Commission Implementing Regulation (EU) 2025/2287 of 12 November 2025 imposing a provisional anti-dumping duty on imports of adipic acid originating in the People’s Republic of China

• (119) 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.

• (120) For establishing an undistorted and reasonable amount for SG&A costs and profit, the Commission relied on the financial data for 2024 for Rhodia as found on the internet [^ntr95-L_202502287EN.000101-E0095].

• (121) The Commission considered that the rates so established would lead to amounts for SG&A costs and for profit within the meaning of Article 2(6a) of the basic Regulation that are reasonable for the ex-works level of trade.

Calculation

• (122) 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.

• (123) First, the Commission established the undistorted manufacturing costs. The Commission multiplied the verified actual consumption quantity of the individual factors of production of the sampled exporting producers by the undistorted unit costs of those factors of production observed in the representative country, as described in Section 3.4.

• (124) Second, the portion of the undistorted cost of manufacturing reflecting the undistorted value of consumables was established by multiplying the undistorted value of raw materials determined as described in recitals 105 to 110 by the percentage of consumables determined as described in recital 108.

• (125) Third, the Commission established the undistorted value of manufacturing overheads by multiplying the undistorted value of cost of manufacturing by the percentage of manufacturing overheads determined as described in recitals 118 to 119.

• (126) By adding the undistorted value of the manufacturing overheads to the undistorted value of the cost of manufacturing, the Commission established the undistorted cost of production.

• (127) Finally, the Commission established the undistorted amounts for SG&A costs and for profit by multiplying the undistorted value of cost of production by the rates of SG&A costs and of profit determined as explained in recital 120. The undistorted amounts for SG&A costs and for profit, which were considered by the Commission to be reasonable for the ex-works level of trade, were added to the undistorted cost of production.

• (128) SG&A costs, expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 14,6 %. Profit, expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 8,0 %.

• (129) 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.

3.4.   Export price

• (130) The sampled exporting producers exported to the Union either directly to independent customers or through a related company acting as an importer.

• (131) For the exporting producer that exported the product concerned directly to independent customers in the Union, 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.

• (132) For the exporting producer that exported the product concerned to the Union through a related company acting as an importer, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union, in accordance with Article 2(9) of the basic Regulation. In this case, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses of the related importer, and a reasonable profit. This profit was based on the data of the sole cooperating unrelated importer LCM Industriale S.r.l.

3.5.   Comparison

• (133) 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. 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 normal value and the export price were 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.

3.5.1.   Adjustments made to the normal value

• (134) As explained in recital 127, the normal value was established at the ex-works level of trade by using costs of production together with amounts for SG&A costs 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.

• (135) In their comments to the Second Note, Huafon claimed that in order to ensure a fair comparison, selling expenses such as inland and ocean freight, insurance, handling and loading expenses should be deducted from the representative producer’s SG&A costs. Huafon made reference to the judgement of the General Court in the Case T-762/20 Sinopec [^ntr96-L_202502287EN.000101-E0096] which is under appeal, and which considered this point of adjustment of the export price under Article 2(10) of the basic Regulation, where the normal value had been constructed under Article 2(6a) of the basic Regulation.

• (136) The Commission noted that the General Court, in its judgement in CCCME [^ntr97-L_202502287EN.000101-E0097], which followed the Sinopec judgement, first recalled that in accordance with the case-law, if a party claims adjustments under Article 2(10) of the basic Regulation in order to make the normal value and the export price comparable for the purpose of determining the dumping margin, such party must prove that its claim is justified. The burden of proof relating to the specific adjustments listed in Article 2(10)(a) to (k) of the basic Regulation lies with the party wishing to rely on them. It follows that, in that case, as in this investigation, it was for the interested parties, in accordance with that case law, to demonstrate the need for the adjustment requested in support of evidence which they alleged during the investigation.

• (137) The General Court held that [^ntr98-L_202502287EN.000101-E0098], although the practice of making adjustments may prove to be necessary under Article 2(10) of the basic Regulation, to take account of differences between the export price and the normal value which affect their comparability, such deductions cannot be made with respect to a value which has been constructed and which is not, therefore, genuine. That value is not generally affected by factors which might damage its comparability, because it has been artificially established net of these factors [^ntr99-L_202502287EN.000101-E0099]. As in the CCCME case, in the current investigation, the construction of the normal value per product type on an ex-works basis included a reasonable amount for SG&A costs, and there was no information available showing that the Rhodia’s SG&A costs included any distribution cost. Consequently, in view of the Commission’s discretion in the application of Article 2(10) of the basic Regulation, the Commission’s approach adhered to the most recent case-law concerning unsubstantiated claims that amounts for SG&A costs used in the construction of the normal value under Article 2(6a)(a) of the basic Regulation, which are considered by the Commission to be reasonable for the ex-works level of trade, contain transport costs. As explained in recital 133, the Commission chose to compare the export price and the normal value at ex-works level of trade. As explained in recitals 122 to 129, the normal value was established at ex-works level of trade by using costs of production together with amounts for SG&A costs and for profit, which were considered to be reasonable for that level of trade.

• (138) Furthermore, Huafon did not provide evidence that the SG&A costs used by the Commission were not already reported at an ex-works level, or that they would lead to an amount for SG&A costs that would not be ‘reasonable’ at that level of trade, within the meaning of Article 2(6a)(a) of the basic Regulation. Therefore, no adjustments were necessary to net the normal value back to the ex-works level. This claim was therefore rejected.

3.5.2.   Adjustments made to the export price

• (139) 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.

• (140) Allowances were made for the following factors affecting prices and price comparability: credit cost, bank charges and commissions.

3.6.   Dumping margins

• (141) For the sampled 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.

• (142) 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, as well as margins established in the circumstances referred to in Article 18 of the basic Regulation.

• (143) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 32,0 %.

• (144) For all other exporting producers in China, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is determined based on the volume of exports of the cooperating exporting producers to the Union, expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of data reported in Eurostat.

• (145) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted around 90 % of the total imports during the investigation period. On this basis, the Commission decided to establish the dumping margin for non-cooperating exporting producers at the level of the cooperating sampled company with the highest dumping margin.

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

Company	Provisional dumping margin
Chongqing Huafon Chemical Co., Ltd	28,6  %
Tangshan Zhonghao Chemical Co., Ltd	46,8  %
Other cooperating companies	32,0  %
All other imports originating in the People’s Republic of China	46,8  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (147) The like product was manufactured by five companies (with one of them being a group consisting of two separate legal production entities) in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

• (148) The total Union production during the investigation period was established at 444 153 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, more precisely the questionnaire replies of the sampled Union producers as well as the macro questionnaire replies of the other Union producers composing the Union industry. As indicated in recital 13, the two sampled Union producers represented over 60 % of the total Union production and sales of the like product destined for the free market.

4.2.   Determination of the relevant Union market

• (149) To establish whether the Union industry suffered injury and to determine consumption and the various economic indicators related to the situation of the Union industry, the Commission examined whether and to what extent the subsequent use of the Union industry’s production of the like product had to be taken into account in the analysis.

• (150) Adipic acid is used as an intermediate material for the production of various value added downstream products, such as polyester polyols, polyurethanes, Nylon 6.6 and various adhesives, sealants, plasticisers, lubricants …, etc. The Commission found that a substantial part of the sampled Union producers’ production was destined for captive use.

• (151) The distinction between captive and free market is relevant for the injury analysis because products destined for captive use are not exposed to direct competition from imports as they are sold within the same company or groups of companies on the basis of transfer prices set according to internal price policies thus not directly linked to prices on the free market. By contrast, production destined for free market sale is in direct competition with imports of the product concerned.

• (152) To provide a picture of the Union industry that is as complete as possible, the Commission obtained data for the entire adipic acid activity and determined whether the production was destined for captive use or for the free market.

• (153) The Commission examined certain economic indicators relating to the Union industry on the basis of data for the free market. These indicators are: sales volume and sales prices on the Union market; market share; growth; export volume and prices; profitability; return on investment and cash flow. Where possible and justified, the findings of the examination were compared with the data for the captive market in order to provide a complete picture of the situation of the Union industry.

• (154) However, other economic indicators could meaningfully be examined only by referring to the whole activity, including the captive use of the Union industry. These are: production; capacity; capacity utilisation; investments; stocks; employment; productivity; wages and ability to raise capital. They depend on the whole activity, whether the production is captive or sold on the free market.

4.3.   Union consumption

• (155) The Commission established the Union consumption on the basis of: (a) sales data reported in the questionnaire replies of the sampled Union producers as well as the macro questionnaire replies of the rest of the Union industry; and (b) imports of the product under investigation into the Union from all third countries as reported in Eurostat.

• (156) Union consumption developed as follows:

Table 1

Union consumption (in tonnes)

	2021	2022	2023	IP (2024)
Total Union consumption	771 080	601 749	515 366	556 461
Index	100	78	67	72
Captive market	371 556	289 055	235 108	266 540
Index	100	78	63	72
Free market	399 524	312 694	280 258	289 922
Index	100	78	70	73
Source: Union producers’ questionnaire responses, Eurostat.	Source: Union producers’ questionnaire responses, Eurostat.	Source: Union producers’ questionnaire responses, Eurostat.	Source: Union producers’ questionnaire responses, Eurostat.	Source: Union producers’ questionnaire responses, Eurostat.

• (157) The total Union consumption decreased by 33 % between 2021 and 2023 and then increased slightly during the investigation period. Overall, the Union consumption decreased by 28 % during the period considered.

• (158) The captive and free market consumption followed the same year to year trends during the period considered, both decreasing during the entire period considered, respectively by 28 % and 27 %.

• (159) This decrease in adipic acid consumption is linked to the downward trend experienced in some of the downstream segments, in particular the polyester polyols and polyurethanes products.

4.4.   Imports from the country concerned

4.4.1.   Volume and market share of the imports from China

• (160) 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 free market consumption.

• (161) Imports into the Union from China developed as follows:

Table 2

Import quantity (tonnes) and market share

	2021	2022	2023	IP (2024)
Quantity of imports from China (tonnes)	77 321	66 171	94 816	103 075
Index	100	86	123	133
Market share on the free market	19,4  %	21,2  %	33,8  %	35,6  %
Index	100	109	175	184
Source: Eurostat, questionnaire replies.	Source: Eurostat, questionnaire replies.	Source: Eurostat, questionnaire replies.	Source: Eurostat, questionnaire replies.	Source: Eurostat, questionnaire replies.

• (162) Imports from China dropped by 14 % from 2021 to 2022, mainly due to increased transportation costs but then kept on increasing steadily resulting in an overall increase of 33 % during the period considered, reaching 103 075 tonnes in 2024. This increase in volume is even more significant given the decline in consumption in the same period. Consequently, the market share of Chinese imports grew from 19,4 % in 2021 to 35,6 % in 2024, representing an increase by 84 %.

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

• (163) The Commission established the prices of imports on the basis of Eurostat data. Price undercutting of the imports was established on the basis of verified questionnaire replies of the sampled exporting producers in China.

• (164) The weighted average price of imports into the Union from China developed as follows:

Table 3

Import prices (EUR/tonne)

	2021	2022	2023	IP (2024)
Price of imports from China	1 514	1 848	1 251	1 251
Index	100	122	83	83
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (165) The average prices of the imports from China increased in 2022, in line with the increase in raw material and ocean freight prices but then dropped significantly below 2021 level for the rest of the period considered. Overall, the prices decreased from 1 514 EUR/tonne in 2021 to 1 251 EUR/tonne during the investigation period, a decrease by 17 % demonstrating the aggressive pricing policy adopted by the Chinese exporting producers. When comparing the prices of Chinese imports with those of the Union industry (as shown in Table 3 and Table 7), it is evident that the import prices from the country concerned were consistently below those of the Union producers, often by a large margin.

• (166) The Commission determined the price undercutting during the investigation period by comparing:

• — the weighted average sales prices 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 of the imports from the sampled cooperating Chinese exporting producers to the first independent customer on the Union market, established on a Cost, insurance, freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs.

• (167) The price comparison was made 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 12 % and 14 % by the imports from the country concerned on the Union market.

• (168) 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, as from 2023, the Union industry was unable to raise its sales prices in line with the development of costs of production and in order to achieve a reasonable level of profit, as set out in Table 8 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.

• (169) The investigation revealed that the Union industry’s prices were suppressed by the low-priced imports originating in the PRC. During the period considered, the Union industry’s production costs increased mainly due to rising energy and raw material costs (see recital 191). Meanwhile, imports from China continued to increase significantly in relative terms in 2022 and both in relative and absolute terms afterwards, with prices decreasing after 2022, making it impossible for the Union industry to sell the product at a price that would cover its cost of production, with the exception of 2021 when the Union industry was barely profitable. This price suppression confirmed that the dumped imports from China resulted in a loss of profitability for the Union industry. As noted in recital 191, in 2023, when production costs for the Union industry remained high (38 % above 2021 price level), the Union industry was forced to abruptly lower its sales prices on the free market given the increasing price pressure from Chinese imports. As can be seen in Table 3 and Table 8, as from 2022 onwards Chinese imports entered the Union market at average prices well below the Union industry’s cost of production. Adipic acid is a commodity product, meaning that customers switch relatively easily and quickly based on the prices offered by various suppliers. This meant that the Union industry had no other option but to lower its prices to secure some sales volumes.

4.6.   Economic situation of the Union industry

4.6.1.   General remarks

• (170) 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.

• (171) As mentioned in recital 13, sampling was used for the determination of possible injury suffered by the Union industry.

• (172) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data of the sampled Union producers and the macro questionnaire replies of the Union industry. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the two sampled Union producers. In order to avoid revealing sensitive data among the two sampled Union producers, the microeconomic indicators are provided in ranges. Both sets of data were found to be representative of the economic situation of the Union industry.

• (173) 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.

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

4.6.2.   Macroeconomic indicators

4.6.2.1.   Production, production capacity and capacity utilisation

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

Table 4

Production, production capacity and capacity utilisation

	2021	2022	2023	IP (2024)
Production quantity (tonnes)	698 454	535 885	405 755	444 153
Index	100	77	58	64
Production capacity (tonnes)	847 552	744 880	743 469	742 145
Index	100	88	88	88
Capacity utilisation	82 %	72 %	55 %	60 %
Index	100	87	66	73
Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.

• (176) The production volume of the like product showed a clear downward trend following closely the developments of the Union consumption as shown in Table 1. Union production dropped in 2022 by 23 % in line with the contraction in the Union market. The production volume went down further in 2023, reaching an all-time low in output of just over 400 000 tonnes meaning a further 19 percentage point contraction. In the investigation period, the production volumes recovered slightly following closely the trends of the Union consumption. Overall, during the period considered, the production volume of the like product dropped by 36 %, well exceeding the contraction in the Union consumption. As already mentioned in recital 158 both captive and free market consumption followed the same trends.

• (177) Production capacity remained stable for all producers, with the exception of one, which reduced its adipic acid production capacity in 2022 by around 100 000 tonnes. As from 2022 until the end of the investigation period, production capacity remained practically unchanged, with just over 740 000 tonnes annually. This also means, that the Union industry is able to cover the entire Union demand, in contrast to claims made by some of the interested parties, as mentioned in recital 7. This claim was therefore rejected.

• (178) In line with the figures reported for production and capacity, capacity utilisation also decreased significantly. Capacity utilisation was 82 % in 2021. With the further decrease in production in 2023, the capacity utilisation rate went down to 55 %. The slight increase in production resulted in a 60 % capacity utilisation rate during the investigation period, which is however not viable. It is well accepted market knowledge that capacity utilisation rates below 80 % do not allow sustainable production in the chemical industry and lead to unsustainable increase of unit costs and subsequent losses.

4.6.2.2.   Sales quantity and market share

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

Table 5

Free market sales and market share

	2021	2022	2023	IP (2024)
Free market sales volume (tonnes)	308 535	230 449	168 734	169 048
Index	100	75	55	55
Market share (%)	77,2	73,7	60,2	58,3
Index	100	95	78	76
Source: Macro questionnaire replies, questionnaire replies of sampled Union producers	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers

• (180) The Union industry’s free market sales volume showed a marked 25 % decrease in 2022, followed by a further contraction in 2023 by 20 percentage points. In the investigation period the sales on the free market remained the same as in 2023. Therefore overall, during the period considered free market sales decreased by a whopping 45 % which is significantly above the 27 % contraction rate in the size of the Union free market (Table 1). The reason for the loss in sales volumes exceeding the market contraction is due to the simultaneous increase of Chinese imports. As it can be seen in Table 2, volumes of Chinese imports managed to grow in a contracting market by 23 % in 2023 (compared to 2021 levels) and then by a further 10 percentage points in the investigation period.

• (181) In line with the trends described above, the market share of the Union industry on the free Union market decreased drastically during the period considered, dropping continuously from 77,2 % in 2021 to 58,3 % in the investigation period, which corresponds to a loss of almost 19 percentage points. At the same time, as seen in Table 2, the Chinese imports increased their market share from 19,4 % in 2021 to 35,6 % in the investigation period, i.e. presenting an 84 % growth to the detriment of the Union industry.

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

Table 6

Captive volume and market share

	2021	2022	2023	IP (2024)
Captive Union market volume (tonnes)	371 556	289 055	235 108	266 540
Index	100	78	63	72
Total production of the Union industry (tonnes)	698 454	535 885	405 755	444 153
Index	100	77	58	64
Share of captive market over the total Union production	53 %	54 %	58 %	60 %
Index	100	102	109	113
Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.

• (183) The captive Union market volume (composed of adipic acid kept by the Union industry for downstream use) decreased by 28 % during the period considered in line with the decrease of the overall (total) adipic acid Union consumption (Table 1). This decrease was however less significant than the 45 % drop in the free sales volume experienced in the same period (Table 5). Given that the production volumes had to decrease following the decline in overall consumption, the share of the captive market over the total Union production increased by 13 %, reaching 60 % in the investigation period.

4.6.2.3.   Growth

• (184) The relevant indicators of the Union industry, such as production, sales volume and market share, all show a clear decreasing trend during the period considered demonstrating that the Union industry was not able to grow, either in absolute terms or in relation to the Union consumption. The consumption shrank, while at the same time, dumped imports from China increased significantly both in volume and, even more, in market share.

4.6.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2021	2022	2023	IP (2024)
Number of employees (FTE)	1 175	1 173	1 134	1 114
Index	100	100	96	95
Productivity (tonnes/FTE)	594	457	358	399
Index	100	77	60	67
Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.	Source: Macro questionnaire replies, questionnaire replies of sampled Union producers.

• (186) The number of employees (full time equivalent, FTE) remained relatively stable during the period considered with a slight decrease in 2023 and in the investigation period, resulting in an overall 5 % reduction.

• (187) In view of the drastic decrease in production over the period considered, productivity of the Union industry’s workforce measured in tonnes produced per year per FTE employee deteriorated significantly from 2021 to 2023 by 40 %. Given the slight increase in production by 6 percentage points during the investigation period, the productivity also slightly increased but was still 33 % below the 2021 level during the investigation period.

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

• (188) 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.

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

4.6.3.   Microeconomic indicators

4.6.3.1.   Prices and factors affecting prices

• (190) The weighted average unit sales prices of the sampled Union producers in the Union free and captive markets developed over the period considered as follows:

Table 8

Sales prices in the Union

	2021	2022	2023	IP (2024)
Average unit sales price in the Union free market (EUR/tonne)	[1 400 – 1 700 ]	[2 200 – 2 500 ]	[1 550 – 1 850 ]	[1 500 – 1 800 ]
Index	100	150	102	97
Average transfer price on the captive market (EUR/tonne)	[1 400 – 1 700 ]	[2 300 – 2 600 ]	[2 000 – 2 300 ]	[1 600 – 1 900 ]
Index	100	159	141	112
Unit cost of production (EUR/tonne)	1 400 – 1 700 ]	[2 100 – 2 400 ]	[1 900 – 2 000 ]	[1 700 – 2 000 ]
Index	100	154	138	118
Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.

• (191) The sales prices on the free market increased markedly in 2022 due to the hike in raw material and energy prices which pushed up production costs by a similar magnitude, that is by 54 %. In 2023 however, even though the unit production costs remained high (38 % above 2021 price level) mainly due to the drop in production volume, the Union industry was forced to lower its sales prices on the free market given the increasing price pressure from Chinese imports. As it can be seen in Table 3, as from 2022 onwards, Chinese imports entered the Union market at average prices well below the Union industry’s cost of production. Adipic acid is a commodity product, meaning that customers switch relatively easily and quickly based on the prices offered by various suppliers. This meant that the Union industry had no other option but to lower its prices to secure some sales volumes.

• (192) During the investigation period, the unit cost of production decreased compared to 2023 by 20 percentage points due to the increase of the production volume and the successful adjustments made by the Union industry in optimising their energy consumption. Nevertheless, it remained still markedly above 2021 levels (+ 18 %) given the overall low level of production. The price pressure exerted by the Chinese imports, however, continued and imports arrived in increasing volumes and at dumped prices as can be seen in Tables 3 and 4 and as explained in recitals 162 and 165. The Union industry was therefore forced to further reduce its prices on the free market despite its precarious situation and was still not able to cover its cost of production.

• (193) Sales on the captive market were made at transfer prices and were not in direct competition with Chinese (or any other) imports. In accordance with general transfer pricing requirements, the average captive prices followed the trends of the cost of production. The average captive prices also remained above the sales prices on the free market during the entire period considered, with the exception of 2021 when they were at the same level.

4.6.3.2.   Labour costs

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

Table 9

Average labour costs per employee

	2021	2022	2023	IP (2024)
Average labour costs per FTE employee (EUR)	[80 000 – 85 000 ]	[82 000 – 87 000 ]	[84 000 – 89 000 ]	[84 000 – 89 000 ]
Index	100	102	105	104
Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.

• (195) During the period considered average labour costs increased moderately from year to year, below average inflation rates reported in Germany [^ntr100-L_202502287EN.000101-E0100], the country where both sampled producers are located, demonstrating that the Union industry was trying to push down its costs as much as possible.

4.6.3.3.   Inventories

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

Table 10

Stocks

	2021	2022	2023	IP (2024)
Closing stock (tonne)	[5 000 – 7 000 ]	[10 000 – 12 000 ]	[4 000 – 6 000 ]	[7 000 – 9 000 ]
Index	100	197	81	124
Closing stock as a percentage of production	2,8  %	6,9  %	3,9  %	4,3  %
Index	100	244	138	152
Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.

• (197) Adipic acid may not be stored for long time without caking. As the storage capacity is limited, the level of stocks was kept at a relatively low level by the Union industry throughout the period considered. However, due to the sudden drop in consumption in 2022, stock levels increased sharply in that year, by 144 %. To avoid a further increase in inventory, the Union industry had to reduce its production in 2022 and even more in 2023 to bring the stock to an acceptable level.

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

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

Table 11

Profitability, cash flow, investments and return on investments

	2021	2022	2023	IP (2024)
Profitability of sales in the Union to unrelated customers (% of sales turnover)	[2  % - 4  %]	[0  % - 2  %]	[–30  % - –25  %]	[–15  % - –10  %]
Index	100	21	– 945	– 442
Cash flow (EUR)	[20 million - 25  million]	[10 million - 15  million]	[–20 million - –15  million]	[–20 million - –15  million]
Index	100	56	–81	–80
Investments (EUR)	[3 million - 6  million]	[2 million - 5  million]	[2 million - 5  million]	[2 million - 5  million]
Index	100	91	91	91
Return on investments	[5  % - 10  %]	[–5  % - 0  %]	[–85  % - –80  %]	[–65  % - –60  %]
Index	100	–42	–1 059	– 800
Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.	Source: Questionnaire replies of sampled Union producers.

• (199) 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. In 2021, the Union industry was still able to realise modest profits even though the Chinese products were already present on the market. However, they were at a similar price level to that of the Union industry. In 2022 the Union industry’s profitability decreased, mainly due to the costs increases, but the Union industry still managed to stay at around break-even, since the Union market was somewhat shielded from the impact of Chinese imports which declined in volume and increased in price due to the very significant increase in ocean freight costs experienced during the energy crisis of 2022. In the following years however the situation changed drastically. Chinese imports entered the Union market at very low, dumped prices and in growing volumes. The Union industry was forced to further decrease its production and sales price due to the aggressive price pressure exerted by the Chinese imports. Consequently, its profitability deteriorated drastically. The profitability of the Union industry plummeted to record low levels in 2023 and even though it managed to recover slightly during the investigation period, it remained seriously loss making.

• (200) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in a similar manner, it decreased continuously and drastically during the period considered. From a relatively healthy start in 2021 it turned negative in 2023 and has not recovered since.

• (201) Given the tendencies described above, the Union industry was not able to engage in important investments to finance substantial improvements or upgrades. Rather, it kept the level of investment at the minimum required to ensure the necessary repairs and maintenance. As a result, investments were kept on a low but relatively stable level with a slight decrease of 9 % during the period considered.

• (202) The return on investments is the profit in percentage of the net book value of investments. In line with the developments described above, return on investments deteriorated together with the profits and from a relatively solid start in 2021 it took a sharp downward trend in 2022 and remained negative during the investigation period.

• (203) The sampled Union producers’ ability to raise capital was severely affected by the deterioration of their economic and financial performance as from the second half of the period considered and by the uncertain market outlook.

4.7.   Conclusion on injury

• (204) As can be seen in Table 2, the volume of imports from China increased by 33 % between 2021 and the investigation period, while the Union free market consumption contracted by 27 %. The market share of Chinese imports increased by 84 % (from 19,4 % in 2021 to 35,6 % during the investigation period) to the detriment of the Union industry. As seen in Table 3, the prices of Chinese imports decreased by 17 % during the period considered, despite the overall opposite trends in raw material and energy prices. More specifically, from 2023 onwards, Chinese exporting producers adopted an extremely aggressive pricing policy heavily undercutting the Union industry prices.

• (205) All injury indicators of the Union industry showed a deteriorating or stagnating trend during the period considered. In particular, as seen in Table 4, the production volume decreased considerably, by 36 % exceeding the contraction in the Union market, pushing up unit production costs. Capacity utilisation rates in 2023 and the investigation period were at or below 60 %, which is untenably low for this type of industry. The sales volumes on the free market decreased by 45 % (Table 5) which surpasses significantly the 27 % contraction in consumption observed in the same period on the free market (Table 1). This translated for the Union industry into a loss of its free market share from 77 % in 2021 to 58 % during the investigation period (Table 5). Given the continuous and even increasing price pressure exerted by the Chinese imports, the Union industry was not able to increase its prices to cover its costs and became heavily loss making as from 2023 onwards (Table 11).

• (206) In summary, the Union industry experienced a simultaneous deterioration of both its macro and micro indicators, while Chinese imports exerted a significant pressure on the Union industry both in terms of volume and prices.

• (207) 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. As a consequence, the claim of interested parties on lack of injury as described in recital 10 was rejected.

5. CAUSATION

• (208) 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: contraction in demand; imports from other countries; the export performance of the Union industry; captive use and cost increases in raw material and energy prices.

5.1.   Effects of the dumped imports

• (209) 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 suppressed price levels of the Union industry, establishing a causal nexus between the two.

• (210) As described in recital 162 and shown in Table 2, the volume and market share of Chinese imports increased considerably during the period considered by 33 % and 84 % respectively. During the same period, as set out in recitals 180 and 181, the Union industry lost 45 % of its sales volume on the free market and its market share declined by 19 % percentage points.

• (211) Moreover, as shown in Section 4.5, Chinese imports were consistently undercutting the Union industry prices throughout the period considered and especially from 2023 onwards, leading to a rapid deterioration of the financial situation of the Union industry. In 2023, after the slight halt in 2022 due to higher ocean freight prices, Chinese imports regained sales volumes and suppressed the price level on the Union market coinciding with a severe deterioration of the Union industry’s profitability. As from 2023 until the end of the investigation period, the Union industry was not able to maintain its prices at a profit-making level due to the surge in Chinese imports at dumped prices and became heavily loss-making (Table 11).

• (212) Therefore, the Commission concluded that the significant increase in market share of dumped imports from China at prices that were undercutting the Union prices, caused material injury to the Union industry.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

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

Table 12

Imports from third countries

Country		2021	2022	2023	IP (2024)
USA	Quantity (tonne)	10 569	9 425	14 192	15 624
	Index	100	89	134	148
	Market share	2,6  %	3,0  %	5,1  %	5,4  %
	Average price (EUR/tonne)	1 374	2 039	1 944	1 794
	Index	100	148	142	131
Total of all third countries except the country concerned	Quantity (tonne)	13 668	16 074	16 708	17 799
	Index	100	118	122	130
	Market share	3,4  %	5,1  %	6,0  %	6,1  %
	Average price (EUR/tonne)	1 392	2 084	1 932	1 780
	Index	100	150	139	128
Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.	Source: Eurostat.

• (214) Import volumes of adipic acid from the rest of the world remained modest throughout the period considered, below 18 000 tonnes annually representing at most 6 % of the Union market share. Imports originating from the USA were the biggest by far.

• (215) What is also evident from the import statistics in Table 12, is that these modest volumes were entering the Union market at prices not only above the prices of their Chinese competitors but also above those of the Union industry.

• (216) Therefore, the Commission provisionally concluded that given their low volume and high price level, these third country imports could not be the cause of the material injury suffered by the Union industry.

5.2.2.   Export performance of the Union industry

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

Table 13

Export performance of the Union producers

	2021	2022	2023	IP (2024)
Total exports to unrelated customers volume (tonne)	28 494	27 448	10 084	13 612
Index	100	96	35	48
Average price (EUR/tonne)	[1 600 – 1 800 ]	[2 300 – 2 500 ]	[1 550 – 1 750 ]	[1 500 – 1 700 ]
Index	100	143	98	95
Source: Questionnaire reply of sampled Union producers.	Source: Questionnaire reply of sampled Union producers.	Source: Questionnaire reply of sampled Union producers.	Source: Questionnaire reply of sampled Union producers.	Source: Questionnaire reply of sampled Union producers.

• (218) During the period considered, export volumes represented less than 10 % of the free market sales of the Union industry. In fact, in 2023 and in the investigation period, when injury was most pronounced, exports represented only around 2 % of free market sales. At the same time, the average price level of these exports was consistently above the price level on the Union free market, however, as from 2023 it was below the cost of production. In other words, even though the export sales were not always profitable, given that export prices were still higher than prices on the Union market, these export sales mitigated the situation of the Union producers, rather than aggravating it.

• (219) Therefore, in view of the above considerations, and in particular given the low volumes of export sales, the Commission provisionally concluded that the export performance of the Union industry did not attenuate the causal link between the dumped imports from the country concerned and the material injury found.

5.2.3.   Cost increases in raw materials and energy prices

• (220) Two users, Purinova and Allnex stated that the hardships encountered by the complainants stemmed from the rising cost of production and the decrease of profitability on the downstream market, and not from the increased inflow of adipic acid from China.

• (221) The increase in raw material and energy prices contributed to the increase of cost of production of the Union industry, in particular in 2022, during the energy crisis. However, when energy prices and raw material prices (Benzene and Ammonia) were the highest, in 2022, the volume of Chinese imports dropped by 14 % together with an increase in their sales prices by 22 % (Tables 2 and 3). Therefore, the Union industry was able to increase its sales prices to absorb its rising unit cost of production as it is done by economic operators under normal market conditions. However, starting from 2023, while energy prices had started to decrease, Chinese imports surged again at heavily suppressed prices so that the Union industry was forced to lower its selling prices below its cost of production in order to secure some sales volumes and remain a player on the market. This is also the time when its situation deteriorated markedly and injury became evident.

• (222) Therefore, the Commission provisionally concluded that it was not the increase in raw material and energy prices that caused injury to the Union industry.

5.2.4.   Consumption

• (223) Purinova claimed that the decline in revenues and profits over the last few years is the result of a significant decrease in demand for adipic acid.

5.2.4.1.   Contraction in demand

• (224) As noted in recital 157 the Union free market contracted during the period considered by 27 %. Regardless of this contraction, in the same period, the volume of Chinese imports increased by 33 %, which translated into a growth in their market share from 19,4 % in 2021 to 35,6 % in the investigation period. This happened to the detriment of the Union industry, which during the same period, lost 45 % of its free market sales volumes so that its market share declined from 77,2 % to 58,3 %. When looking at the absolute figures, a decline in the Union industry sales volumes on the free market proportionate to the consumption decline in the same market would have been around 110 000 tonnes (Table 1), whereas instead, due to the effect of the Chinese imports, it amounted to 140 000 tonnes.

• (225) Furthermore, although consumption decreased already significantly in 2022, the Union industry was still profitable. The further slight decrease observed in the period between 2022 and the IP cannot, itself, explain the significant deterioration of the situation of the Union industry.

• (226) Therefore, the contraction in demand in the market did not attenuate the causal link between the dumped Chinese imports and the injury suffered by the Union industry.

5.2.4.2.   Captive use

• (227) As can be seen in Table 6 and concluded in recital 183, the captive market contracted in the same manner as the free market, given that it was driven by the same market forces of the downstream products. Therefore, it is important to note that even though captive use declined in volume, which affected negatively production volumes and unit cost of production, this rate of decline was not sharper than the decline on the free market.

• (228) Moreover, as it can be seen in Table 8 and is explained in recital 193, the sales prices of captive use were based on transfer pricing and thus were following the developments in the cost of production and were consistently kept above the level of free market prices.

• (229) Therefore, even if the decline in the volume of captive use could have had a negative impact on the Union industry’s economic situation, the Commission provisionally concluded that the developments in the captive use did not attenuate the causal link between the dumped imports and the injury.

• (230) Based on the above, the Commission rejected the claim that injury was solely due to the decline in consumption be it captive or on the free market.

5.3.   Conclusion on causation

• (231) A strong causal link was established between the dumped imports from the country concerned on one hand and the injury suffered by the Union industry on the other hand. There was a coincidence in time between the increase in volume and market share of the dumped imports and the deterioration of the Union industry’s performance, visible in particular as from 2023 onwards. In a contracting market, the increased volumes of dumped imports entering on prices undercutting the Union industry’s prices created a heavily price supressed environment and eroded the ability of the Union industry to set prices that would cover its cost of production. From this moment on, the Union industry lost its profitability and continued to be loss making until the end of the period considered.

• (232) The Commission distinguished and separated the effects of all known factors which were capable of affecting the situation of the Union industry from the injurious effects of the dumped imports: such as imports from other countries; export performance of the Union industry; cost increases; contraction in demand and captive use. The effect of these factors on the Union industry’s negative developments in terms of production, free market sales volume, sales prices and profitability were only limited, if any.

• (233) On the basis of 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. The injury consists of reduced market share, production, production capacity utilisation, productivity, profitability, cash flow, investments and return on investments. Furthermore, as explained in recitals 205 and 206, the Union industry suffered price suppression caused by imports from the country concerned.

6. LEVEL OF MEASURES

• (234) In the present case, the complainants claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation.

• (235) Thus, in order 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.

• (236) Then it examined whether the dumping margin of the sampled exporting producers would be higher than their injury margin.

6.1.   Underselling margin

• (237) 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.

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

• (239) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. During the period considered the Union industry was heavily loss making with the exception of 2021 and 2022 when it managed to realise a very modest profit margin or stay at breakeven respectively. Furthermore, for the years prior to the period considered, precise or appropriate levels of profitability could not be identified. In the complaint, the Union industry proposed as target profit the average profit rate obtained by one of the Union producers based on a sales contract with one of its customers. Given that this result was based on only one of the Union producers and limited to the contractual arrangements with one customer, the Commission considered that it cannot be representative of the profit the Union industry could achieve in the absence of dumped imports. The Commission therefore established the target profit to determine the non-injurious price at 6 %, in accordance with Article 7(2c) of the basic Regulation.

• (240) The Union Industry provided evidence that its level of investments, research and development and innovation during the period considered would have been higher under normal conditions of competition. The Commission verified this information during the on-spot verification by checking the company’s internal records related to investment plans and management decisions. The claims of the EU Industry were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R & D and innovation (‘IRI’) expenses under normal conditions of competition as provided by the EU Industry and verified by the Commission with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was less than 1 % for one of the sampled Union producers and between 1 %–2 % for the other one.

• (241) This percentage was added to the basic profit of 6 % mentioned in recital 239, leading to a target profit of 6 %–8 %.

• (242) On this basis, the non-injurious price is between [1 750 – 1 950 EUR/tonne], resulting from applying the above-mentioned profit margin of 6 %-8 % to the cost of production of the sampled Union producers during the investigation period.

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

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

• (245) The underselling margin for ‘other cooperating companies’ and for ‘all other imports originating in the People’s Republic of China’ is defined in the same manner as the dumping margin for these companies and imports.

Company	Dumping margin (%)	Underselling margin (%)
Chongqing Huafon Chemical Co., Ltd	28,6	47,1
Tangshan Zhonghao Chemical Co., Ltd	46,8	48,7
Other cooperating companies	32,0	47,4
All other imports originating in the People’s Republic of China	46,8	48,7

6.2.   Examination of the margin adequate to remove the injury to the Union industry

• (246) As explained in the Notice of Initiation, the complainants provided the Commission sufficient evidence that there are raw material distortions in the country concerned regarding the product under investigation. Therefore, in accordance with Article 7(2a) of the basic Regulation, this investigation examined the alleged distortions to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury.

• (247) However, as the margins adequate to remove injury were higher than the dumping margins, the Commission considered that, at this stage, it was not necessary to address this aspect. Following the above assessment the Commission concluded that it is appropriate to determine the amount of provisional duties in accordance with Article 7(2) of the basic Regulation.

6.3.   Conclusion on the level of measures

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

Company	Provisional anti-dumping duty
Chongqing Huafon Chemical Co., Ltd	28,6  %
Tangshan Zhonghao Chemical Co., Ltd	46,8  %
Other cooperating companies	32,0  %
All other imports originating in the People’s Republic of China	46,8  %

7. UNION INTEREST

• (249) The Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.

7.1.   Interest of the Union industry

• (250) During the period considered, there were four known producers of adipic acid across the Union (with one of them having two separate production plants). The complainants, composed of two producers covered over 60 % of the free market sales on the Union market. All Union producers cooperated with the investigation. The two Union producers, who were not the complainants, did not oppose the investigation.

• (251) The investigation showed that the Union industry suffered material injury caused by the dumped imports from the country concerned. During the period considered, the Union industry lost sales volumes and market share to the dumped Chinese imports. These imports significantly undercut the Union industry’s prices and exerted a strong price suppression, which in turn eroded the profitability of the Union industry as from 2023 and during the investigation period as elaborated in Section 5.

• (252) The imposition of measures would likely lead to the normalisation of price levels on the Union market. This would enable the Union industry to regain sales and market share and thus recover its production volumes and obtain healthy capacity utilisation rates, thereby decreasing its unit costs. The Union industry would also be able to sell at prices covering its costs and therefore recover from the injurious dumping.

• (253) In the absence of measures however, given the very aggressive pricing behaviour of the Chinese exporting producers and the huge spare capacities available in China, dumped imports would, in all likelihood, surge further on the Union market. Given the magnitude of injury already suffered, this would not only hamper the recovery of the Union industry but would render its situation outright untenable. As a result, without the measures, the survival of the Union industry could not be guaranteed and in all likelihood, it would be forced to cease operation in the foreseeable future.

• (254) It is therefore concluded that imposing measures on imports of adipic acid originating in China would be in the interest of the Union industry.

7.2.   Interest of unrelated importers and traders

• (255) One unrelated importer, LCM, agreed to cooperate and submitted a questionnaire reply. No comments or submissions were received from any other importer or trader.

• (256) LCM is a well-established trader of industrial chemical products with a stable customer basis predominantly located in Italy. During the investigation period sales of adipic acid corresponded to between 30 % and 40 % of its total turnover. In the same period, the volume of adipic acid imported by LCM from China represented between 7 % and 9 % of the total imports from China. Therefore, also considering the level of cooperation by users, the level of cooperation from the importers is considered medium.

• (257) LCM opposed the imposition of measures mainly for fear that it will hurt its customers, the users of adipic acid mostly producing coating resins and polyester polyols. LCM expressed concern that the price increase of adipic acid resulting from the duties will place its customers in an unfavourable position compared to integrated Chinese manufacturers providing the same products but obtaining adipic acid at lower prices from Chinese producers. LCM also contested that Chinese exporters were selling at dumped prices. In this respect, LCM considered that based on its knowledge, the prices paid by users for adipic acid originating in China and in the EU were the same if one considers customs duties (6,5 %) and customs clearance costs, transportation costs, handling and repackaging costs or additional costs due to ‘massaging’ or ‘crushing’ required for caked adipic acid that had spent months in transportation as well as the trader’s margin. After all these adjustments, LCM considered that the prices of the product concerned and the like product did not differ significantly. A similar claim was also made by one of the users, Allnex.

• (258) As regards the question of dumping, as explained in Section 3.6, the investigation found that all imports from China were sold at dumped prices. Concerning the price comparison as explained in recital 166 it was carried out based on the landed Chinese import price i.e. including all necessary adjustments and post importation costs. The undercutting margins thus found were significant, meaning that the Chinese imports were priced significantly lower than the like product offered by the Union industry. Furthermore, the Commission also provisionally concluded on the existence of price suppression as explained in recital 199.