2022.

• (216) However, whereas the Union industry had been able in 2021 and 2022 to increase its sales prices even more than by passing on these additional costs, this was not anymore possible in 2023. The decrease in Union demand in the review investigation period, in conjunction with the low prices of imports from in particular India and the Republic of Korea, caused the Union industry to sell below its cost of production in review investigation period.

4.5.3.2.   Labour costs

• (217) 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	RIP
Average labour costs per employee (EUR)	86 061	92 649	92 432	96 544
Index (2020=100)	100	108	107	112
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (218) The average wage levels increased slightly over the period considered (+ 12 %), but less than the unit cost of production.

4.5.3.3.   Inventories

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

Table 10

Inventories

	2020	2021	2022	RIP
Closing stocks (tonnes)	72 564	70 446	60 451	64 790
Index (2020=100)	100	97	83	89
Closing stocks as a percentage of production	1,5  %	1,4  %	1,4  %	1,6  %
Index (2020=100)	100	87	102	188
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (220) The Union producers decreased their stock in the period considered, in line with the decreases in production and sales. This indicator, however, is not considered to be very relevant to assess the economic situation of the Union producers. OCS is mostly produced on the basis of orders. In any event, the stocks represented less than 2 % of the total sales during the review investigation period.

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

• (221) 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	RIP
Profitability of sales in the Union to unrelated customers (% of sales turnover)	-0,6  %	13,4  %	16,2  %	-5,7  %
Index (2020=100)	- 100	2 322	2 808	- 993
Cash flow (EUR)	54 308 572	176 906 495	317 026 060	-28 263 914
Index (2020=100)	100	326	584	-52
Investments (EUR)	18 760 581	24 443 392	23 277 582	30 845 548
Index (2020=100)	100	130	124	164
Return on investments	-0,5  %	6,9  %	9,9  %	-2,4  %
Index (2020=100)	- 100	1 470	2 160	- 523
Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.	Source: Verified questionnaire replies of the sampled Union producers.

• (222) 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.

• (223) During the period considered the Union industry was profitable in 2021 and 2022. Overall, the construction sector performed well during the Covid-19 pandemics in 2020 and the aftermath in 2021 and 2022. Low interest rates, short lockdowns in construction section, increased investments and works on property renovations stimulated demand for construction products. As a result, the Union industry managed to increase its sales and production volume as well as sales prices and reached significant profit margins, all in the years following the imposition of the original measures. However, after consumption had started to slow down in 2022 and that fall continued in 2023, the Union industry’s profitability became negative and the Union industry incurred a significant loss of 5,7 % in the review investigation period.

• (224) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash followed the development of the overall profitability of the Union industry.

• (225) The return on investments is the profit in percentage of the net book value of investments. During the period considered the Union industry, highly capital-intensive, made regular investments for the optimisation, and upgrading of the existing production machinery. In addition, significant investments were made in order to comply with legal requirements for energy-efficiency, environment protection and increased work safety. Depending on the company, there were investments aimed at costs reduction, energy optimisation and/or also at revamping facilities that had been negatively affected by the lower capacity utilisation observed during the original investigation period.

• (226) The return on investments during the period considered followed closely the profitability trend. Since the imposition of measures the ability to raise capital has improved.

4.6.   Conclusion on injury

• (227) The investigation found that the Union industry as a whole showed recovery from past subsidy during 2021 and 2022. This recovery, however, was due to exceptional circumstances, in particular the boom in the construction sector caused by the Covid-19 pandemic. Once the market situation went back to normal, there was a reverse of this recovery.

• (228) This is particularly evident in the Union industry’s profitability, as, given its inability to increase prices in line with rising costs, the Union industry went into losses in the review investigation period. The injury is also visible in other important indicators, such as a significant loss of production and sales volumes and also of market share.

• (229) Based on the above, the Commission concluded that the Union industry suffered material injury within the meaning of Article 8(1) of the basic Regulation during the review investigation period.

5. CAUSATION

• (230) During the period considered, the Union industry lost significant sales volumes on the Union market, as its Union sales decreased by 15 %. As consumption dropped by 6 %, the Union industry’s market share also decreased significantly, by 6,1 percentage points from 89,6 % to 83,5 %.

• (231) Chinese imports did not play a role in the Union industry’s injury. As indicated at recital 195, the level of imports from China was negligible throughout the period considered. Imports from other countries did play a role: they held a market share of 10,3 % in 2020 and in the review investigation period, their share of the Union market had increased to 16,5 %. Moreover, prices from the two most important sources of imports which each had a market share of around 5 % in the review investigation period, India and the Republic of Korea, dragged down prices of the Union industry. Their low prices made it impossible for the Union industry to reflect their full cost of production in its sales prices in the review investigation period.

• (232) The Union industry had been confronted with a strong increase in prices of energy and key input materials following the start of the Russian war of aggression against Ukraine. The Union industry could initially cope with that, taking advantage of the booming construction market in the post-Covid-19 pandemic years 2021 and 2022 and therefore reflect these costs in its selling prices. However, in 2023 this was not anymore possible.

• (233) The Commission therefore concluded that Chinese imports did not contribute to the material injury to the Union industry, but that other factors, in particular the increase in cost of production, the drop in consumption and the increase of imports from other countries, in particular India and the Republic of Korea, caused that injury.

• (234) Therefore, the Commission decided to further assess, in accordance with Article 18 of the basic Regulation, whether there would be a likelihood of recurrence of injury originally caused by the subsidised imports from the PRC if the measures against such imports were allowed to lapse.

6. LIKELIHOOD OF RECURRENCE OF INJURY

• (235) As shown in section 4.5 above, the Union industry has recovered from the past injury caused by the Chinese dumped imports, but found itself in a material injury situation in the review investigation period cause by factors described in recitals 215 and 216. Nonetheless, this section will examine whether the precarious situation of the Union industry will further deteriorate leading to recurrence of material injury should the measure lapse.

• (236) Should the measures be repealed, the volume of imports from China is expected to increase dramatically. It is recalled that imports during the original investigation period amounted to more than 702 000 tonnes, while they amounted to 2 554 tonnes during the review investigation period.

• (237) China’s overcapacity in steel production is well established. The applicant submitted data gathered by the Organisation for Economic Co-operation and Development (OECD), which showed that the nominal crude steelmaking capacity of China in 2022 was 1 149 million tonnes ⁶⁷, amounting in 2022 to 47 % of the worldwide steel capacity. In comparison, the Union steelmaking capacity amounted to 213 million tonnes. According to a subsequent OECD report ⁶⁸, the nominal crude steelmaking capacity of China in 2023 decreased slightly to 1 141 million tonnes but maintained 47 % of the worldwide steel capacity and was projected to increase the capacities further.

• (238) The complainant submitted data from GMK Center ⁶⁹, demonstrating that China’s steel production has been gradually increasing over the past 10 years. In 2021, it peaked at 1 033 billion tonnes and decreased in 2022 to increase again in 2023 reaching 1 019 billion tonnes compared to 1 013 billion tonnes in 2022 ⁷⁰. The data is confirmed by the World Steel Association’s crude steel production data ⁷¹.

• (239) According to the OECD ⁷², steelmaking capacity in China exceeded the domestic demand for steel by 191 million tonnes in 2022. According to a Chinese source on OCS production, in 2023, the OCS production capacity was 55,26 million tonnes, and the production reached 27,63 million tonnes, showing a year-on-year increase of 7,46 % ⁷³. Furthermore, from January to November 2023, Chinese’s total exports of OCS totalled 5,98 million tonnes, and was expected to be around 6,4 million tonnes for 2023.

• (240) However, as important as export markets are for Chinese industry, China faces more and more difficulties accessing them. Between 2018 and 2025 countries such as USA, Canada, Australia, the United Kingdom, Malaysia, Pakistan and Thailand imposed trade defence measures that affect OCS originating in China. As to the USA, since April 2025, steel (OCS included) originating in China is subject to a 125 % tariff.

• (241) The Union is the largest OCS market after the Asian and the North/Central America ones.

• (242) The Chinese database shows that in the recent past China exported significant volumes to countries outside the Union at low prices. In 2020-2023 Chinese FOB prices to the Union were between 27 % and 63 % higher than for instance to Türkiye (the former) or Thailand (the latter), China’s main export market for this product. During the review investigation period, the volumes exported to countries outside the Union were bigger than the total Union industry production and the apparent consumption in the Union. Because of the attractiveness of the Union market in terms of pricing, openness (there are no customs duties for this product) and increased apparent consumption, it is considered that if the measures are terminated, Chinese exporters are likely to re-direct significant volumes of OCS to the more lucrative Union market. The fact that the Union recently adopted safeguards on certain steel products, including OCS, does not alter this conclusion. The import volumes under the tariff rate quotas are set at levels which may allow China to export significant amounts of OCS.

• (243) The market for OCS products is very price competitive as the competition mainly takes place on the basis of prices. The potential pressure on the Union industry’s prices is further exacerbated by the fact that, according to the request, Chinese sales usually take place for relatively big quantities. If cheap and subsidised imports are sold in significant quantities on the Union market, the Union producers will lose large sales volumes. The ability to raise capital and to invest could be hindered if the profitability of Union producers drops further or becomes negative.

6.1.   Conclusion

• (244) In view of the above, it is concluded that the absence of measures would in all likelihood result in a significant increase of subsidised imports from China at injurious prices, and therefore further aggravate the injurious situation of the Union industry.

7. UNION INTEREST

• (245) In accordance with Article 31 of the basic Regulation, the Commission examined whether maintaining the existing countervailing measures would be against the interest of the Union as whole. 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

• (246) The investigation showed that should the measures expire, this would likely have a significant negative effect on the Union industry. The Union industry’s situation would quickly deteriorate in terms of lower sales volumes and sales prices resulting in a strong decrease in profitability. The continuation of measures would allow the Union industry to further exploiting its potential on a Union market that is a level-playing field.

• (247) Therefore, maintaining the countervailing measures in force is in the interest of the Union industry.

7.2.   Interest of importers

• (248) As mentioned in recital 15 above, ten known importers were contacted in this investigation and invited to cooperate. None came forward or cooperated in any way in the investigation.

• (249) It is recalled that in the original investigation it was found that, given the importers’ profits and sources of supply, any negative impact of the imposition of measures on importers, if any, would not be disproportionate.

• (250) In the current investigation there is no evidence on file suggesting the opposite, and it can thus accordingly be confirmed that the measures currently in force had no substantial negative effect on the financial situation of importers and that the continuation of the measures would not unduly affect them.

7.3.   Interest of users

• (251) 59 known users were contacted in this investigation and invited to cooperate. No user came forward or cooperated in any way in the investigation.

• (252) It is recalled that in the original investigation ten users submitted questionnaire replies. At that time it was found that, given the users’ profits and sources of supply, the impact of the imposition of measures on users, if any, would not be disproportionate.

• (253) In the current investigation there is no evidence on file suggesting that the measures in force affected them in any negative way. In fact the applicant submitted evidence that key users experienced improvements in profitability during the period under review. According to the request, the measures in place do not have a sizeable impact on users and consumers as OCS represents a negligible part of the cost of downstream products (e.g. 0,42 EUR of the cost of producing a washing machine or 0,4 % of the investment of an empty factory building).

• (254) On that basis it is confirmed that the measures currently in force had no substantial negative effect on the financial situation of users and that the continuation of the measures would not unduly affect them.

7.4.   Conclusion

• (255) Therefore, the Commission concluded that there are no compelling reasons of Union interest against the maintenance of the definitive countervailing measures on imports of organic coated steel originating in China.

8. COUNTERVAILING MEASURES

• (256) On the basis of the conclusions reached by the Commission on recurrence of subsidy, recurrence of injury and Union interest, the countervailing measures on organic coated steel from China should be maintained.

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

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

• (259) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 23(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

• (260) The individual company countervailing duty rates specified in this Regulation are exclusively applicable to imports of the product under review originating in China and produced by the named legal entities. Imports of the organic coated steel produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other imports originating in People’s Republic of China’. They should not be subject to any of the individual countervailing duty rates.

• (261) A company may request the application of these individual countervailing duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.

• (262) In view of Article 109 of Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council ⁷⁴ when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

• (263) The measures provided for in this regulation are in accordance with the opinion of the Committee established by Article 15(1) Regulation (EU) 2016/1036,

HAS ADOPTED THIS REGULATION:

Article 1

Company	Duty (%)	TARIC Additional Code
Union Steel China	13,7	B311
Zhangjiagang Panhua Steel Strip Co., Ltd, Chongqing Wanda Steel Strip Co., Ltd, and Zhangjiagang Free Trade Zone Jiaxinda International Trade Co., Ltd.	29,7	B312
Zhejiang Huadong Light Steel Building Material Co. Ltd and Hangzhou P.R.P.T. Metal Material Company, Ltd.	23,8	B313
Angang Steel Company Limited	26,8	B314
Anyang Iron Steel Co., Ltd.	26,8	B315
Baoshan Iron & Steel Co., Ltd.	26,8	B316
Baoutou City Jialong Metal Works Co.,Ltd.	26,8	B317
Changshu Everbright Material Technology Co.,Ltd.	26,8	B318
Changzhou Changsong Metal Composite Material Co.,Ltd.	26,8	B319
Cibao Modern Steel Sheet Jiangsu Co., Ltd.	26,8	B320
Inner Mongolia Baotou Steel Union Co.,Ltd.	26,8	B321
Jiangyin Ninesky Technology Co.,Ltd.	26,8	B322
Jiangyin Zhongjiang Prepainted Steel Mfg Co.,Ltd.	26,8	B323
Jigang Group Co., Ltd.	26,8	B324
Maanshan Iron&Steel Company Limited	26,8	B325
Qingdao Hangang Color Coated Sheet Co., Ltd.	26,8	B326
Shandong Guanzhou Co., Ltd.	26,8	B327
Shenzen Sino Master Steel Sheet Co.,Ltd.	26,8	B328
Tangshan Iron And Steel Group Co.,Ltd.	26,8	B329
Tianjin Xinyu Color Plate Co.,Ltd.	26,8	B330
Wuhan Iron And Steel Company Limited	26,8	B331
Wuxi Zhongcai New Materials Co.,Ltd.	26,8	B332
Xinyu Iron And Steel Co.,Ltd.	26,8	B333
Zhejiang Tiannu Color Steel Co., Ltd.	26,8	B334
All other imports originating in the People’s Republic of China	44,7	B999

In cases where the countervailing duty has been subtracted from the anti-dumping duty for certain exporting producers, refund requests under Article 21 of Regulation (EU) 2016/1037 shall also trigger the assessment of the dumping margin for that exporting producer prevailing during the refund investigation period. The amount to be reimbursed to the applicant for refund cannot exceed the difference between the duty collected and the combined countervailing and anti-dumping duty established in the refund investigation.

Article 2

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

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

Done at Brussels, 24 July 2025.

For the Commission

The President

Ursula VON DER LEYEN