Commission Implementing Regulation (EU) 2025/1508 of 24 July 2025 imposing a definitive anti-dumping duty on imports of certain organic coated steel products originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

Image omitted; see official source	Official Journal of the European Union	EN L series
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	2025/1508	25.7.2025

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ¹ (‘the basic Regulation’), and in particular Article 9(4) thereof,

Whereas:

1. PROCEDURE

1.1.   Previous investigations and measures in force

• (1) The Council, by Implementing Regulation (EU) No 214/2013 ², imposed definitive anti-dumping duties on imports of certain organic coated steel products originating in the People’s Republic of China (‘China’, ‘the PRC’ or ‘the country concerned’) (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

• (2) By Implementing Regulation (EU) No 215/2013 ³, the Council imposed, in parallel, countervailing duties on imports of certain organic coated steel products originating in China. The countervailing duties currently in force range from 13,7 % to 44,7 %.

• (3) Following an expiry review pursuant to Article 11(2) of the basic Regulation, on 2 May 2019, the Commission extended the definitive anti-dumping measures on imports of certain organic coated steel products originating in the PRC by Regulation (EU) No 2019/687 ⁴ (the ‘previous expiry review’).The anti-dumping duties currently in force range from 0 % to 26,1 %.

• (4) The level of the combined anti-dumping and anti-subsidy duties ranges from 13,7 % to 58,3 %.

1.2.   Request for an expiry review

• (5) Following the publication of a Notice of impending expiry of the definitive anti-dumping measures in force ⁵, the Commission received a request for the initiation of an expiry review of these measures pursuant to Article 11(2) of the basic Regulation (‘the request’).

• (6) The request was submitted on 2 February 2024 by the European Steel Association (‘EUROFER’ or ‘the applicant’) on behalf of the Union industry of organic coated steel products in the sense of Article 5(4) of the basic Regulation. The request was based on the grounds that the expiry of the anti-dumping measures would be likely to result in continuation of dumping and recurrence of injury to the Union industry.

1.3.   Initiation of an expiry review

• (7) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 30 April 2024 the Commission initiated an expiry review with regard to imports into the Union of certain organic coated steel products originating in the People’s Republic of China on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ⁶ (‘the Notice of Initiation’).

1.4.   Review investigation period and period considered

• (8) The investigation of a continuation or recurrence of dumping covered the period from 1 January 2023 to 31 December 2023 (‘the review investigation period’ or ‘RIP’). The examination of the trends relevant for the assessment of the likelihood of continuation or recurrence of injury covered the period from 1 January 2020 to the end of the review investigation period (‘the period considered’).

1.5.   Interested parties

• (9) In the Notice of Initiation, the Commission invited interested parties to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the applicant, the known Union producers, the known unrelated importers in the Union, unrelated users in the Union known to be concerned, the known producers in the PRC and the authorities of the PRC, about the initiation of the expiry and invited them to participate.

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

1.6.   Sampling

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

1.6.1.   Sampling of Union producers

• (12) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers, in accordance with Article 17(1) of the basic Regulation.

• (13) Prior to the initiation, 14 Union producers had provided the information requested for the selection of the sample and expressed their willingness to cooperate with the Commission. On that basis, the Commission had provisionally selected a sample of three producers, which were found to be representative of the Union industry in terms of volume of production and sales of the like product in the Union. The sampled Union producers accounted for 28 % of the estimated total production of the Union industry and for 26 % of the total sales volume of the Union industry to unrelated customers in the Union during the review investigation period.

• (14) The Commission invited interested parties to comment on the provisional sample. No comments were received, and the provisional sample was confirmed. The sample was considered representative for the Union industry.

1.6.2.   Sampling of importers

• (15) The request to initiate the expiry review identified ten unrelated importers which were invited to provide sampling information. None of them came forward.

1.6.3.   Sampling of exporting producers in the PRC

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

• (17) No exporting producers returned the sampling form. Subsequently, on 2 August 2024, the Commission informed the Government of China (‘GOC’) that there was no cooperation by exporting producers in the PRC and thus it would apply the provisions of Article 18 of the basic Regulation with regard to the findings of continuation or recurrence of dumping.

1.7.   Questionnaires and verification visits

• (18) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the GOC. The Commission, however, did not receive a questionnaire reply from the GOC on this matter. Therefore, on 2 August 2024 the Commission informed the GOC of its intention to apply the provisions of Article 18 of the basic Regulation with regard to existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation.

• (19) The Commission sent questionnaires to the three sampled Union producers and Eurofer. Questionnaires for the Union producers, unrelated importers, users, and the exporting producers in the PRC were also made available online ⁷ on the day of initiation of the investigation.

• (20) Replies to the questionnaires were received from the three sampled Union producers and Eurofer.

• (21) The Commission sought and verified all the information it deemed necessary for a determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest. Verification visits were carried out at the premises of the following interested parties:

• (a) Union producers:

• — ArcelorMittal Belgium, Belgium

• — ThyssenKrupp, Germany

• — Tata Steel Maubeuge SA, France

• (b) Association of Union producers:

• — EUROFER, Belgium

1.8.   Subsequent procedure

• (22) On 6 June 2025, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

• (23) No parties made any comments on the final disclosure. No parties requested a hearing.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under review

• (24) The product under review is the same as in in the original investigation and previous expiry review namely certain organic coated steel products (‘OCS’) i.e. flat-rolled products of non-alloy and alloy steel (not including stainless steel) which are painted, varnished or coated with plastics on at least one side, excluding so-called ‘sandwich panels’ of a kind used for building applications and consisting of two outer metal sheets with a stabilizing core of insulation material sandwiched between them, excluding those products with a final coating of zinc-dust (a zinc-rich paint, containing by weight 70 % or more of zinc), and excluding those products with a substrate with a metallic coating of chromium or tin, currently falling under CN codes ex 7210 70 80 , ex 7212 40 80 , ex 7225 99 00 , and ex 7226 99 70 (TARIC codes 7210 70 80 11, 7210 70 80 91, 7212 40 80 01, 7212 40 80 21, 7212 40 80 82, 7225 99 00 11, 7225 99 00 91, 7226 99 70 11 and 7226 99 70 91; ‘the product under review’ or ‘OCS’).

• (25) The product under review is obtained by applying an organic coating to flat-rolled steel products. The organic coating provides protection, and aesthetic and functional properties to steel products.

• (26) OCS is mainly used in the construction sector and for further processing in products used in construction. Other applications include home appliances.

2.2.   Product concerned

• (27) The product concerned by this investigation is the product under review originating in the People’s Republic of China (‘the product concerned’).

2.3.   Like product

• (28) As established in the original investigation and confirmed in the previous expiry review, this expiry review investigation re-confirmed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses:

• — the product concerned when exported to the Union;

• — the product under review produced and sold on the domestic market of the PRC;

• — the product under review produced and sold by the exporting producers to the rest of the world; and

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

These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

3. LIKELIHOOD OF RECURRENCE OF DUMPING

3.1.   Preliminary remarks

• (29) During the review investigation period, imports of OCS from the PRC virtually disappeared. According to Eurostat, imports of OCS from the PRC accounted for about 0,06 % of the Union market in the review investigation period compared to 13,6 % market share during the original investigation and 0,1 % during the previous expiry review. In absolute terms the imports dropped from 702 452 tonnes in the original investigation to 6 338 tonnes in the previous expiry review and further to 2 554 tonnes in the review investigation period of this expiry review. Consequently, the Commission concluded that the imports in the review investigation period were not sufficiently representative to make valid conclusions concerning the continuation of dumping.

• (30) Thus, the Commission investigated, in accordance with Article 11(2) of the basic Regulation, the likelihood of recurrence of dumping, should the measures be repealed. The following elements were analysed: the production capacity and spare capacity in the PRC, relationship between prices in the Union and the PRC; relationship between export prices to third countries and normal value in the PRC; relation between export prices to third countries and the price level in the Union; and the attractiveness of the Union market.

• (31) As mentioned in recital (17), none of the exporters/producers from the PRC cooperated in the investigation. Therefore, the Commission informed the authorities of the PRC that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.

• (32) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the continuation of or the likelihood of recurrence of dumping were based on facts available, in particular trade statistics collected by the Eurostat ⁸ and the Global Trade Atlas ⁹, information on freight cost from the International Transport and Insurance Costs of Merchandise Trade ¹⁰ data by OECD and the Doing Business ¹¹ report by the World Bank, information on the factors of production and their consumption from a representative Union producer, information on the development of the Chinese market for OCS from the MySteel Annual Report ¹².

• (33) To analyse the likelihood of recurrence of dumping, in particular for the purpose of price comparisons, the Commission first determined the normal value as detailed in section 3.2 below.

3.2.   Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation for the imports of OCS originating in the PRC

• (34) Given the sufficient evidence available at the initiation of the investigation tending to show, with regard to the PRC, the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission initiated the investigation on the basis of Article 2(6a) of the basic Regulation.

• (35) In order to obtain information, it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2. of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. Subsequently, on 2 August 2024, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC.

• (36) In point 5.3.2. of the Notice of Initiation, the Commission also specified that, in view of the evidence available, Mexico was an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. The Commission further stated that it would examine other possibly appropriate countries in accordance with the criteria set out in first indent of Article 2(6a) of the basic Regulation.

• (37) On 19 March 2025, the Commission informed the interested parties by a note on the relevant sources it intended to use for the determination of the normal value (‘the Note’). In that Note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of OCS. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified Mexico as an appropriate representative country. The Commission received comments on the Note from the applicant. The applicant expressed its support to the Commissions choice of a representative country.

3.2.1.   Normal value

• (38) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

• (39) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’ (hereinafter ‘administrative, selling and general costs’ is referred to as ‘SG&A’).

• (40) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

3.2.2.   Existence of significant distortions

• (41) The Commission examined the evidence on the file to decide whether significant distortions within the meaning of Article 2(6a)(b) of the basic Regulation exist in the PRC, rendering the use of domestic prices and costs in that country inappropriate. That analysis covered the following evidentiary elements on the various criteria relevant to establish the existence of significant distortions.

• (42) First, the evidence contained in the request included the following elements pointing to the existence of significant distortions.

• (43) The applicant argued that the Chinese market of the product under review is served by enterprises which operate under the ownership, control, or policy supervision or guidance of the Chinese authorities. In this regard, the applicant highlighted the existence of significant state ownership within the Chinese steel sector, particularly among large OCS producers such as the Baowu Group, the Ansteel Group and the Shandong Steel Group, all of which are State Owned Enterprises (‘SOEs’).

• (44) The applicant also argued that the Chinese State presence in OCS producers allows the State to interfere with prices and costs. The applicant submitted that this is the case for both SOEs and private companies. In fact, the applicant noted the constitutional obligation, according to Article 33 of the PRC Constitution, that ‘[p]rimary-level Party organisations in non-public sector entities shall implement the Party’s principles and policies, guide and oversee their enterprises’ observance of state laws and regulations’. Moreover, Article 19 of the PRC Company law highlights the duty for companies ‘to provide the necessary conditions for the activities of the Party’ and the requirement to designate within the company, ‘an organisation of the Communist Party of China […] to carry out the activities of the Party’.

• (45) Regarding OCS producers specifically, the request noted the encouragement of President Xi Jinping addressed to the Baowu Steel Group, to continue collaborating with the state-owned economy ¹³. Additionally, it remarked the statement of the chairman of the China Society for Metals, who ‘reviewed the relevant important instructions of the 20th National Congress of the Communist Party of China’ in particular with regard to the need ‘to implement comprehensive policies in terms of optimizing industrial structure, controlling capacity expansion, promoting industrial concentration, improving quality and efficiency’ ¹⁴. Finally, considering that OCS is mainly used in construction, the applicant pointed out the importance given to construction in rural and urban places within the China’s 14^th Five-Year Plan for National Economic and Social Development.

• (46) Furthermore, the applicant indicated that the Chinese authorities maintain public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces. In this regard, the applicant noted that the steel sector in China is subject to numerous national and municipal plans, in particular regarding the optimization and restructuring of the steel industry and the modernization on the level of the supply chain. Besides, the China Iron and Steel Association, pursuant to Article 3 of its Articles of Association, ‘adheres to the overall leadership of the Communist Party of China’ and ‘accepts the business guidance, supervision and management by the entities in charge of registration and management, by entities in charge of party building, as well as by the relevant administrative departments in charge of industry management’.

• (47) The applicant also underlined the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws. This is, according to the applicant, apparent from the influence of the GOC in insolvency proceedings. Given the subordination of the courts to the GOC, many insolvent firms benefit from restructuring plans stemming from de facto governmental guarantees to SOEs. In addition, the applicant referred to lack of transparency of rules on land provision and acquisition.

• (48) Moreover, the request underlined the wage costs being distorted in China and specifically in the OCS sector. Such distortions were already recalled in the first expiry review and the applicant found no evidence that the OCS sector is shielded from the wage costs’ distortions.

• (49) Second, in recent investigations concerning the steel sector in the PRC ¹⁵, the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present. In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles ¹⁶. In particular, the Commission concluded that in the steel sector, not only does a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation ¹⁷ but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation ¹⁸. The Commission found further that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs further have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being driven to sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces ¹⁹. Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC ²⁰. In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation ²¹, as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC ²².

• (50) Third, in the most recent expiry review concerning the product under review ²³ the Commission concluded that significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation were present. No major structural changes in the PRC, capable of affecting that conclusion, are known to the Commission.

• (51) Fourth, additional evidence available in the Commission Staff Working Document on Significant Distortions in the Economy of China ²⁴, prepared by the Commission pursuant to Article 2(6a)(c) of the basic Regulation, pointed to the existence of significant distortions also during the review investigation period.

• (52) Fifth, no evidence or arguments to the contrary have been adduced by the GOC or the exporting producers in the present investigation.

• (53) In view of the above, the evidence available showed that prices or costs of the product under review, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation as shown by the actual or potential impact of one or more of the relevant elements listed therein. On that basis, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation.

3.2.3.   Representative country

3.2.3.1.   General remarks

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

• — A level of economic development similar to the PRC. For this purpose, the Commission uses countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank ²⁵;

• — Production of the product under review in that country ²⁶;

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

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

• (55) As explained in recital (37), the Commission issued a Note for the file on the sources for the determination of the normal value. This Note described the facts and evidence underlying the relevant criteria. In the Note, the Commission informed interested parties of its intention to consider Mexico as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

3.2.3.2.   A level of economic development similar to the PRC

• (56) Given the lack of cooperation, the Commission confirmed that Mexico, which was known to the Commission as a possible representative country at initiation, was indeed a country with a similar level of economic development as the PRC according to the World Bank, i.e. it was classified by the World Bank as an ‘upper-middle income’ country on a gross national income basis where production of the product under review was known to take place.

• (57) In its comments on the Note, the applicant expressed its support to the Commission’s intention to consider Mexico as an appropriate representative country.

3.2.3.3.   Production of the product under review in that country

• (58) In the Note, the Commission explained that the product under review was produced in Mexico in significant quantities and through a similar production process.

• (59) The Commission did not receive any comments concerning the production of OCS in Mexico.

3.2.3.4.   Availability of relevant public data in the representative country

• (60) In the Note, the Commission indicated that it found readily available financial information for an OCS producer in Mexico, covering the financial year ending in December 2023. Undistorted cost of the main factors of production, electricity, gas, and labour could also be established.

• (61) The Commission found that all inputs were imported into Mexico in representative quantities.

• (62) Insignificant import volumes originated in the PRC for a majority of the inputs. With regard to polyurethane paint, approximately 20 % was imported from the PRC. However, the unit price of imports from countries other than the PRC was significantly higher than the Chinese import price. Therefore, the Commission considered that those prices were not affected by the imports originating in the PRC.

• (63) None of the inputs used in the manufacturing of OCS was imported into Mexico from Russia. Therefore, the Commission did not analyse whether the potential existence of sanctions against imports from Russia could have distorted the import prices in Mexico.

• (64) To ascertain that the exports of the inputs used in the production of OCS were not subject to any export restrictions, the Commission consulted the Global Trade Alert ²⁷ database and the Market Access Map ²⁸. It found that Mexico did not impose any restrictions on exports of inputs used in the production of OCS. It was thus concluded that the domestic as well as import prices of those inputs were not distorted by an artificially increased supply of the inputs on the Mexican market.

• (65) The Commission further examined whether any third countries applied trade defence measures against imports of OCS originating in Mexico. The existence of such measures could indicate that the financial results of the Mexican producers of OCS were distorted by dumping practices or subsidisation. It was found that there was no trade defence measure in place against imports of OCS from Mexico during the review investigation period.

• (66) The Commission did not receive any comments concerning the availability of relevant public data in Mexico.

3.2.3.5.   Level of social and environmental protection

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

3.2.3.6.   Conclusion

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

3.2.4.   Sources used to establish undistorted costs

• (69) In the Note, the Commission listed the factors of production such as materials, energy and labour used in the production of the product under review and invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production mentioned in that note. Considering the lack of cooperation by the exporting producers, the list was based on the factors of production used by a representative Union producer.

• (70) Furthermore, the Commission stated in the Note that, in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use GTA to establish the undistorted cost of most of the factors of production, notably the raw materials. In addition, the Commission stated that it would use the information published by Mexico’s regulatory and statistical authorities, as well as major utility companies for establishing undistorted costs of labour ²⁹ and energy ³⁰.

3.2.5.   Undistorted costs and benchmarks

3.2.5.1.   Factors of production

• (71) Considering all the information based on the request and information provided by a representative Union producer, the following factors of production and their sources have been identified in order to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of organic coated steel

Factor of production	Commodity code in Mexico	Undistorted value (CNY)	Unit of measurement	Source of information
Raw materials	Raw materials	Raw materials	Raw materials	Raw materials
Hot dip galvanized steel coil	7210 49 99	11,55	kg	GTA
Polyester paint	3208 10 02	50,98	kg	GTA
Polyurethane paint	3208 90 99	70,03	kg	GTA
Polyvinylidene fluoride paint	3209 90 99	28,52	kg	GTA
By-product	By-product	By-product	By-product	By-product
Scrap galvanized steel	7204 29 99	2,58	kg	GTA
Energy	Energy	Energy	Energy	Energy
Natural gas	n/a	0,02	MJ	Comisión Reguladora de Energía
Electricity	n/a	0,64	kWh	Comisión Federal de Electricidad
Labour	Labour	Labour	Labour	Labour
Labour	n/a	97,02	hour	National Institute of Statistics and Geography

3.2.5.2.   Raw materials

• (72) In order to establish the undistorted price of raw materials as delivered at the gate of a producer in the representative country, the Commission used as a basis the import price to the representative country as reported in the GTA to which import duties and transport cost were added. An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding the PRC and the countries listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the Council ³¹. The Commission decided to exclude imports from the PRC into the representative country as it concluded in section 3.2.2 that it was not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions did not equally affect raw materials used to manufacture products intended for export, the Commission considered that the same distortions affected export prices. After excluding imports from the PRC into the representative country, the volume of imports from other third countries remained representative.

• (73) With regard to import duties, the Commission added import duties to the weighted average import price of each raw material based on its commodity code and the respective country of origin. To determine the applicable import duty rate, the Commission relied on the information collected by Market Access Map ³².

• (74) Considering the lack of cooperation by the Chinese exporting producers, the Commission used publicly available information to estimate the cost normally incurred by a company in Mexico for transport of inputs between a supplier and its premises. The Commission based this estimation on the domestic transport cost relating to imports in Mexico as published in the most recent Doing Business report ³³. This domestic transport cost is included in the undistorted cost presented in table 1 above.

3.2.5.3.   Labour

• (75) The National Institute of Statistics and Geography (‘INEGI’) publishes detailed information on wages and worked hours in different economic sectors in Mexico. The Commission used the data for sector 331 – Basic metals industry corresponding to the review investigation period ³⁴.

• (76) To determine an average hourly labour cost, the Commission relied on the information on total wages paid in sector 331 and total hours worked in that sector. Considering that the purpose of an expiry review is not to establish a precise level of dumping, the Commission did not add additional labour-related cost, e.g. social contributions, to the benchmark used for undistorted cost of labour. Any additional labour-related cost would only increase the normal value and thus the resulting dumping margin.

3.2.5.4.   Electricity

• (77) The price of electricity for companies (industrial users) in Mexico was available on the website of a major electric utility company Comisión Federal de Electricidad (‘CFE’). The Commission used the data on the industrial electricity prices in two tariff categories applicable to industrial users in various regions of Mexico during the review investigation period ³⁵.

3.2.5.5.   Natural gas

• (78) The price of natural gas in Mexico is published by Comisión Reguladora de Energía (‘CRE’). The Commission used the information on prices of natural gas per GJ in each month of the review investigation period to establish an average undistorted price of natural gas ³⁶.

3.2.5.6.   Manufacturing overhead costs, SG&A, and profit

• (79) According to Article 2(6a)(a) of the basic Regulation, ‘the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits’. In addition, a value for manufacturing overhead costs needs to be established to cover costs not included in the factors of production referred to above.

• (80) To establish an undistorted value of the manufacturing overheads and given the absence of cooperation from the exporting producers, the Commission used facts available in accordance with Article 18 of the basic Regulation. The Commission relied on information on manufacturing overheads provided by a representative Union producer of OCS.

• (81) To establish an undistorted value of SG&A cost and profit, the Commission used the financial information of Ternium S.A., an OCS producer in Mexico ³⁷. The financial information was readily available, audited, consolidated and covered year 2023.

• (82) Although the financial information was consolidated, the Commission found that more than half of total turnover stemmed from sales in Mexico. Almost all turnover was achieved from sales of steel products and approximately 1/3 of the turnover specifically from sales of coated products ³⁸. Consequently, the Commission considered that for the purpose of this expiry review, the financial information was sufficiently relevant as a source of undistorted SG&A cost and profit.

• (83) The selected reference year 2023 fully corresponded to the review investigation period. In the selected year, the company was profitable and showed a reasonable level of SG&A cost.

3.2.6.   Calculation of the normal value

• (84) On the basis of the above, the Commission constructed the normal value on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

• (85) First, the Commission established the undistorted cost of manufacturing. In the absence of cooperation by the exporting producers, the Commission relied on the information provided by a representative Union producer of OCS on the usage of each factor of production (materials, energy and labour) for the manufacturing of OCS. The unit consumption of each factor of production was multiplied by the undistorted cost based on data from the representative country. The sum of undistorted cost of raw materials, energy and labour represents the undistorted cost of manufacturing.

• (86) Once the undistorted cost of manufacturing established, the Commission added the manufacturing overheads, SG&A cost and profit.

• (87) Manufacturing overheads of a representative Union producer of OCS were expressed as a ratio of its cost of manufacturing. This percentage was then applied to the undistorted value of the cost of manufacturing to obtain the undistorted value of manufacturing overheads. Manufacturing overheads accounted for 1,5-2 % of the cost of manufacturing. By adding the undistorted manufacturing overheads to the undistorted cost of manufacturing, the Commission established the undistorted cost of production.

• (88) SG&A cost and profit were determined based on the financial information of Ternium S.A. for 2023 as explained in recitals (81) to (83). SG&A cost and profit accounted for 4,7 % and 15,8 % of the Costs of Goods Sold respectively. The respective percentages of undistorted SG&A cost and profit were applied on top of the undistorted cost of production.

• (89) On that basis, the Commission constructed the normal value on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation. The constructed normal value was 14 977,99 CNY/tonne.

3.3.   Production capacity and spare capacity in the PRC

• (90) 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. ³⁹

• (91) 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. ⁴⁰ 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. ⁴¹

• (92) 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 meet the demand on the Union market.

• (93) 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 ⁴² to approximately 50 % in 2022 and 2023 ⁴³. 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.

• (94) 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.

3.4.   Relationship between export prices to third countries and normal value in the PRC

3.4.1.   Normal value

• (95) The Commission determined the normal value as explained in section 3.2.

3.4.2.   Export price

• (96) In the absence of cooperation by exporting producers from the PRC, the export price to third countries was determined based on trade statistics from GTA.

• (97) Accordingly, the Commission identified Thailand, Indonesia, India, South Korea, and Türkiye (in the order of export volumes) as the main export markets for Chinese OCS in the review investigation period. Imports to these five countries represented 38 % of world’s imports of OCS originating in the PRC.

• (98) The weighted average import price per country at CIF level was corrected to ex-works level. Thus, the CIF price was reduced by the sea freight and insurance cost and domestic transport cost.

• (99) The Commission based the reduction of the CIF price to ex-works for sea freight and insurance on the CIF-to-FOB coefficient published by OECD in the ITIC database. The applicable average coefficient was determined for each of the four countries individually and based on the four HS4 codes which cover the product under review.

• (100) The Commission estimated the domestic transport cost based on data relating to exports from the PRC as published in the most recent Doing Business report ⁴⁴.

• (101) The export prices at ex-works level determined as detailed in recitals (96) to (100) ranged from 5 177,18 CNY/tonne for Thailand to 6 563,66 CNY/tonne for India.

3.4.3.   Comparison and price difference

• (102) The Commission compared the constructed normal value established in accordance with Article 2(6a)(a) of the basic Regulation and the export price to third countries on an ex-works basis, in accordance with Article 2(11) and (12) of the basic Regulation.

• (103) The Commission further expressed the price difference as a percentage of the CIF price prevailing in each of the major export markets.

• (104) On this basis, the Commission concluded that the PRC exported OCS to the key export market at a price that was significantly below the normal value of OCS. The price difference ranged from 118 % for India to 173 % for Thailand.

• (105) Those findings reflect the pricing behaviour of Chinese exporters of OCS on all export markets. The Commission concluded that the Chinese exports to the Union were likely to be made at dumped prices should the measures cease to exist.

3.5.   Attractiveness of the Union market

• (106) As discussed in section 3.3, 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 holds true in particular since a number of third countries regulates the access to their market for Chinese coated steel using safeguards and anti-dumping measures (see section 3.5.3).

3.5.1.   Size of the Union market

• (107) 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.

• (108) 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 %.

• (109) 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.

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

• (110) In the review investigation period, 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.

• (111) 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.

3.5.3.   Access to third country markets

• (112) Anti-dumping measures against Chinese OCS exports are in place in Australia ⁴⁵, Malaysia ⁴⁶, Mexico ⁴⁷, Pakistan ⁴⁸, the Southern African Customs Union (‘SACU’) ⁴⁹, Thailand ⁵⁰, United Kingdom ⁵¹ and Vietnam ⁵².

• (113) In addition, imports of inter alia Chinese OCS are subject to safeguard measures ⁵³ in Canada, India, Morocco, Türkiye, United Kingdom, Zambia, as well as in the countries of the Gulf Cooperation Council and of SACU.

• (114) 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 at dumped prices.

3.6.   Conclusion

• (115) The prices on the main Chinese export markets suggest that Chinese exports of OCS would likely be sold at dumped prices in the Union market should measures be allowed to lapse. The existing spare capacity in China is sufficient to cover the whole Union consumption. 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.

• (116) In addition, the prices prevailing on the Union market are considerably higher than the 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.

• (117) 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 dumped prices while undercutting the price of the Union producers.

• (118) Therefore, the Commission concluded that there was a likelihood of recurrence of dumping should the measures be repealed.

4. INJURY

4.1.   Definition of the Union industry and Union production

• (119) 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 those producers belong to steelmaking groups.

• (120) 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 Article 4(1) of the basic Regulation.

4.2.   Union consumption

• (121) 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 (68)-(69) of the Commission Implementing Regulation (EU) 2019/687 of 2 May 2019), 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, regardless of 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.

• (122) 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. Those sales volumes were cross-checked and updated where necessary as regards sampled Union producers as a result of the verification visits to their premises.

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

Table 2

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.

• (124) During the period considered, the Union consumption decreased by 8 %. 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

• (125) 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.

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

Table 3

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: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (127) 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

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

Table 4

Import prices (EUR/ tonne)

	2020	2021	2022	RIP
China	594	1 639	1 675	1 167
Index (2020=100)	100	276	282	196
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (129) 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

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

• (131) 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 5

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 Kingdom54	Volume (tonnes)	93 266	90 602	81 935	107 261
	Index (2021=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 (2021=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.

• (132) 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

• (133) The assessment of the economic situation of the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

• (134) As mentioned in recital (12), sampling was used for the assessment of the economic situation of the Union industry.

• (135) 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 (21)). Both sets of data were found to be representative of the economic situation of the Union industry.

• (136) The macroeconomic indicators (production, production capacity, capacity utilisation, sales volume, market share, employment, productivity, growth, magnitude of dumping margins and recovery from the effects of past dumping) 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.

• (137) 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

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

Table 6

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: Macro-questionnaire reply.	Source: Macro-questionnaire reply.	Source: Macro-questionnaire reply.	Source: Macro-questionnaire reply.	Source: Macro-questionnaire reply.

• (139) 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

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

Table 7

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.

• (141) The sales by the Union industry on the Union market decreased by 15 % during the period considered following the economic trend described in recitals (124) and (139).

• (142) As shown in table 7, the market share of the Union industry decreased during the period considered from 89,6 % to 83,5 %.

4.5.2.3.   Growth

• (143) 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 (139) the future ability for growth is put at risk.

4.5.2.4.   Employment and productivity

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

Table 8

Employment and productivity

	2020	2021	2022	RIP
Number of employees	8 326	8 615	7 931	7 235
Index (2020=100)	100	103	95	87
Productivity (tonnes/FTE)	567	610	554	550
Index (2020=100)	100	108	98	97
Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.	Source: Verified questionnaire replies.

• (145) 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 the dumping margin and recovery from past dumping

• (146) Since the volumes of the dumped imports from China were low, the Commission concluded that the Chinese imports in the period considered were not the basis for a finding of dumping or its magnitude. The Commission established in recital (160) below that the Union industry as a whole showed recovery from past dumping 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. The Commission concluded in recital (166) below that the material injury of the Union industry in the review investigation period was caused by 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.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

• (147) 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 9

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	125	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.

• (148) 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.

• (149) 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

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

Table 10

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.

• (151) The average wage levels increased over the period considered by 12 %, partly due to the high inflation rate.

4.5.3.3.   Inventories

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

Table 11

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  %	1,3  %	1,4  %	1,6  %
Index (2020=100)	100	87	89	106
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.

• (153) 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

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

Table 12

Profitability, cash flow, investments and return on investments