Commission Implementing Regulation (EU) 2025/1732 of 13 August 2025 imposing a provisional anti-dumping duty on imports of candles, tapers and the like originating in the People’s Republic of China

• (146) The analysis set out in this section, which includes an examination of all the available evidence relating to China’s intervention in its economy in general as well as in the sector of the product concerned showed that prices and costs of the product concerned, 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.

• (147) On that basis, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case.

• (148) Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as discussed in the following section.

3.2.6.   Representative country

3.2.6.1.   General remarks

• (149) 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 used countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank ⁹⁰;

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

• — Existence of relevant readily available data in the representative country.

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

• (150) As explained in recital 36, the Commission issued two notes for the file on the sources for the determination of the normal value. These notes described the facts and evidence underlying the relevant criteria, and also addressed the comments received by the parties on these elements and on the relevant sources. In the second note on production factors, the Commission informed interested parties of its intention to consider Thailand 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.

3.2.6.2.   A level of economic development similar to the PRC

• (151) In the First Note, the Commission informed interested parties on the relevant sources it intended to use for the determination of the normal value and provided a list of all factors of production such as raw materials, labour and energy. It also identified possible representative countries.

• (152) According to import statistics of raw materials, imports of the factors of production (‘FOPs’) necessary to produce candles, tapers and the like were found in the following countries that met the criteria set out in 2(6a)(a), first indent of the basic Regulation: Argentina, Brazil, Colombia, Indonesia, North Macedonia, Mexico, Malaysia, Peru, Philippines, Serbia, Thailand, Türkiye and South Africa. It is also considered that candles are produced in all those countries.

• (153) No comments were received concerning the countries identified in that note regarding the level of economic development.

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

• (154) The Commission was unable to find readily available financial data from candle producers in any of the countries mentioned in the previous section except Malaysia and Thailand. Moreover, the financial details found from candle producers in Malaysia were not sufficiently detailed to calculate the SG&A and profit.

• (155) Only in Thailand the Commission identified five companies that produce candles and for which financial data was available with one quarter overlap with the investigation period.

• (156) While the availability of financial data from candles producers in Thailand indicated that Thailand should constitute a representative country (as also indicated in the Notice of Initiation), for three important FOPs (paraffin wax, glass containers and packaging paper), import volumes into Thailand included significant quantities at distorted prices originating from China.

• (157) The Commission sought an alternative country where imports of these FOPs from China would be significantly lower. Türkiye clearly emerged as the most suitable option, where imports of all FOPs representing more than 2 % of total production costs originated for no less than 63 % from countries other than China. Specifically, for paraffin wax, the key raw material, only 15 % of imports into Türkiye originated from China.

• (158) The Commission therefore carried out an extensive search using readily available sources for relevant financial data in Türkiye. While several Turkish candle producers were identified, no readily available financial data was found to establish their profit margins and SG&A expenses. The Commission invited all interested parties to submit such information if available, and none of them identified any other company in any other country than the Thai companies identified by the Commission.

• (159) In response to the First Note, neither any exporting producer nor the Union industry objected to the use of Thailand as a representative country. No party provided any financial data from any other potential representative country.

• (160) On impact of Chinese distorted inputs on prices of certain FOPs in Thailand, the parties had contradicting arguments against and in favour of using import data from Thailand. Exporting producers in favour of using Thailand as a source for all FOPs pointed out that the overall volumes of imports of those FOPs were bigger into Thailand compared to Türkiye and that it would be against the Commission’s earlier practice to select alternative source for FOP’s that could not be sourced from the representative country. Meanwhile, the Union industry expressed concern that if a significant portion of imports of certain FOPs originate from the PRC, then the prevailing price level of that FOP may be considered distorted.

• (161) In the Second Note, the Commission proposed that for all FOPs where imports from China represented more than 50 % of the total import volume (i.e., paraffin wax, glass containers and packaging/labels), it would source undistorted prices from Türkiye. Unlike Thailand, imports into Türkiye from other countries than China consistently exceeded 50 % threshold, providing a more reasonable benchmark.

• (162) The Union industry suggested to search the financial data using the category of industries (NACE) in Türkiye within which candle production falls. The Commission considered that since the data from candle producers are available, it is more appropriate to use those than the less precise NACE level classification.

• (163) Qingdao Kingking disagreed with the criterion of using upper-middle-income countries to source the benchmarks. As this requirement stems from Article 2(6a) of the basic Regulation, this claim was dismissed.

3.2.6.4.   Level of social and environmental protection

• (164) Having established that Thailand 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.

3.2.6.5.   Conclusion

• (165) In view of the above analysis, Thailand met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation to be considered as an appropriate representative country as it is the only country with available financial data needed to establish the SGA and profit. For three FOPs that are affected by distorted Chinese imports, data will be sourced from Türkiye, which has overall the lowest imports from China and has a very detailed imports statistics available.

• (166) In response to the comments for sourcing from Türkiye of prices of certain FOPs, the Commission considered that, even if a representative country is selected, this did not prevent it from, within certain well-defined criteria, consider prices therefrom as potentially distorted and source prices from other countries within the same general category of countries as per Article 2(6a). The detailed analysis of the concerned factors is in the next section.

• (167) Qingdao Kingking argued that the Turkish economy is distorted and unstable, and therefore should not be used as a representative country. The Commission noted that, regardless of the overall state of the Turkish economy, it would have only a limited impact on the import prices of the factors of production relevant to this case. As such, a detailed assessment of the Turkish economy was not necessary and this claim was therefore dismissed.

3.2.7.   Sources used to establish undistorted costs

• (168) In the First Note, the Commission listed the factors of production such as raw materials, energy and labour used in the production of the product under investigation by the exporting producers 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.

• (169) Subsequently, in the Second Note, the Commission stated that, to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use GTA (for import prices) and MacMap (for customs duties) to establish the undistorted cost of most of the factors of production, notably the raw materials.

• (170) Exporting producer Qingdao Kingking inquired about the reason of difference of data figures between Notes 1 and 2, and the need of using two different databases (GTA and MacMap) and requested the exact duty rate for each FOP used in the calculation process. The difference between the two Notes is that in the First Note the international HS-6 level (Harmonised System of classification of goods) is used to compare the availability and prices of all raw materials between several potential representative countries. The Second Note refers to the statistics of the selected representative country at its national customs level (beyond HS-6 digits), knowing that customs duties are levied by customs authorities on that basis only. Customs duties need to be added to the import data, at conventional or preferential rates where the case, from all partner countries to calculate the most accurate full import price. Therefore, both databases, which are readily available (see sources in footnotes 88 and 89), need to be used in the benchmark calculations.

• (171) Qingdao Kingking also argued that determining the undistorted price of a given factor of production based on an average price under a certain HS code in a specific country was inappropriate. It noted that a single HS code often encompassed various product grades, qualities, and end-uses, each associated with different price levels. Consequently, relying on an undifferentiated average price for all such variations was not consistent with the basic principles for establishing normal value. The Commission rejected this claim as it relied on national tariff codes from the most appropriate representative country, as explained in the recital above concerning the Second Note. This allowed the Commission to filter the data at the most granular level of classification and product description to identify the closest possible match to the raw material used by the producers.

3.2.7.1.   Factors of production

• (172) Considering all the information submitted by the interested parties and collected during the verification visits, 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

Factor of Production	Repres-entative country	Commodity codes	Source of data the Commission intends to use	Value (CNY)	Unit of measure-ment
Raw Materials	Raw Materials	Raw Materials	Raw Materials	Raw Materials	Raw Materials
Paraffin wax	Türkiye	2712 20 10 2712 20 900019	Global Trade Atlas (GTA)91 / MacMap92	16,75	Kg
Vegetable waxes	Thailand	1521 10	Global Trade Atlas (GTA) / MacMap	81,41	Kg
Synthetic wax	Thailand	3404 90 90	Global Trade Atlas (GTA) / MacMap	21,66	Kg
Fragrance	Thailand	3302 90	Global Trade Atlas (GTA) / MacMap	138,16	Kg
Glass containers	Türkiye	7010 90 910011 7010 90 990011	Global Trade Atlas (GTA) / MacMap	1,02	Pieces
Metal containers	Thailand	7310 29 19 7310 29 99	Global Trade Atlas (GTA) / MacMap	0,82	Pieces
Ceramic containers	Thailand	6914 90	Global Trade Atlas (GTA) / MacMap	3,85	Pieces
Packaging (corrugated)	Türkiye	4819 10	Global Trade Atlas (GTA) / MacMap	16,02	Kg
Inner paper (non-corrugated)	Türkiye	4819 20 000011 4819 20 000019	Global Trade Atlas (GTA) / MacMap	31,00	Kg
Labour	Labour	Labour	Labour	Labour	Labour
Labour	Thailand	[N/A]	Statistics published by the National Bank of Thailand93	14,9	Labour costs/hour
Energy	Energy	Energy	Energy	Energy	Energy
Electricity	Thailand	[N/A]	Metropolitan Electricity Authority of Thailand94	1,15	kWh

• (173) The Commission included a value for manufacturing overhead costs to cover costs not included in the factors of production referred to above. To establish this amount, the Commission used the sampled exporting producers’ reported costs of manufacturing that had not been included in the individual FOP above, such as depreciation and costs for maintenance.

3.2.7.1.1.   Raw materials

• (174) To establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA to which import duties and transport costs were added.

• (175) 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 countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the Council ⁹⁵.

• (176) The Commission decided to exclude imports from the PRC into the representative country as it concluded in section 3.2.1 that it is 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.

• (177) Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices.

• (178) When exporting producers claimed that they had imported factors of production at undistorted prices, the Commission verified the corresponding invoices and inspected the warehouses where the imported raw materials were stored. Where the Commission could establish that the inputs were fully imported at undistorted prices — for instance, when sourced directly from raw material producers located outside China — those prices were accepted and not replaced by benchmark values. This concerned materials that were not available on the Chinese market and therefore had to be imported.

3.2.7.1.1.1.   Units of measurements

• (179) The Commission noted that the exporting producers used different units of measurement depending on the material. To ensure the most accurate comparison, the Commission selected benchmarks in the appropriate unit. For most materials, including paraffin wax, the benchmarks were in kilograms, while for glass, metal, and ceramic containers, the benchmarks were in pieces. The units of measurement were chosen to match those used by the companies in their manufacturing costs.

3.2.7.1.1.2.   Tolling arrangements

• (180) Some exporting producers used tollers for part of the manufacturing of the candles. The tollers supplied the labour and in certain cases some raw materials. For this service, the toller issued a tolling or processing fee.

• (181) To convert the value of the tolling fee into the value of the underlying cost of labour and/or raw materials, each type of candle for which tolling had been used had been identified and linked to the tolling set-up.

• (182) In cases where the tolling fee only represented labour, the tolling fee was converted into a corresponding value for labour, having first deducted a fair percentage for SG&A and profit incurred by the toller. The converted value had thereafter been reconverted into labour hours, using the exporting producer’s own labour cost/hour.

• (183) In cases where the tolling fee represented both labour costs and raw material cost, the tolling fee was converted into a corresponding value for labour and raw materials, having first deducted a fair percentage for SG&A and profit incurred by the toller.

• (184) If the exporting producer manufactured the same type of candle as the toller, the distribution between labour costs and the various raw material costs for that product type was used.

• (185) If the exporting producer did not manufacture the same type of candle as the toller, the overall distribution between labour costs and the various raw material costs for the whole exporting producer was used.

• (186) In both cases, the converted values of raw materials and labour had thereafter been reconverted into labour hours and raw material consumption, using the exporting producer’s own labour cost/hour and price/kg or piece respectively.

3.2.7.1.1.3.   Paraffin wax

• (187) As explained in section 3.2.6.3, the benchmark for paraffin wax, the key raw material for the candles production could not be sourced from the representative country Thailand.

• (188) More than 58 % of the wax imports into Thailand originated from China. Therefore, the Commission considered that the distorted Chinese price exerted downward pressure on the prices from other countries since the import price from the other countries were very similar to import prices from China. Therefore, this price could not be used and import statistics from Türkiye, where the Chinese imports only accounted for less than 15 %, was considered more appropriate. The Commission found no signs of downward pressure exercised by Chinese imports in Türkiye.

• (189) The Chinese exporting producers contested this approach, asserting in their submissions that the total volume of non-Chinese wax imports was in fact lower in Türkiye than in Thailand. However, as explained in the recital above, the Commission found that the price level in Thailand was distorted, while this was not the case of import prices from Türkiye. Therefore, these claims were dismissed.

• (190) Qingdao Kingking also claimed that synthetic paraffin should be excluded from the wax benchmark without providing any justification for this. This claim was therefore dismissed.

• (191) Qingdao Kingking further claimed that imports into Türkiye from South Africa and Poland should be excluded from Turkish statistics, due to the heavy imports from China to those countries. Qingdao Kingking neither explained nor quantified the link between imports into the country and its export prices to Türkiye, therefore this claim was dismissed.

3.2.7.1.1.4.   Glass containers

• (192) As explained in section 3.2.6.3, the benchmark for glass containers could not be sourced from the representative country Thailand.

• (193) Less than 15 % of Thailand’s total imports of glass containers originated from countries other than China. By contrast in Türkiye over 73 % of such imports originated from non-Chinese sources. The significant difference between Turkish import prices from China and from other countries demonstrated that the latter were not influenced by Chinese prices.

• (194) In addition, the Turkish statistics provided more detailed data expressed in pieces, which could be aligned with the units used by the exporting producers.

3.2.7.1.1.5.   Paper packaging

• (195) As explained in section 3.2.6.3, the benchmark for paper packaging could not be sourced from the representative country Thailand.

• (196) Around 27 % of total Thai imports of paper packaging originated from other countries than China. In contrast to the imports into Türkiye where more than 88% originated from other countries than China. The significant difference between Turkish import prices from China and from other countries demonstrated that the latter were not influenced by Chinese prices.

• (197) In addition, the Turkish statistics enabled splitting the paper to the corrugated packaging and non corrugated packaging, which closely matches the reported FOPs of the exporting producers.

3.2.7.1.1.6.   Synthetic wax

• (198) Qingdao Kingking submitted that imports of synthetic wax into Thailand from Germany, Japan and Singapore should be excluded from the benchmark calculation, because they may be used for military and scientific research.

• (199) The Commission considers this claim as unfounded, as Qingdao Kingking did not further substantiate its claim.

3.2.7.1.1.7.   Ceramic containers

• (200) Qingdao Kingking in its comments required that the Commission disregarded imports from certain countries due to the prices it considered abnormally high as they are allegedly high-end ceramics for other purposes than candles.

• (201) In the absence of any further information or evidence, the Commission considered this claim as unfounded and rejected this claim.

3.2.7.1.1.8.   Other comments

• (202) With regard to import duties applicable to the imports of the FOPs, these have been included in the benchmark price used.

• (203) The Commission expressed the transport cost incurred by the cooperating exporting producer for the supply of raw materials as a percentage of the actual cost of such raw materials and then applied the same percentage to the undistorted cost of the same raw materials to obtain the undistorted transport cost. The Commission considered that, in the context of this investigation, the ratio between the exporting producer’s raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory.

3.2.7.1.1.9.   Consumables

• (204) The exporting producers reported thousands of different production inputs. Verification confirmed that, particularly in the decorative candle segment, many of these inputs were individually of negligible value and could not be easily grouped into specific categories or classified under an HS code, making it nearly impossible to identify a reasonable benchmark price for them. Therefore, all factors of production representing less than 1,5 % of the total production cost were grouped under the category of consumables. Parties were informed about this in the Second Note.

• (205) The Commission calculated the percentage of the consumables on the total cost of raw materials and applied this percentage to the recalculated cost of raw materials when using the established undistorted benchmarks.

• (206) Qingdao Kingking claimed that some raw materials should be maintained with their own factors of production price, or include their initial HS code from the first Note. The Commission dismissed this claim in the provisional phase as this related to the FOPs with insignificant proportion on the costs of production.

3.2.7.1.2.   Labour

• (207) For labour ⁹⁶ costs, the National Bank of Thailand publishes detailed information on wages in different economic sectors in Thailand. The Commission used the latest available statistics covering the investigation period for average labour cost in the private manufacturing sector.

3.2.7.1.3.   Electricity

• (208) The price of electricity for companies (industrial users) in Thailand is published by Thailand Board of Investment and Metropolitan Electricity Authority in Thailand ⁹⁷. The Commission used the data on the industrial electricity prices as a weighted average between on-peak and off-peak prices in THB/kWh, covering the investigation period. The details thereof were attached to the Second Note.

• (209) Qingdao Kingking suggested to adapt the electricity cost, because it was higher than what the Commission used in the anti-dumping investigation concerning imports of fasteners from China (AD676).

• (210) The Commission reviewed the electricity calculation and identified an error in the application of the Ft (Fuel Tariff) adjustment mechanism. As a result, the Commission corrected the error and revised the electricity price accordingly.

• (211) Qingdao Kingking also claimed that as it uses some supplementary photovoltaic power in its production the Commission should provide price of PV in Thailand. However, the Commission considered this claim irrelevant for the determination of the electricity benchmark. This is because the electricity benchmark is intended to reflect the average undistorted price of electricity available to industrial users in the representative country, rather than company-specific or self-generated electricity sources. Photovoltaic electricity, particularly when self-produced, does not form part of the public or commercial electricity grid and therefore does not represent a reliable or broadly applicable benchmark. Therefore, the claim was rejected.

• (212) Ningbo Kwung’s Home contested the method to establish the electricity benchmark. They argued that the consumption bands in the Zhejiang Province differ from those in Thailand where the Time-Of-Use tariff distinguishes peak hours from 9:00 AM to 10:00 PM and required to change the method.

• (213) The Commission determined that the method employed was the most suitable available, as it most accurately reflects the electricity pricing that would be incurred if production occurred in the representative country. Additionally, the electricity consumption for candle production typically happens during factory operating hours, which coincide with the peak consumption tariff. Therefore, the claim was dismissed.

3.2.7.1.4.   Manufacturing overhead costs, SG&A and profit

• (214) 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.

• (215) In the First Note, one exporting producer pointed out that one of the five candle producers in Thailand for which the Commission had been able to retrieve financial data was a subsidiary to one of the non-sampled, cooperating exporting producers in the PRC and its financial performance may have been affected by its location in a special PRC-Thailand economic development zone and access to raw materials from its PRC-based parent company.

• (216) The Commission accepted this claim and therefore disregarded the data of this Thai producer to determine the SG&A and profit.

• (217) In the Second Note, the Commission also informed interested parties that it would establish SG&A and profits based on publicly available information. To this end, two of the remaining four candle producers with available data in Thailand, showed a profit margin of less than 1 %. This was also pointed out by the Union industry in its submission. The Commission therefore proposed to exclude those two candle producers and base the calculation of the SG&A and the profit on a simple average of the remaining two.

• (218) For establishing an undistorted and reasonable amount for SG&A and profit, the Commission relied on the financial data for 2023 for 2 candles producers in Thailand, as extracted from Orbis. The Commission has taken a weighted average of the two candle producers.

• (219) The manufacturing overheads incurred by the cooperating exporting producers were expressed as a share of the costs of manufacturing actually incurred by the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

3.2.8.   Calculation

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

• (221) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of the cooperating exporting producer. These consumption rates were verified during the verification. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country.

• (222) Then the Commission added manufacturing overheads to the undistorted cost of manufacturing to arrive at the undistorted costs of production.

• (223) To the costs of production established as described in the previous recital, the Commission applied SG&A and profit. as derived from the two candle producers in Thailand referred to in recital 218.

• (224) SG&A expressed as a percentage of the Costs of Goods Sold (‘COGS’) and applied to the undistorted costs of production, amounted to 14 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 7 %.

• (225) On that basis, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

3.3.   Export price

• (226) The export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

3.4.   Comparison

• (227) Article 2(10) of the basic Regulation requires the Commission to make a fair comparison between the normal value and the export price at the same level of trade and to make allowances for differences in factors which affect prices and price comparability.

• (228) In the case at hand the Commission chose to compare the normal value and the export price of the sampled exporting producers at the ex-works level of trade. As further explained below, where appropriate, the export price was adjusted in order to: (i) net them back to the ex-works level; and (ii) make allowances for differences in factors which were claimed, and demonstrated, to affect prices and price comparability.

3.4.1.   Adjustments made to the normal value

• (229) As explained in recital 225, the normal value was established at the ex-works level of trade by using costs of production together with amounts for SG&A and for profit, which were considered to be reasonable for that level of trade. Therefore, no adjustments were necessary to net the normal value back to the ex-works level.

• (230) The Commission found no reasons for making any allowances to the normal value, nor were such allowances claimed by any of the sampled exporting producers.

3.4.2.   Adjustments made to the export price

• (231) In order to net the export price back to the ex-works level of trade, adjustments were made on the account of: customs duty, other import charges, freight, insurance, handling loading and ancillary expenses.

• (232) The sampled producers sold the product concerned either directly or through related traders for export to the EU. In the latter case, i.e. where sales were made through a related trader located either in China or Hong Kong, the Commission established that the trader in question performed functions similar to those of an agent working on commission basis. In all cases the traders were operating in parallel with the sales department of the exporting producer and were receiving markup for their functions. The traders were also trading other products than the product concerned and also product concerned purchased from third parties which was not manufactured by the exporting producer. Finally, both exporting producers were also exporting directly the product concerned to the Union, as well as the product concerned and other products to third countries, and had therefore their own export departments.

• (233) The prices of the relevant transactions have been adjusted to account for commission pursuant to Article 2(10)(i) of the basic Regulation.

• (234) Concerning these trading transactions, the Commission sourced the SG&A as from each respective related trader.

• (235) The profit margin was established individually for each respective trader. In the absence of cooperation from an unrelated trader, it was sourced from the profit obtained when the exporting producer purchased candles from unrelated suppliers in the PRC and subsequent resold these candles to independent customers in the Union. The calculation was done at a PCN-level or at the sub-PCN-level in order to obtain matching purchase and resale prices.

3.5.   Dumping margins

• (236) For the sampled cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

• (237) On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows

Table 2

Company	Provisional dumping margin
Ningbo Kwung’s Home Interior & Gift Co. Ltd.	10,6  %
Ningbo Kwung's Wisdom Art & Design Co., Ltd. Anhui Fenyuan Aromatic Technology Co., Ltd.	70,9  %
Qingdao Kingking Applied Chemistry Co., Ltd.	57,5  %

• (238) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled exporting producers, disregarding the margins of the exporting producers with zero and de minimis dumping margins.

• (239) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 55,5 %.

• (240) For all other exporting producers in the PRC the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation.

• (241) To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is the volume of exports of the cooperating exporting producers, sampled and non-sampled, to the Union expressed as proportion of the total imports from the country concerned to the Union in the IP, that were established on the basis of import statistics from Eurostat.

• (242) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted around 80 % of the total imports during the IP. In addition the industry is considered fragmented. On this basis, the Commission find it appropriate to establish the dumping margin for non-cooperating exporting producers at the level of the cooperating sampled individually examined company with the highest dumping margin.

• (243) The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Company	Provisional dumping margin
Ningbo Kwung’s Home Interior & Gift Co. Ltd.	10,6  %
Ningbo Kwung’s Wisdom Art & Design Co., Ltd. Anhui Fenyuan Aromatic Technology Co., Ltd.	70,9  %
Qingdao Kingking Applied Chemistry Co., Ltd.	57,5  %
Other cooperating companies	55,5  %
All other imports originating in country concerned	70,9  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (244) The like product was manufactured by more than 80 producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (245) The total Union production during the investigation period was established at around 484 048 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as data contained in the questionnaire reply of the complainant relating to all Union producers and the questionnaire replies received from the sampled Union producers. The sampled Union producers represented more than 16 % of the total Union production of the like product.

4.2.   Union consumption

• (246) The Commission established the Union consumption on the basis of: (a) data submitted by the complainant concerning the Union industry’s sales of the like product to unrelated customers in the Union, as cross-checked with the sales volumes reported by the sampled Union producers; and (b) imports of the product under investigation from all third countries into the Union, as reported in Eurostat.

• (247) Union consumption developed as follows:

Table 3

Union consumption (tonnes)

	2021	2022	2023	Investigation period
Total Union consumption	736 442	751 713	600 391	617 001
Index	100	102	82	84
Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.

• (248) Consumption in the Union decreased by 16 % during the period considered. A detailed analysis reveals that the Union consumption increased by 2 % from 2021 to 2022, followed by a significant drop in 2023. From 2023 to the investigation period, consumption increased by 2 % but remained 15 % below the beginning of the period considered.

• (249) During the COVID-19 pandemic and the subsequent years, 2021 and 2022, candle consumption in the Union experienced an increase. This rise was attributed to changes in consumer behaviour, particularly due to extended periods of home confinement, which resulted in a higher level of interest in home decoration. Following the year 2022, a decline in consumption was observed, as detailed above.

4.3.   Imports from the country concerned

• (250) The Commission established the volume of imports on the basis of Eurostat data. The market share of the imports was established by comparing the volume of imports with the Union consumption.

• (251) Imports into the Union from the country concerned developed as follows:

Table 4

Import quantity (tonnes) and market share

	2021	2022	2023	Investigation period
Volume of imports from the country concerned (tonnes)	97 764	137 953	116 036	136 548
Index	100	141	119	140
Market share (%)	13	19	20	22
Index	100	138	146	167
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (252) Imports from the country concerned increased from 97 764 tonnes to 136 548 tonnes over the period considered, an increase of 40 %. After a significant rise in 2022, where imports peaked at 137 953 tonnes, a 41 % increase compared to 2021, volumes declined in 2023 to 116 036 tonnes before partially recovering during the investigation period. The overall increase during the investigation period was 40 %.

• (253) The market share of those imports increased from 13 % to 22 % over the period considered, an increase of 67 %.

4.4.   Prices of the imports from the country concerned: price undercutting and price suppression

• (254) The Commission established the prices of imports on the basis of data provided by the cooperating exporting producers, which represented 52 % of Chinese imports to the Union in the investigation period.

• (255) The average price of imports into the Union from the country concerned developed as follows:

Table 5

Import prices (EUR/ tonne)

	2021	2022	2023	Investigation period
China	2 595	3 081	2 601	2 516
Index	100	119	100	97
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (256) The average import prices from China decreased by 3 % over the considered period. Prices increased by around 19 % to reach 3 081 EUR/tonne in 2022. This was followed by a drop in 2023, with prices falling to 2 601 EUR/tonne, to later decrease to 2 516 EUR/tonne during the investigation period.

• (257) The Commission determined the price undercutting during the investigation period by comparing the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level, and the corresponding weighted average prices per product type of the imports from the sampled Chinese producers to the first independent customer on the Union market, established on a Cost, insurance, freight (CIF) basis, with appropriate adjustments, where appropriate, for customs duties and post-importation costs.

• (258) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period. It showed a weighted average undercutting margin of between 16,7 % and 43,2 % by a significant portion of the imports from the country concerned on the Union market.

• (259) In addition to price undercutting, there was also significant price suppression within the meaning of Article 3(3) of the basic Regulation. Due to the significant price pressure caused by the low-priced dumped imports from the Chinese exporting producers, the Union industry was unable to raise its sales prices throughout the investigation period in line with the development of costs of production and in order to achieve a reasonable level of profit, as set out in Table 9 below. The significant price suppression is further confirmed by the price underselling found on the basis of the data provided by the sampled exporting producers.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

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

• (261) As mentioned in section 1.5.1, sampling was used for the determination of possible injury suffered by the Union industry.

• (262) 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 questionnaire reply of the complainant relating to all Union producers, which was cross-checked where necessary with the 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. As the sample of Union producers consisted of two Union producers and in order to ensure confidentiality, the microeconomic indicators are provided in ranges. Both sets of data were found to be representative of the economic situation of the Union industry.

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

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

4.5.2.   Macroeconomic indicators

4.5.2.1.   Production, production capacity and capacity utilisation

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

Table 6

Production, production capacity and capacity utilisation

	2021	2022	2023	Investigation period
Production volume (tonnes)	679 505	623 147	524 690	484 048
Index	100	92	77	71
Production capacity (tonnes)	1 239 777	1 249 136	1 071 090	1 074 502
Index	100	101	86	87
Capacity utilisation (%)	55	50	49	45
Index	100	91	89	82
Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.

• (266) During the period considered, the Union industry’s production volume experienced a consistent and significant decline with an overall decrease of 29 %. From 2021 to 2022, production decreased by 8 %. This downward trend accelerated in 2023, with production falling by 23 % compared to 2021. The decline continued during the investigation period, at which time production had decreased by 29 % when compared to the production volume in 2021.

• (267) During the period considered, the Union industry’s production capacity experienced an overall reduction of 13 %. While the capacity remained stable from 2021 to 2022, it experienced a significant decline from 2022 to 2023 and in the investigation period. Given the decrease in the production volume in the period considered, capacity utilization dropped from 55 % in 2021 to 45 % in the investigation period.

4.5.2.2.   Sales quantity and market share

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

Table 7

Sales quantity and market share

	2021	2022	2023	Investigation period
Total Sales volume on the Union market (tonnes)	592 656	570 013	451 887	448 151
Index	100	96	76	76
Market share (%)	80	76	75	73
Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.	Source: Complainant, sampled Union producers and Eurostat.

• (269) Throughout the period considered the total Union industry’s sales volume experienced a consistent and significant decline with an overall decrease of 24 %.

• (270) Within light of the decrease of sales volume, the Union industry’s market share was reduced by 7 % overall over the period considered, with an invariable declining trend that decreased the presence of Union industry in the market from 80 % of market share in 2021 to 73 % in the investigation period.

4.5.2.3.   Growth

• (271) In the context of a contracting market and declining Union consumption, the data indicate that the Union industry suffered significant losses in production, sales volume, and market share – declines that outpaced the overall market contraction (-6 %). The Union industry’s performance deteriorated more sharply than the market, highlighting the industry’s particularly vulnerable position during the period considered.

4.5.2.4.   Employment and productivity

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

Table 8

Employment and productivity

	2021	2022	2023	Investigation period
Number of employees	10 831	10 530	9 093	9 597
Index	100	97	84	89
Productivity (tonnes/employee)	63	59	58	50
Index	100	94	92	80
Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.	Source: Complainant and sampled Union producers.

• (273) The Union industry experienced a decline in employment of 11 % over the period considered, with the total number of employees falling from 10 831 in 2021 to 9 597 during the investigation period.

• (274) Despite a reduction in employment, the productivity of the Union industry’s workforce, measured in tonnes produced per employee per year, declined by 20 % over the period considered, due to a significant decrease in production. Although the Union industry made efforts to adapt its workforce, the drop in production outpaced these adjustments, resulting in a decline in overall productivity.

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

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

• (276) The product concerned was subject to an anti-dumping investigation in the past. Following an initial investigation, definitive anti-dumping duties were imposed on the product concerned in 2009 ⁹⁸. These measures were repealed following an expiry review investigation in 2015 ⁹⁹. Since these measures were no longer in force during the period considered, the earlier evidence of dumping and the associated duties were no longer relevant for the injury assessment in the context of the current investigation.

4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices

• (277) 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 in the Union

	2021	2022	2023	Investigation period
Average unit sales price in the Union on the total market (EUR/ tonne)	2 000 – 2 500	2 500 – 3 000	2 500 – 3 000	2 500 – 3 000
Index	100	130	131	124
Unit cost of production (EUR/ tonne)	1 500 – 2 000	2 000 – 2 500	2 500 – 3 000	2 000 – 2 500
Index	100	123	148	142
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (278) Sales prices on the Union market to unrelated parties fluctuated over the period considered, ultimately showing an overall increase of 24 %. In 2022, prices rose sharply by 30 %, primarily due to rising input costs. This peak level was maintained throughout 2023. Although the average price declined during the investigation period, it remained 24 % higher than in 2021.

• (279) Over the same period, the unit cost of production of sampled Union producers increased by 42 %. From 2021 to 2022, there was a significant increase of 23 %. This trend continued in 2023 with a further 25 % increase, before decreasing in the investigation period. Overall, the cost of production experienced an increase of 42 % during the period considered. This rise was primarily driven by the development of raw material prices and the companies’ inability to take full advantage of economies of scale due to a reduction in sales and production.

4.5.3.2.   Labour costs

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

Table 10

Average labour costs per employee

	2021	2022	2023	Investigation period
Average labour costs per employee (EUR)	25 000 – 30 000	25 000 – 30 000	30 000 – 35 000	30 000 – 35 000
Index	100	101	113	119
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (281) The average labour costs per employee increased by 19 % over the period considered. While labour costs remained relatively stable between 2021 and 2022, they experienced a significant increase in 2023 and during the investigation period, primarily due to inflation.

4.5.3.3.   Inventories

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

Table 11

Stocks

	2021	2022	2023	Investigation period
Closing stock (tonnes)	10 000 – 12 000	15 000 – 16 000	16 000 – 17 000	22 000 – 23 000
Index	100	139	150	197
Closing stock as a percentage of production (%)	13	15	19	28
Index	100	118	149	223
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (283) In absolute terms, the stocks of the sampled Union producers increased consistently and significantly, rising by 197 % over the period considered. When adjusted for production levels, the closing stock as a percentage of production rose by 123 % during the period considered.

• (284) The increase observed from 2023 to the investigation period should be interpreted with caution, as the candle sector is highly seasonal, with a large portion of sales occurring in the final months of the year. Since the investigation period concluded in October, the stock increase may be overstated compared to previous periods. Nonetheless, even accounting for potential seasonal distortions, the rise in stock levels remained significant.

• (285) This overall increase in stocks highlights a significant imbalance between production and sales. The trend suggests that despite efforts to align production with demand, the accumulation of unsold inventory reflects serious challenges in accessing the market.

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

• (286) 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

	2021	2022	2023	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	9 – 11	16 – 18	4 – 5	3 – 4
Index	100	155	44	32
Cash flow (EUR)	25 507 524	46 364 882	12 123 379	11 985 098
Index	100	182	48	47
Investments (EUR)	7 500 000 – 10 000 000	12 500 000 – 15 000 000	2 500 000 – 5 000 000	5 000 000 – 7 500 000
Index	100	141	42	56
Return on investments (%)	150 –160	170 – 180	10 – 20	2 – 8
Index	100	115	8	3
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (287) 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. The profitability of the sampled Union producers declined significantly over the period considered, falling from 9 % – 11 % in 2021 to approximately 3 % – 4 % during the investigation period. A detailed analysis revealed a temporary increase in profitability to 16 % – 18 % in 2022, followed by a sharp decrease to 4 % – 5 % in 2023 which continued to deteriorate during the investigation period.

• (288) The net cash flow is the ability of the Union producers to self-finance their activities. Over the period considered, net cash flow declined by 53 %. It increased from 2021 to 2022, driven by improved profitability, but then fell sharply in 2023 and during the investigation period, mirroring the deterioration in financial performance.

• (289) The level of yearly investments decreased over the period considered by 44 %. It notably increased between 2021 and 2022 by 41 %, to later decrease in the following period until the investigation period. The increase in investments was primarily aimed at reallocating existing capacities and replacing essential production assets. The investment continued despite severe competition, loss of market share and a financially difficult situation.

• (290) The return on investments is the profit in percentage of the net book value of investments. It developed negatively over the period considered falling from 150 % – 160 % in 2021 to 2 % – 8 % in the investigation period. The negative development shows that, although investments have continued in order to maintain competitiveness, the returns on those investments have fallen substantially over the period considered

4.6.   Conclusion on injury

• (291) In a context of a substantial decrease of the Union consumption (- 16 %), imports from China increased noticeably during the period considered (+ 40 %), at prices which significantly undercut those of the Union industry. This allowed Chinese exporting producers to reach a market share of 22 % in the investigation period (up from 13 % in 2021).

• (292) In these circumstances, the economic situation of the Union industry worsened as is shown by all major macroeconomic indicators presenting a negative trend: production (- 29 %), EU sales (- 24 %) and a significant reduction of its market share (from 80 % to 73 %) in the period considered.

• (293) In reaction to the pressure of low-priced Chinese imports, the Union industry tried to reduce costs and adjustments in employment (- 11 %) were undertaken. However, as a result of the pressure exerted by dumped Chinese imports in terms of increased volumes and low prices, EU sales, productivity and return on investments dropped rapidly in the period considered, at a rate outpacing the observed drop in consumption.

• (294) The cost of production of the Union industry went up significantly during the period considered (+ 42 %), mainly because of a strong increase in the raw material prices.

• (295) The Union industry’s cost increased more than sales prices, consequently, profitability collapsed in the period considered, from 9 % – 11 % in 2021 to an injured scenario (+ 3 % to + 4 %) in the investigation period. Chinese imports consistently undercut Union prices, exerting strong downward pressure on market prices which led to price suppression.

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

5. CAUSATION

• (297) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: imports from third countries, the export performance of the Union industry and Union consumption.

5.1.   Effects of the dumped imports

• (298) The deterioration of the economic situation of the Union industry coincided with a significant and increasing market penetration of increased imports from China, which consistently undercut the Union industry’s prices and, in any event, led to price suppression. In this respect, the evolution of import volumes and prices, as reflected in Tables 4 and 5, suppressed price levels of the Union industry, establishing a causal nexus between the two.

• (299) Imports from China increased by 40 % during the period considered, from 97 764 tonnes in 2021, representing a market share of 13 %, to 136 548 tonnes in the investigation period, representing a market share of 22 %. These increasing imports were made at prices lower than those of the Union industry throughout the period considered and in any event at a price level leading to price suppression, considering that the Union industry could not increase its prices in line with the increase in the cost of production. Similarly, the decline in market share and sales volume, which in turn resulted in a decrease in production output, had a detrimental effect on the industry’s unit production costs due to reduced economies of scale.

• (300) This had a strong negative impact on the Union industry. In a situation of increasing costs and the price pressure exerted by the Chinese dumped imports, the Union industry was precluded from setting prices and production volumes at sustainable levels, which resulted in a very strong drop in profitability from 9 % to 11 % in 2021 to 3 % to 4 % in the investigation period, and the consequent deterioration of its financial indicators.

• (301) It was, therefore, provisionally concluded that dumped imports from China caused material injury to the Union industry in terms of price and volume.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

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

Table 13

Imports from third countries

Country		2021	2022	2023	Investigation period
Total of all third countries except the country concerned	Quantity (tonnes)	30 758	32 668	24 802	25 884
	Index	100	106	81	84
	Market share (%)	4	4	4	4
	Average price	5 116	5 407	5 449	5 024
	Index	100	106	106	98
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (303) Compared to China, other countries maintained a limited presence in the Union market. Although import volumes fluctuated during the period considered, the combined market share of imports from all third countries excluding China remained stable at approximately 4 %. Similarly, throughout the period considered, import prices from these third countries were consistently higher than those of both Chinese exporters and Union producers.

• (304) This indicates that, excluding China, all third countries maintained only a marginal presence in the Union market at noticeably higher prices than those of Chinese and Union producers. Therefore, they were not a contributing factor to the deterioration of the Union industry.

• (305) On that basis, the Commission provisionally concluded that the impact of imports from other countries does not attenuate the causal link between dumped Chinese imports and the material injury suffered by Union producers.

5.2.2.   Export performance of the Union industry

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

Table 14

Export performance of the sampled Union producers

	2021	2022	2023	Investigation period
Export volume (tonnes)	12 000 –14 000	10 000 –12 000	8 000 – 9 000	6 000 – 7 000
Index	100	85	61	51
Average price (tonnes)	2 000 – 2 500	2 500 – 3 000	3 000 – 3 500	2 500 – 3 000
Index	100	139	143	136
Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.	Source: Sampled Union producers.

• (307) Export volumes from the sampled Union producers declined by 49 % during the period considered, falling by more than 6 000 tonnes, from 12 000 – 14 000 tonnes in 2021 to 6 000 – 7 000 tonnes during the investigation period. Average prices of exports increased by 36 % during the period considered.

• (308) The investigation established ¹⁰⁰ that the decline in the export performance of the Union producers can be explained by the pressure exerted by Chinese producers on third-country markets, which in turn has caused a decrease in exports by Union producers. The loss of export sales volume in absolute terms is significantly lower than the loss of sales in the Union. Moreover, the average export price for sales to third countries was higher by 4 % than for EU sales in 2023 and the investigation period.

• (309) On that basis, the Commission provisionally concluded that the impact of export performance does not attenuate the causal link between dumped Chinese imports and the material injury suffered by Union producers.

5.2.3.   Consumption

• (310) Union consumption fell by 16 % during the period considered, while Union sales declined by 24 %. Notably, in 2022, consumption increased by 2 % compared to 2021, yet the Union industry experienced a 4 % decreased in sales over the same period. This indicates a lack of correlation between consumption trends and the industry’s sales performance.

• (311) Similarly, the Union industry reduced its production volumes by 29 %, leaving capacity utilisation at 45 %, which is higher than would be expected from the 16 % decline in consumption.

• (312) On that basis, the Commission provisionally concluded that the decrease in union consumption does not break the causal link between dumped Chinese imports and the material injury suffered by Union producers.

5.3.   Conclusion on causation

• (313) In light of the above considerations, the Commission provisionally established a causal link between the injury suffered by the Union industry and the dumped imports from China. As a result of the significant increase of dumped imports from China, the Union industry was precluded from setting prices and production volumes at sustainable levels, which resulted in a strong deterioration of its economic situation.

• (314) The economic decline of the Union industry coincided with a sharp rise in low-priced dumped imports from China. These imports consistently undercut Union prices, exerting strong downward pressure on market prices. As a result, the Union industry was unable to increase prices in line with rising production costs. This led to falling sales, a reduced output, and a significant drop in profitability. The timing and scale of these developments establish a clear causal link between the dumped imports and the material injury suffered by the Union industry.

• (315) The Commission examined alternative factors that could have contributed to the injury suffered by the Union industry. These included imports from other third countries, the export performance of the Union industry and the evolution of Union consumption. However, none of these were found to weaken the causal link between dumped Chinese imports and the material injury suffered by the Union industry.

• (316) Based on the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury.

6. LEVEL OF MEASURES

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

• (318) In the present case, the complainant claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation. Thus, to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation. Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin.

6.1.   Underselling margin

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