02019R0159 — EN — 01.07.2022 — 007.005

This text is meant purely as a documentation tool and has no legal effect. The Union's institutions do not assume any liability for its contents. The authentic versions of the relevant acts, including their preambles, are those published in the Official Journal of the European Union and available in EUR-Lex. Those official texts are directly accessible through the links embedded in this document

Amended by:





Corrected by:









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COMMISSION IMPLEMENTING REGULATION (EU) 2019/159

of 31 January 2019

imposing definitive safeguard measures against imports of certain steel products







Article 1

1. Subject to Articles 6 and 7, a tariff quota is hereby opened in relation to imports into the Union of each of the 26 products categories concerned (defined by reference to the CN codes specified in relation to it in Annex I) and each of the periods specified in Annex IV.1 and IV.2.

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2. For each of the product categories concerned, and with the exception of product categories 8 and 25a, a part of each tariff-rate quota is allocated to the countries specified in Annex IV.

3. The remaining part of each tariff-rate quota, as well as the tariff-rate quota for product categories 8 and 25, shall be allocated on a first-come-first-served basis, based on a tariff-rate quota established equally for each quarter of the period of imposition.

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4. The drawings on each quarterly quota shall be stopped on the twentieth working day of the Commission following the end of the quarterly period. At the end of each quarter, the unused balances of the tariff-rate quota shall automatically be transferred to the next quarter. No unused balance at the end of the last quarter of each year of application of the definitive tariff-rate quota shall be transferred.

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5. Where the relevant tariff-rate quota under paragraph 2 is exhausted for one specific country, imports from that country for some product categories can be made under the remaining part of the tariff-rate quota for the same product category. This provision shall only apply during the last quarter of each year of application of the definitive tariff-rate quota. For product categories 5, 9, and 21 no further access to the remaining part of the tariff-rate quota will be allowed. For product categories 12, 13, 14, 16, 20 and 27 only access to a specific volume within the tariff-rate quota volume initially available in the last quarter, will be allowed. In product categories 1 and 4B no exporting country shall be allowed to use, on its own, more than 30 % of the residual tariff-rate quota volume initially available in the last quarter of each year of application of measures. For product categories 2, 3A, 3B, 4A, 6, 10, 15, 18, 19, 22, 24, 25B, 26 and 28 the access will be allowed over the total tariff-rate quota volume initially available in the last quarter in the respective product categories.

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6. Where the relevant tariff-rate quota is exhausted or where imports of the product categories do not benefit from the relevant tariff-rate quota, an additional duty at the rate of 25 %, applicable to the net, free-at-Union-frontier price, before duty, shall be applied on the product categories set out in Annex IV.1.

Article 2

1. The origin of any product to which this Regulation applies shall be determined in accordance with the provisions in force in the Union relating to non-preferential origin.

2. Unless otherwise specified, the provisions in force concerning customs duties shall apply. The default interest to be paid in case of reimbursement that gives rise to a right to payment of default interest shall be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union , in force on the first calendar day of the month in which the deadline falls, increased by one percentage point.

Article 3

The tariff-rate quotas set out in Article 1 shall be managed by the Commission and the Member States in accordance with the management system for tariff-rate quotas provided for in Articles 49 to 54 of Commission Implementing Regulation (EU) 2015/2447.

Article 4

The Member States and the Commission shall cooperate closely to ensure compliance with this Regulation.

Article 5

1. Subject to paragraph 2, imports of the 26 product categories specified in Annex IV originating in one of the countries specified in Annex III shall not be subject to the measures contained in Article 1.

2. For each of the 26 product categories specified in Annex IV, Annex III.2 specifies the originating countries which shall be subject to the measures set out in Article 1.

Article 6

1. Products originating in Norway, Iceland, and Liechtenstein shall not be subject to the measures set out in Article 1.

2. ►M8 ◄ Mozambique shall also not be subject to the measures set out in Article 1.

Article 7

Prior surveillance measures in force by means of Commission Implementing Regulation (EU) 2016/670 ( 1 ) shall be suspended for the products mentioned in Annex IV during the time of the imposition of safeguard measures set out in Article 1.

Article 8

During the period set out in Annexes IV.1 and IV.2 the Commission may review the measures in case of change of circumstances.

Article 9

Any amounts paid in respect of additional duties imposed pursuant to Implementing Regulation (EU) 2018/1013 in relation to the products specified in Annex IV of this Regulation shall be definitively collected at the level set in Article 1(3) of Implementing Regulation (EU) 2018/1013.

Article 10

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

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It shall apply until 30 June 2024

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









ANNEX I

Product concerned







Product Number Product category CN Codes 1 Non Alloy and Other Alloy Hot Rolled Sheets and Strips 7208 10 00 , 7208 25 00 , 7208 26 00 , 7208 27 00 , 7208 36 00 , 7208 37 00 , 7208 38 00 , 7208 39 00 , 7208 40 00 , 7208 52 10 , 7208 52 99 , 7208 53 10 , 7208 53 90 , 7208 54 00 , 7211 13 00 , 7211 14 00 , 7211 19 00 , 7212 60 00 , 7225 19 10 , 7225 30 10 , 7225 30 30 , 7225 30 90 , 7225 40 15 , 7225 40 90 , 7226 19 10 , 7226 91 20 , 7226 91 91 , 7226 91 99 2 Non Alloy and Other Alloy Cold Rolled Sheets 7209 15 00 , 7209 16 90 , 7209 17 90 , 7209 18 91 , 7209 25 00 , 7209 26 90 , 7209 27 90 , 7209 28 90 , 7209 90 20 , 7209 90 80 , 7211 23 20 , 7211 23 30 , 7211 23 80 , 7211 29 00 , 7211 90 20 , 7211 90 80 , 7225 50 20 , 7225 50 80 , 7226 20 00 , 7226 92 00 3 Electrical Sheets (other than GOES) 7209 16 10 , 7209 17 10 , 7209 18 10 , 7209 26 10 , 7209 27 10 , 7209 28 10 , 7225 19 90 , 7226 19 80 4 Metallic Coated Sheets 7210 20 00 , 7210 30 00 , 7210 41 00 , 7210 49 00 , 7210 61 00 , 7210 69 00 , 7210 90 80 , 7212 20 00 , 7212 30 00 , 7212 50 20 , 7212 50 30 , 7212 50 40 , 7212 50 61 , 7212 50 69 , 7212 50 90 , 7225 91 00 , 7225 92 00 , 7225 99 00 , 7226 99 10 , 7226 99 30 , 7226 99 70 5 Organic Coated Sheets 7210 70 80 , 7212 40 80 6 Tin Mill products 7209 18 99 , 7210 11 00 , 7210 12 20 , 7210 12 80 , 7210 50 00 , 7210 70 10 , 7210 90 40 , 7212 10 10 , 7212 10 90 , 7212 40 20 7 Non Alloy and Other Alloy Quarto Plates 7208 51 20 , 7208 51 91 , 7208 51 98 , 7208 52 91 , 7208 90 20 , 7208 90 80 , 7210 90 30 , 7225 40 12 , 7225 40 40 , 7225 40 60 8 Stainless Hot Rolled Sheets and Strips 7219 11 00 , 7219 12 10 , 7219 12 90 , 7219 13 10 , 7219 13 90 , 7219 14 10 , 7219 14 90 , 7219 22 10 , 7219 22 90 , 7219 23 00 , 7219 24 00 , 7220 11 00 , 7220 12 00 9 Stainless Cold Rolled Sheets and Strips 7219 31 00 , 7219 32 10 , 7219 32 90 , 7219 33 10 , 7219 33 90 , 7219 34 10 , 7219 34 90 , 7219 35 10 , 7219 35 90 , 7219 90 20 , 7219 90 80 , 7220 20 21 , 7220 20 29 , 7220 20 41 , 7220 20 49 , 7220 20 81 , 7220 20 89 , 7220 90 20 , 7220 90 80 10 Stainless Hot Rolled Quarto Plates 7219 21 10 , 7219 21 90 11 Grain-Oriented Electrical Sheet 7225 11 00 , 7226 11 00 12 Non Alloy and Other Alloy Merchant Bars and Light Sections 7214 30 00 , 7214 91 10 , 7214 91 90 , 7214 99 31 , 7214 99 39 , 7214 99 50 , 7214 99 71 , 7214 99 79 , 7214 99 95 , 7215 90 00 , 7216 10 00 , 7216 21 00 , 7216 22 00 , 7216 40 10 , 7216 40 90 , 7216 50 10 , 7216 50 91 , 7216 50 99 , 7216 99 00 , 7228 10 20 , 7228 20 10 , 7228 20 91 , 7228 30 20 , 7228 30 41 , 7228 30 49 , 7228 30 61 , 7228 30 69 , 7228 30 70 , 7228 30 89 , 7228 60 20 , 7228 60 80 , 7228 70 10 , 7228 70 90 , 7228 80 00 13 Rebars 7214 20 00 , 7214 99 10 14 Stainless Bars and Light Sections 7222 11 11 , 7222 11 19 , 7222 11 81 , 7222 11 89 , 7222 19 10 , 7222 19 90 , 7222 20 11 , 7222 20 19 , 7222 20 21 , 7222 20 29 , 7222 20 31 , 7222 20 39 , 7222 20 81 , 7222 20 89 , 7222 30 51 , 7222 30 91 , 7222 30 97 , 7222 40 10 , 7222 40 50 , 7222 40 90 15 Stainless Wire Rod 7221 00 10 , 7221 00 90 16 Non Alloy and Other Alloy Wire Rod 7213 10 00 , 7213 20 00 , 7213 91 10 , 7213 91 20 , 7213 91 41 , 7213 91 49 , 7213 91 70 , 7213 91 90 , 7213 99 10 , 7213 99 90 , 7227 10 00 , 7227 20 00 , 7227 90 10 , 7227 90 50 , 7227 90 95 17 Angles, Shapes and Sections of Iron or Non Alloy Steel 7216 31 10 , 7216 31 90 , 7216 32 11 , 7216 32 19 , 7216 32 91 , 7216 32 99 , 7216 33 10 , 7216 33 90 18 Sheet Piling 7301 10 00 19 Railway Material 7302 10 22 , 7302 10 28 , 7302 10 40 , 7302 10 50 , 7302 40 00 20 Gas pipes 7306 30 41 , 7306 30 49 , 7306 30 72 , 7306 30 77 21 Hollow sections 7306 61 10 , 7306 61 92 , 7306 61 99 22 Seamless Stainless Tubes and Pipes 7304 11 00 , 7304 22 00 , 7304 24 00 , 7304 41 00 , 7304 49 10 , 7304 49 93 , 7304 49 95 , 7304 49 99 23 Bearing Tubes and Pipes 7304 51 12 , 7304 51 18 , 7304 59 32 , 7304 59 38 24 Other Seamless Tubes 7304 19 10 , 7304 19 30 , 7304 19 90 , 7304 23 00 , 7304 29 10 , 7304 29 30 , 7304 29 90 , 7304 31 20 , 7304 31 80 , 7304 39 10 , 7304 39 52 , 7304 39 58 , 7304 39 92 , 7304 39 93 , 7304 39 98 , 7304 51 81 , 7304 51 89 , 7304 59 10 , 7304 59 92 , 7304 59 93 , 7304 59 99 , 7304 90 00 25 Large welded tubes 7305 11 00 , 7305 12 00 , 7305 19 00 , 7305 20 00 , 7305 31 00 , 7305 39 00 , 7305 90 00 26 Other Welded Pipes 7306 11 10 , 7306 11 90 , 7306 19 10 , 7306 19 90 , 7306 21 00 , 7306 29 00 , 7306 30 11 , 7306 30 19 , 7306 30 80 , 7306 40 20 , 7306 40 80 , 7306 50 20 , 7306 50 80 , 7306 69 10 , 7306 69 90 , 7306 90 00 27 Non-alloy and other alloy cold finished bars 7215 10 00 , 7215 50 11 , 7215 50 19 , 7215 50 80 , 7228 10 90 , 7228 20 99 , 7228 50 20 , 7228 50 40 , 7228 50 61 , 7228 50 69 , 7228 50 80 28 Non Alloy Wire 7217 10 10 , 7217 10 31 , 7217 10 39 , 7217 10 50 , 7217 10 90 , 7217 20 10 , 7217 20 30 , 7217 20 50 , 7217 20 90 , 7217 30 41 , 7217 30 49 , 7217 30 50 , 7217 30 90 , 7217 90 20 , 7217 90 50 , 7217 90 90









ANNEX II

II.1 — Growth in imports for the 26 product categories (in tonnes)







Product Number Product category 2013 2014 2015 2016 2017 MRP Growth MRP compared to 2013 1 Non Alloy and Other Alloy Hot Rolled Sheets and Strips 4 867 242 5 263 815 7 854 395 8 610 847 7 048 217 7 209 718 48 % 2 Non Alloy and Other Alloy Cold Rolled Sheets 1 837 875 1 906 067 2 761 337 2 007 299 2 463 937 2 463 941 34 % 3 Electrical Sheets (other than GOES) 266 355 284 376 279 777 312 647 377 744 433 526 63 % 4 Metallic Coated Sheets 1 855 325 2 203 135 2 688 830 3 924 906 5 019 132 4 637 052 150 % 5 Organic Coated Sheets 681 646 725 004 622 482 730 619 919 000 937 693 38 % 6 Tin Mill products 549 941 660 743 634 722 754 638 616 810 735 928 34 % 7 Non Alloy and Other Alloy Quarto Plates 1 439 430 1 968 634 2 573 220 2 834 744 2 549 694 2 374 170 65 % 8 Stainless Hot Rolled Sheets and Strips 157 197 213 885 247 090 326 631 407 886 408 468 160 % 9 Stainless Cold Rolled Sheets and Strips 645 004 954 179 697 199 753 058 869 091 972 415 51 % 10 Stainless Hot Rolled Quarto Plates 26 799 34 700 31 586 25 995 27 704 28 677 7 % 12 Non Alloy and Other Alloy Merchant Bars and Light Sections 942 999 1 265 397 1 233 328 1 429 511 1 419 973 1 792 392 90 % 13 Rebars 528 702 972 572 1 430 000 1 292 936 1 191 379 1 755 338 232 % 14 Stainless Bars and Light Sections 114 638 149 670 144 875 149 499 161 973 184 811 61 % 15 Stainless Wire Rod 52 068 71 209 57 542 58 659 63 022 69 786 34 % 16 Non Alloy and Other Alloy Wire Rod 1 107 169 1 267 308 1 694 707 2 001 322 2 093 877 2 354 164 113 % 17 Angles, Shapes and Sections of Iron or Non Alloy Steel 222 797 274 863 267 851 387 353 262 759 373 732 68 % 18 Sheet Piling 15 871 16 497 14 051 36 683 84 549 83 502 426 % 19 Railway Material 14 587 25 532 23 202 12 494 18 232 23 013 58 % 20 Gas pipes 275 378 349 078 314 471 354 261 401 410 445 569 62 % 21 Hollow sections 485 038 578 426 602 190 757 274 862 889 956 360 97 % 22 Seamless Stainless Tubes and Pipes 42 417 55 590 54 948 51 614 49 593 49 781 17 % 24 Other Seamless Tubes 440 696 509 052 448 761 448 333 410 822 480 600 9 % 25 Large welded tubes 295 502 418 808 218 549 171 512 1 053 049 720 886 144 % 26 Other Welded Pipes 462 137 484 915 494 914 526 634 551 764 558 457 21 % 27 Non-alloy and other alloy cold finished bars 446 086 514 066 479 271 454 924 454 921 501 232 12 % 28 Non Alloy Wire 555 798 700 560 683 041 726 158 714 480 762 600 37 %

II.2 — Growth in imports for the 2 product categories (in tonnes)







Product Number Product category 2013 2014 2015 2016 2017 MRP Growth MRP compared to 2013 11 Grain-Oriented Electrical Sheet 114 388 112 258 101 737 109 518 99 917 106 570 – 7 % 23 Bearing Tubes and Pipes 7 475 8 998 8 337 7 035 6 137 6 265 – 16 %









ANNEX III

III.1 — List of developing countries, members of the WTO

Afghanistan, Albania, Angola, Antigua and Barbuda, Argentina, Armenia, Bahrain, Bangladesh, Barbados, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cabo Verde, Cambodia, Cameroon, Central African Republic, Chad, Chile, China, Colombia, Congo, Costa Rica, Côte d'Ivoire, Cuba, Democratic Republic of the Congo, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Eswatini, Fiji, Gabon, Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, India, Indonesia, Jamaica, Jordan, Kazakhstan, Kenya, Kuwait, Kyrgyz Republic, Lao People's Democratic Republic, Lesotho, Liberia, Macao, Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Mexico, Moldova, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, Nicaragua, Niger, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Qatar, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Saudi Arabia, Senegal, Seychelles, Sierra Leone, Solomon Islands, South Africa, Sri Lanka, Suriname, Tajikistan, Tanzania, Thailand, Former Yugoslav Republic of Macedonia, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Arab Emirates, Uruguay, Vanuatu, Venezuela, Vietnam, Yemen, Zambia, Zimbabwe.

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III.2 — List of product categories originating in developing countries to which the definitive measures apply







List of product categories originating in developing countries to which the definitive measures apply Country / Product group 1 2 3A 3B 4A 4B 5 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 24 25A 25B 26 27 28 Brazil X X X China X X X X X X X X X X X X X X X X X X X X X Egypt X X X India X X X X X X X X X X X X X X X X Indonesia X X X X X Kazakhstan X X X Moldova X X X X X North Macedonia X X X X X X South Africa X X X X X Tunisia X X Turkey X X X X X X X X X X X X X X X X X X X X Ukraine X X X X X X X X X X X X X X X X United Arab Emirates X X X X X X Vietnam X X X X X X X X All other developing countries X X









ANNEX IV

IV.1 – Volumes of tariff–rate quotas





IV.2 – Volumes of global and residual tariff–rate quotas per trimester







Product Number Allocation by country (Where Applicable) Year 2 Year 3 From 1.7.2022 to 30.9.2022 From 1.10.2022 to 31.12.2022 From 1.1.2023 to 31.3.2023 From 1.4.2023 to 30.6.2023 From 1.7.2023 to 30.9.2023 From 1.10.2023 to 31.12.2023 From 1.1.2024 to 31.3.2024 From 1.4.2024 to 30.6.2024 Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) Volume of tariff quota (net tonnes) 1 Other countries 900 290,25 900 290,25 880 718,72 890 504,48 933 743,65 933 743,65 923 594,27 923 594,27 2 Other countries 321 824,43 321 824,43 314 828,25 318 326,34 333 782,94 333 782,94 330 154,85 330 154,85 3A Other countries 817,65 817,65 799,87 808,76 848,03 848,03 838,81 838,81 3B Other countries 8 303,99 8 303,99 8 123,47 8 213,73 8 612,56 8 612,56 8 518,94 8 518,94 4A Other countries 454 338,51 454 338,51 444 461,58 449 400,05 471 221,03 471 221,03 466 099,06 466 099,06 4B Other countries 100 848,08 100 848,08 98 655,73 99 751,91 104 595,44 104 595,44 103 458,53 103 458,53 5 Other countries 41 252,54 41 252,54 40 355,75 40 804,14 42 785,42 42 785,42 42 320,36 42 320,36 6 Other countries 35 715,05 35 715,05 34 938,63 35 326,84 37 042,16 37 042,16 36 639,53 36 639,53 7 Other countries 554 571,27 554 571,27 542 515,37 548 543,32 575 178,29 575 178,29 568 926,35 568 926,35 8 Other countries 105 581,29 105 581,29 103 286,04 104 433,67 109 504,53 109 504,53 108 314,26 108 314,26 ▼C1 9 Other countries 63 645,29 63 645,29 62 261,69 62 953,49 66 010,25 66 010,25 65 292,75 65 292,75 ▼M9 10 Other countries 1 002,95 1 002,95 981,14 992,04 1 040,21 1 040,21 1 028,91 1 028,91 12 Other countries 58 414,15 58 414,15 57 144,27 57 779,21 60 584,73 60 584,73 59 926,20 59 926,20 13 Other countries 132 668,90 132 668,90 129 784,79 131 226,85 137 598,67 137 598,67 136 103,03 136 103,03 14 Other countries 4 956,51 4 956,51 4 848,76 4 902,63 5 140,68 5 140,68 5 084,81 5 084,81 15 Other countries 773,87 773,87 757,04 765,46 802,62 802,62 793,90 793,90 16 Other countries 116 864,97 116 864,97 114 324,43 115 594,70 121 207,50 121 207,50 119 890,02 119 890,02 17 Other countries 64 947,85 64 947,85 63 535,94 64 241,90 67 361,21 67 361,21 66 629,03 66 629,03 18 Other countries 274,44 274,44 268,47 271,45 284,63 284,63 281,54 281,54 19 Other countries 759,42 759,42 742,91 751,17 787,64 787,64 779,08 779,08 20 Other countries 10 690,62 10 690,62 10 458,21 10 574,41 11 087,86 11 087,86 10 967,34 10 967,34 21 Other countries 19 871,64 19 871,64 19 439,65 19 655,65 20 610,04 20 610,04 20 386,02 20 386,02 22 Other countries 2 586,28 2 586,28 2 530,05 2 558,16 2 682,38 2 682,38 2 653,22 2 653,22 24 Other countries 43 742,37 43 742,37 42 791,45 43 266,91 45 367,77 45 367,77 44 874,64 44 874,64 25A Other countries 115 747,59 115 747,59 113 231,34 114 489,47 120 048,60 120 048,60 118 743,72 118 743,72 25B Other countries 6 251,05 6 251,05 6 115,16 6 183,11 6 483,33 6 483,33 6 412,86 6 412,86 26 Other countries 19 298,91 19 298,91 18 879,37 19 089,14 20 016,03 20 016,03 19 798,47 19 798,47 27 Other countries 30 366,43 30 366,43 29 706,29 30 036,36 31 494,80 31 494,80 31 152,46 31 152,46 28 Other countries 47 545,89 47 545,89 46 512,29 47 029,09 49 312,63 49 312,63 48 776,62 48 776,62

IV.3 – Maximum volume of residual quota accessible in last quarters to countries with a country specific quota







Product category New alocated quota in tonnes From 1.4.2023 to 30.6.2023 From 1.4.2024 to 30.6.2024 1 Special regime Special regime 2 318 326,34 330 154,85 3.A 808,76 838,81 3.B 8 213,73 8 518,94 4.A 449 400,05 466 099,06 4.B Special regime Special regime 5 No access to the residual quota in Q4 No access to the residual quota in Q4 6 35 326,84 36 639,53 7 Not applicable Not applicable 8 Not applicable Not applicable 9 No access to the residual quota in Q4 No access to the residual quota in Q4 10 992,04 1 028,91 12 22 671,97 23 514,42 13 53 215,94 55 193,36 14 3 652,73 3 788,46 15 765,46 793,90 16 18 138,68 18 812,69 17 Not applicable Not applicable 18 271,45 281,54 19 751,17 779,08 20 960,89 996,60 21 No access to the residual quota in Q4 No access to the residual quota in Q4 22 2 558,16 2 653,22 24 43 266,91 44 874,64 25.A Not applicable Not applicable 25.B 6 183,11 6 412,86 26 19 089,14 19 798,47 27 4 699,24 4 873,85 28 47 029,09 48 776,62

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ANNEX V

Attractiveness of Union market

(1) In its original determination, the Commission explained that the Union steel market was attractive for imports in terms of size and prices ( 2 ). In this respect, according to OECD data ( 3 ), in the years prior to the initiation of the investigation that led to the imposition of a safeguard measure, the Union market was the largest importing territory in terms of volumes, accounting from 13,8 % to 18,4 % of the global share of imports throughout this period.

(2) In addition to the volumes, the Union market was also very attractive in terms of prices. In fact, an analysis of the relevant data ( 4 ) showed that the main steel exporting countries to the Union achieved, for a large proportion of their exports (from 46 % to 78 % of the CN codes concerned), a higher price in the Union market as compared to the export prices achieved in other third markets for the same CN codes. For these countries, the Union market also represented an important share of their exports, being the main or among their main export destinations, in some cases reaching more than 25 % share and even reaching 32 % in a given year ( 5 ).

(3) The attractiveness of the Union market was also confirmed by the fact that while the main steel exporting countries ( 6 ) were reducing exports to third countries, they were increasing their exports to the Union at a fast pace. In particular, exports to other third countries from these origins decreased by more than 11 million tonnes (-8 %) in 2018 ( 7 ) when compared to 2017 ( 8 ). On the other hand, in the same period, imports into the Union from these origins increased by more than 3 million tonnes (+14 %) ( 9 ). These opposite trends showed that while imports to other third countries decreased generally, in a context of increasing overcapacity and increased restriction to access markets worldwide (see Sections 1.1.1 and 1.1.2 below), and in the absence of any major positive developments in their domestic consumption, exporting producers seized the opportunity to dispose of ever larger volumes into the Union market.

(4) Therefore, the above set of data shows that, unequivocally, the Union market was attractive for exporting producers in terms of both volumes and prices.

1. ANALYSIS

1.1. Increased imports as a result of unforeseen developments

(5) The subsections below thus provide with additional information and a more detailed explanation linking each of the unforeseen developments identified with the increase in imports that took place, thereby supplementing the original findings.

1.1.1. Increase of imports to the Union due to global overcapacity in the steel sector

(6) In the original determination, the Commission established that overcapacity existed in the steel sector and that despite efforts aiming to reduce it; it had nevertheless increased over the period of investigation ( 10 ).

(7) Several sources have consistently confirmed the direct link between excess capacity in the steel sector and its effects on exports. For instance, the OECD noted, ‘Excessive levels of steelmaking capacity have important implications for the steel industry, often associated with over-supply, low prices, and weak profitability’ ( 11 ). It also noted that ‘At the global level, the effects of excess capacity are transmitted through trade; excess capacity can lead to export surges, leading to price declines and market share losses for import-competing domestic producers’ ( 12 ).

(8) Similarly, other studies point into the same direction. A 2014 ‘Economic Policy Institute’ paper ( 13 ), which noted, “Excess capacity means that steel production facilities have the capacity to produce much more steel than the market demands. High fixed costs, capital intensity, and the large scale of steelmaking encourages to export the surplus at below-market rates. […] ‘Excess capacity leads to overproduction and surges of exports’ and that ‘[t]he high capital intensity of the industry leads producers to maximize production to cover fixed costs, and this in turn leads them to dump excess production on foreign markets—particularly the attractive U.S. market—when domestic demand lags. This has led to repeated surges in unfairly traded steel over the years.’

(9) In the same vein the European Commission, in a 2016 Communication, also stated, ‘The excess production of steel has recently led to a dramatic increase of exports, the destabilisation of global steel markets and depression of steel prices world-wide.’ ( 14 ).

(10) Therefore, there is a generally accepted economic rationale explaining the action of exporting producers of offloading their excess capacity into third country markets (usually at lower prices) to at least contribute to covering part of their costs.

(11) The Commission then assessed in further detail the direct link between the confirmed existing (and increasing) overcapacity in the steel sector, and the increase of imports into the Union.

(12) In a situation of overcapacity, and having an incentive to offload their excess capacity, exporting producers would target those markets which allow them to sell, in principle, higher volumes at, ideally, better prices (as compared to other third markets). In this respect, the Commission explained in recitals (1) to (4) that the Union was an attractive market for exporting producers both in terms of size and price levels. The import data available also showed that imports into the Union had increased rapidly and in great volumes in the period where overcapacity was also increasing ( 15 ) and that they did it at much faster pace than Union consumption ( 16 ), and it also showed that imports to the Union continued to increase while the trend of exports to other third countries was the opposite. In addition, data in the Provisional Regulation showed that exporting producers were consistently undercutting Union producers (in some cases significantly), showing their determination to remain benefiting from the attractive conditions of the Union market ( 17 ). The magnitude and pace of imports into the Union at consistently lower prices than those of the Union industry, in a context of a much slower consumption growth, could have hardly been reasonably explained in the first place if it were not for a context of increasing overcapacity, which was at the core of exporting producers’ behaviour.

(13) Accordingly, the Commission concluded that imports into the Union increased as a result of overcapacity in the steel sector in the original period of investigation.

1.1.2. Increase of trade defence measures and trade restrictive measures in third countries

(14) In recitals (33) and (34) of the Provisional Regulation, the Commission explained that there had been a significant increase in the use of trade defence instruments in the steel sector in particular in the years prior to the initiation of the EU safeguard investigation. The Provisional Regulation stated that ‘whereas during 2011-2013 on average around 77 steel-related investigations had been initiated per year, during 2015-2016 this average increased to 117’. Furthermore, third countries continued throughout 2017 to impose trade restrictive measures ( 18 ).

(15) In overall terms, the Commission observed from the data ( 19 ) it analysed that more than 300 trade defence measures on steel products ( 20 ) had been imposed in the period 2013-2017.

(16) A breakdown of these figures revealed that these measures had been imposed by a large number of countries (at least 24 jurisdictions), and among them, all the main steel importing countries ( 21 ). These countries had imposed 157 measures in the period 2013-2017, i.e. more than 52 % of the total.

(17) At the same time, the top exporting countries to the Union were, in this period, subject to a large amount of measures in numerous jurisdictions. Taking as an example the top seven exporters to the Union ( 22 ), the Commission observed that they were subject to around 200 measures, this is, around 66 % of the total measures in place in at least 24 different third countries.

(18) Therefore, the Commission confirmed that the magnitude of the TDI measures, in terms of number of individual measures and countries affected (both imposing and subject to the measures) was very significant. The Commission further noted that data on the original file suggested that these figures could be even rather conservative ( 23 ). In addition, the duties imposed pursuant to those measures appeared to be sufficiently high to impact the level of imports entering those markets as compared to the period before these measures were in place. This was reflected in an overall decrease in exports from countries subject to TDI measures into third markets (see recital (19)), despite the fact that the overall market conditions had not changed significantly ( 24 ) and thus would not, in principle, justify a reduction of volumes exported of such magnitude if it was not for the effects of the level of the measures.

(19) In this respect, the Commission confirmed based on the data analysed that a common effect of the imposition of trade defence measures was the reduction (in many cases significant) of imports into the countries subject to measures in the period subsequent to their imposition. In this regard, the Commission observed that, based on an analysis of its own TDI investigations on steel products ( 25 ), imports decreased on average by up to 82 % when compared to the level of imports in the investigation period that lead to the imposition of measures. In those cases, the volumes of imports affected were significant ( 26 ). The Commission also confirmed that TDI measures on steel had a similar effect when imposed by third countries. In a sample of 26 cases assessed ( 27 ), the Commission confirmed that the reduction of imports was on average 73 %, and that the volumes affected were also relevant ( 28 ). Therefore, the imposition of TDI measures by third countries reduced the volume of exports to those countries, which were, at least partially, directed to the Union market.

(20) Furthermore, another set of data showing the clear connection between the increasing number of trade defence measures in third countries and the increase in imports into the Union market is the opposing trends of exports of the main steel exporting countries to the Union explained in recital (3) ( 29 ). In view of the large amount of trade defence measures imposed by third countries and the effects they have on the volumes of imports into the countries imposing a measure (as detailed in recitals (18) and (19)), this trend confirms that their ability to export to third countries was significantly curtailed. Therefore, they sought to dispose of these additional volumes (also affected by overcapacity) into the attractive Union market, which as a result experienced a consistent increase in imports over the same period, at a pace substantially higher than the evolution of consumption.

(21) The graph below ( 30 ) illustrates these trends.

(22) The Commission also observed that the overall steel consumption did not see any major reduction in that period that would explain such a decrease in exports to third countries. Hence, the reduction of exports to other third countries could only be reasonably explained by the limiting effect of the wide array of TDI measures or other trade restrictive measures imposed by a large number of jurisdictions.

(23) Accordingly, the Commission concluded that the increase in TDI and other trade restrictive measures across third countries had resulted in increased imports into the Union during the period considered.

1.1.3. US Section 232 measure

(24) In recitals (58) to (61) of the Definitive Regulation the Commission explained the link between the US Section 232 measures and the increase of imports into the Union. In addition, in recitals (101) to (110) of the Definitive Regulation, the Commission also assessed the evolution of imports into both the Union and US markets ( 31 ).

(25) Because the data assessed to determine an increase in imports stopped at the end of June 2018 (end of Most Recent Period or ‘MRP’), it covered import trends into the Union and into the US for a relatively short period after the US Section 232 came into effect. Nevertheless, as explained in recital (58) of the Definitive Regulation, the investigation leading to the US measure had already been initiated in April 2017 and the report setting the basis for the later adoption of the measure was published in January 2018, and hence the first signs of trade diversion were already identified.

(26) The data showed that while during the first half of 2018 imports into the US decreased by almost 1 million tonnes (-7 %) when compared to the same period in 2017, imports into the Union followed an almost identical opposite trend, with an increase in imports of 1,2 million tonnes (+7 %).

(27) This trend is explained because the main steel exporting countries to the Union also exported relevant volumes to the US market. While export volumes to the US were decreasing (as a result of the effects of the 25 % duty under the US Section 232), the volume of exports of some of these countries to the Union increased in parallel. Furthermore, and as explained in recital (3) above, exports from these countries into other third markets generally decreased.

(28) Therefore, the impossibility to export in the same amounts to the US after the US Section 232 measure entered into force put exporting countries in a situation where they were forced to seek other outlets for their steel. In this case, because the Union market was very attractive in terms of size and prices compared to other third markets, it was a natural target for exporting countries and this resulted in increased imports, notably from origins who lost export volumes to the US. These trends are shown in the graphs below ( 32 ).

(29) In view of these facts, the Commission confirmed that the increase in imports into the Union that took place in the period of investigation was the result (together with the other unforeseen developments established) of the US Section 232 measure.

Cumulative assessment

(30) The Commission also concluded that the increase in imports occurred as a result of the combination of all the identified unforeseen developments (global overcapacity, increase of trade defence measures and trade restrictive measures in third countries and the US Section 232 measure). The existence of several unforeseen developments at the same time reinforces the finding of a logical connection between the increase in imports into the Union, which was an attractive and major market for steel exports, and the identified unforeseen developments.

1.2. Threat of serious injury

(31) The original determination established that if the Union did not impose a safeguard measure, there was a threat of serious injury for the domestic producers as imports were expected to continue increasing, notably due (but not limited) to trade diversion originating in the US Section 232 measure, and thus to add import pressure in terms of price and volumes ( 33 ). This section of the Regulation will develop in further detail why a threat of serious injury existed and was well founded in light of the evidence available at the time of the imposition of the definitive measure. To do so, this section of the Regulation will provide additional explanations and clarifications on the following aspects leading to the finding of a threat of serious injury: i) situation of the Union industry and reasons explaining its partial recovery in 2017; ii) role of EU TDI measures in the situation of the Union industry; iii) impact of US Section 232 measure – including recent import evolution into the Union; iv) most recent evolution of steel and raw material prices; v) state of play of TDI measures in third countries and overcapacity; vi) market outlooks and forecasts.

Continuous attractiveness of the Union market

(32) In recitals (1) to (4) above, the Commission explained how the Union market was attractive in terms of size and prices and how these features contributed to an increasing amount of imports into the Union market in the period of investigation.

(33) The Commission’s considered that these features remained the same at the end of the investigation that led to the imposition of the definitive safeguard, confirming that in 2018, the Union market continued to be an attractive market in terms of size ( 34 ) and prices. The main steel exporting countries to the Union achieved a higher price in the Union market as compared to the export prices achieved in other third markets for 48 % to 81 % of the CN codes concerned ( 35 ). Thus confirming the continuous attractiveness in terms of prices. Regarding size, the Union continued to be a relevant export market, representing for some exporting countries almost 40 % and for some of them around 25 % of their total exports, depending on the exporting country ( 36 ).

(34) Furthermore, the Commission concluded that there were no elements among the data assessed, including submissions from interested parties, indicating that the Union market would become any less attractive in the near future. In fact, as shown in this Annex (see as an example subsections 1.2.3 and 1.2.5 below) there was an increasing lack of alternative outlets where exporting producers could reach the same or similar volumes of exports as they did in the past, and as a result the import pressure on the attractive Union market would increase even further.

1.2.1. Situation of the Union industry and factors explaining its partial recovery in 2017

(35) Section VI.1 of the Provisional Regulation and Sections 5.1 to 5.3 of the Definitive Regulation explained the situation of the Union industry at the end of the period analysed, and the evolution of the injury indicators since 2013, concluding that Union industry was in a fragile and vulnerable position.

(36) The finding of vulnerability despite a partial improvement in 2017, was explained by a number of factors that allowed the Union industry to reach, only in 2017, overall healthier levels of profitability than in previous years despite continuous increasing imports ( 37 ).

(37) First, the profitability of the Union industry throughout the period analysed showed a generally poor performance, incurring losses (2013) or achieving very low level of profits (2014-2016). While in 2017 the industry achieved for the first time in a period of five years a healthier level of profitability, this did not reach a magnitude that would make up for the previous performance over a four-year period. Even on that year, for a large number of product categories, profitability remained low. Three product categories remained loss making and 13 product categories close to break-even. Only seven product categories could recover to a level of profit above 6 % in 2017 ( 38 ). In this respect, a key different factor in 2017 related to the evolution and level of its unit sales prices and the difference with the cost of production compared with that of previous years. Regarding the price, in 2017 it increased by around 18 % with respect to the previous year (106 EUR/tonne increase). At the same time, even if the cost of production also increased in that year (by 82 EUR/tonne compared with the previous year) ( 39 ), the Union industry was able to achieve the biggest (positive) margin between the two in the period analysed (36 EUR/tonne), which resulted in higher profitability ( 40 ). However, this exceptional ( 41 ) situation was, according to the most recent developments analysed in the investigation not expected to be of a long-lasting nature and there were clear trends showing that it was already reversing (see Section 1.2.4).

(38) Second, while the Union industry was able to increase its volume of sales in overall terms by 7 % in 2017 when compared to 2013 ( 42 ), contributing to improving partially its performance in that year, it was clearly unable to fully benefit from a much higher increase in consumption in the same period (+14 %) ( 43 ) in the Union market although it continued to have sufficient capacity available in 2017 (76 % in 2017 of capacity utilisation compared to 75 % in 2016) ( 44 ) to increase its domestic sales further. It is noteworthy that the Union industry barely improved its capacity utilisation in 2017 compared with the previous year. Such suppressed performance could be explained by the significant increasing import pressure (in terms of volumes and prices) that the Union industry suffered in the period assessed. In fact, imports benefitted to a much larger extent than Union producers from the increase in consumption. While Union producers lost market share consistently year-on-year (from 87,2 % to 81,9 %) ( 45 ) imports experienced a drastic increase (+71 %) ( 46 ), representing an increase in their market share from 12,7 % in 2013 to 18,8 % in 2017 ( 47 ). The market share of imports in the MRP was 18,8 %, which was even higher than in 2017 (18,1 %). These trends could be explained by the consistent undercutting of imports ( 48 ), which thus prevented the Union industry from realising either the full (or at least a greater) potential of market developments.

(39) Third, while market conditions overall improved (with increased consumption, domestic sales and price levels), the Union industry was still unable to translate this into more employment, which had suffered the loss of nearly 10 000 workers in the Union in the period 2013-2017 ( 49 ). In 2017 employment level even decreased very slightly compared to 2016. Lastly, stocks grew by 19 % over the investigation period and remained high in 2017 ( 50 ).

(40) Therefore, the Union industry improved partially its performance in 2017 as a result of a combination of factors, notably the increase in consumption and of domestic sales and the higher difference between steel and raw material price ( 51 ) but this improvement was nevertheless limited by the degree of import pressure suffered in that year, which did not allow the Union industry to benefit to a greater extent from such existing factors. The continuous loss of market share and the persistent undercutting across product categories, or the jobs that it was not able to recuperate, were clear signs that its situation was not that of an industry that had fully recovered from the effects of previous negative performances in previous years, and that import pressure was playing a key role in impeding such recovery.

(41) Since some of these factors that developed positively in 2017 were reversing in 2018 (see below latest developments and expected performance for steel and raw material prices, as well as expected trends in consumption) in a situation where import pressure was expected to increase in terms of volumes and prices, the impact on the financial situation of the Union industry would be negative.

(42) In other words, while the Union industry was able partially recover due to the cumulated positive developments of a series of key factors in the market and to slower increase of imports in 2017 compared with previous years ( 52 ), the negative turn that most of these factors were showing at the end of 2018 would necessarily result in a worsening of the Union industry’s situation against the ongoing further increase of import pressure, which this time, due to its magnitude and the expected prevailing market context, the Union industry would not be able to sustain. As a result, the situation of the Union industry at the end of the investigation period was that of vulnerability to a further surge in imports.

1.2.2. Role of Union TDI measures in the situation of the Union industry in 2017

(43) In this Section the Commission provides the necessary additional explanations and supporting data regarding the role played by TDI measures on the partial recovery of the Union industry in 2017.

(44) In the first place, to carry out this exercise, the Commission selected those measures imposed in the years 2015 and 2016 because the Commission considered that those would be the measures whose effects on the Union industry’s performance in 2017 could be partially attributed to ( 53 ). Therefore, under these parameters, prior to 2017 the Commission had imposed six TDI measures on imports from product categories which were subsequently subject to the safeguard measure ( 54 ).

(45) These measures were the following ( 55 ): Commission Implementing Regulation (EU) 2015/501 ( 56 ), Commission Implementing Regulation (EU) 2016/181 ( 57 ), Commission Implementing Regulation (EU) 2016/1778 ( 58 ), Commission Implementing Regulation (EU) 2016/113 ( 59 ), Commission Implementing Regulation (EU) 2016/1777 ( 60 ) and Commission Implementing Regulation (EU) 2017/969 ( 61 ).

(46) The Commission observed that the profitability of Union producers in these product categories systematically improved in the year following the imposition of measures. In particular, the Commission found that, in 2017, profitability generally improved ( 62 ), although for a large number of category products profitability remained low, in particular for the product categories subject to recent TDI measures, and that import prices of third countries (other than those subject to the TDI measures in question) generally increased temporarily in 2017 following the imposition of the TDI measures ( 63 ).

(47) Furthermore, the volumes affected by the recent trade defence measures represented around 40 % of total imports within the product categories subject to recent TDI measures in the period considered ( 64 ) and in the years following the imposition of those TDI measures their volumes in the Union market went down by more than 90 % ( 65 ). Therefore, the substantial reduction of unfair traded imports that ensued the imposition of measures generally allowed Union producers and other exporting countries to increase their sales prices in 2017.

(48) Moreover all product categories subject to recent trade defence measures experienced a significant improvement in profitability ( 66 ), several of which exceeded 6 % in 2017 ( 67 ). For the rest of categories, the picture was more diverse, with few categories exceeding or reaching close to 6 % profitability ( 68 ), other categories improving but still showing weak or low profitability levels ( 69 ), and others loss-making or around 1 % profitability ( 70 ), irrespective of the recent trends. Thus showing that the picture in terms of evolution of profitability was not homogeneous among categories and that in overall terms, most categories ( 71 ) were, in 2017, either loss making or with unhealthy levels of profitability, even if their situation had improved in some cases as compared to the previous year. Thus confirming the fragility of the overall situation of the Union industry despite the situation being better than the preceding year.

(49) However, as explained below, the trend of increasing pricing in 2017 was temporary and started reversing in 2018 when the Union was faced with a surge in imports mainly from third countries not subject to trade defence measures and the trade diversion caused by the US Section 232 measure. This is shown by the volume of imports in the MRP that reached a record figure of 31 314 tonnes despite the imposition of recent trade defence measures in some product categories. This showed that while recent TDI measures contributed to the partial and temporary improvement of the Union industry, they also benefitted those exporting countries not subject to measures, which had also started to increase significantly their presence in the Union market ( 72 ).

(50) Hence, the Commission confirmed that the imposition of TDI measures contributed to the overall performance of Union producers, insofar as these categories were concerned ( 73 ).

(51) In addition, the reasoning in sections 1.2.1 and 1.2.2 clearly showed that some factors explaining the partial recovery of the Union (e.g. consumption) did not affect or benefit Union producers and exporting countries equally or similarly, as the latter were able to increase greatly (+71 % in volumes) their presence in the Union market at the expense of Union producers which lost market share, and only saw a relatively modest increase in overall sales volumes (+7 %) when compared to the continuous growth of imports.

1.2.3. Impact of US Section 232 measure

(52) In the Definitive Regulation ( 74 ) the Commission reached the conclusion that the US Section 232 would be liable of significant trade diversion into the Union market.

(53) In this respect, the Commission has conducted a more detailed analysis of the import patterns into the Union and the USA, both in overall terms and then further analysing the behaviour of certain exporting countries. This analysis showed that when comparing the imports into the US and into the Union in the first half of 2018 with the first half of 2017, imports into the US decreased by almost 1 million tonnes (-7 %) when compared to the same period in 2017, imports into the Union followed an almost identical opposite trend, with an increase in imports of 1,2 million tonnes (+7 %) (See recital (26) above). When assessing the developments in the second half of 2018 and the same period in 2017, these opposing trends become more acute. In fact, imports into the US decreased by 2,4 million tonnes (-19 %) while imports into the Union increased by more than 2 million tonnes (+15 %) ( 75 ).

(54) This resulted in an overall yearly reduction of imports into the US of 3,3 million tonnes (-13 %) and an increase of imports into the Union of 3,2 million tonnes (+11 %), out of which 72 % of the total volumes reduced into the US and 63 % of the imports increase in the Union took place in the second half of 2018 ( 76 ).

(55) Therefore, the pace and magnitude at which these trends of imports accelerated in the second half of 2018 showed that the impact of the US Section 232 measure was taking progressively more effect as it had been in place already for a few months, and that exporting countries were rapidly adjusting to the new market situation ( 77 ).

(56) Zooming in into the behaviour of exporting countries to both the US and EU market, the Commission confirmed this trend. For instance, countries like Türkiye, Russia, South Korea and Taiwan ( 78 ), which accounted for significant volumes of exports to the US and to the Union, saw the following trends in 2018 when compared to 2017: Türkiye decreased its exports to the US by around 850 000 tonnes (-45 %) and it increased its exports to the Union by 2,6 million tonnes (+56 %). Similarly, Russia’s exports to the US went down by more than 250 000 tonnes (-36 %) and increased by 870 000 tonnes (+23 %) in the Union, South Korea’s exports to the US decreased by more than 880 000 tonnes (-27 %) while increasing in the Union by around 250 000 tonnes (+8 %), and lastly Taiwan’s exports to the US went down by around 160 000 tonnes (-14 %) while increased by more than 500 000 tonnes (+40 %) in the Union ( 79 ).

(57) Therefore, these figures showed that exporting producers were generally able to ship, at least part of the volumes lost in the US, to the Union market, and in some cases to increase their presence in the Union market well above the volumes lost in the US. Given the size of the US market ( 80 ), the fact that the US Section 232 measure was still in its first months of application and hence had not yet reached its full intended effects ( 81 ), it was reasonable to expect that the exports to the US would continue to decrease in significant volumes and that exporting producers would be able to adapt to these circumstances and increase their presence in the Union market even further.

(58) Therefore, the Commission confirmed that the US Section 232 measure was liable to cause an even greater trade diversion of exports into the Union market in the near future.

1.2.4. Most recent evolution of steel and raw material prices

(59) In the Definitive Regulation the Commission noted that ‘steel prices in the Union started to follow a declining trend since the third quarter of 2018’ ( 82 ).

(60) In this respect the Commission observed in section 1.2.1 above, that one of the factors that explained a partial improvement in the Union industry’s performance in 2017 was that the difference between steel price and raw material cost was higher than in any of the previous years of the period analysed. However, a further detailed analysis of the most recent developments prior to the imposition of a definitive measure showed that the trend was reversing and that the positive difference between the two was squeezing progressively, and therefore that would have a negative impact on the economic performance of the Union industry.

(61) As shown in the graph 4 below ( 83 ), steel prices in the Union saw a steady decline in the second half of 2018. This trend could be expected to continue in light of the uncertain market prospects (see Section 1.2.6) and as a result of the continuous and increasing import pressure in terms of volumes and prices, which against a worsening or uncertain market conditions, would likely have a downwards effect on prices, thus not allowing Union industry to adapt its prices to the increased costs. In the graph 5 ( 84 ) it is observed how the price of some of the main steelmaking raw materials were increasing constantly over the same period.

(62) Therefore, such combined trends, for which there were no signs of reversal in the near future, would put the Union industry in an even more strained financial situation.

(63) In addition, the Commission considered that in a likely scenario of further import pressure and in a market that was not to experience any significant growth, the trends of undercutting domestic prices identified in the original investigation would exacerbate further. Thus creating additional difficulties to Union producers who would face the decision either to compete for market share, at the expense of more sustainable prices, or to preserve a higher level of prices at the expense of continuing to lose market share. In both scenarios, its financial performance would be negatively impacted.

(64) Furthermore, the Commission noted that this evolution in prices coincided with the period when a provisional safeguard measure was already in place (since mid-July 2018). Therefore showing that exporting countries were having an even more aggressive import behaviour under the measure, and showing their continued interest to enter the Union market in large volumes despite a provisional safeguard measure being in place.

1.2.5. State of play of TDI measures in third countries and overcapacity

(65) In Sections 1.1.1 and 1.1.2 the Commission explained the evolution and more recent situation of overcapacity and TDI measures in third countries. In view of that information, the Commission considered that it was highly unlikely that there would be a reversal of the existing situation in the near future. For instance, TDI measures are usually imposed for a period of five years, and they can be prolonged further. In particular, because many of the measures had been imposed within the few years prior to the adoption of the EU steel safeguard measure ( 85 ), they were set to continue in place a least for the immediate future. Regarding overcapacity, the reports referred to by the Commission did not indicate that there were signs that overcapacity was going to go down to any significant extent, if anything, they suggested that the situation of global overcapacity in the sector could even deteriorate further ( 86 ). In fact, the Global Forum of Steel Excess capacity was also very clear in concluding that overcapacity continued to be an ongoing problem in late 2018. It noted, ‘Excess steelmaking capacity – a global challenge that continues to plague the sector – creates significant difficulties for steel producers in advanced, emerging and developing economies alike’ ( 87 ).

(66) The proven effects that these factors had caused in the Union market in the form of substantial increase in imports were detailed in Section 1.1 above, as well as in the Definitive Regulation. As they were set to continue in place in the near future, their effects were thus expected to be of the same nature and therefore, together with the U.S Section 232 measure would generate a further increase of imports into the Union, with ensuing negative effects on the Union industry, if no safeguard measure was imposed.

(67) Therefore, the Commission concluded that these elements would continue to play an important role in the Union steel market in the near future and were thus pertinent for the analysis of a threat of serious injury.

1.2.6. Market outlooks and forecasts

(68) Throughout the period analysed, consumption of steel in the Union market increased year-on-year ( 88 ). This trend allowed the Union industry to, generally, also increase its volume of sales, which in turn allowed it to alleviate to some extent the effects of the import pressure it was subject to and showed by the persistent undercutting and steady loss of market share. As explained in Section 1.2.1, in 2017 this increase in sales in a context of a recovery in prices (both in overall terms and when compared to evolution of costs) allowed to the Union industry to partially recover from a consistent negative financial performance in previous years. In Section 1.2.4, the Commission observed a downward trend in steel prices in the Union parallel to an increase in raw material prices.

(69) The Commission then assessed the economic outlooks and forecasts for the period that would follow the conclusion of the investigation in order to assess the existence of a threat of serious injury, analysing a variety of specialized market sources.

(70) In this regard, sources consistently pointed to a scenario of uncertainty and cooling down of worldwide steel demand in the near future. Worldsteel Association noted, ‘deceleration in steel demand will continue into 2019 (…). No deal Brexit and trade war pose risks’ ( 89 ). It also recalled, ‘While the strength of steel demand recovery seen in 2017 was carried over to 2018, risks have increased. Rising trade tensions and volatile currency movements are increasing uncertainty’ ( 90 ).

(71) The OECD noted, ‘recovery (of steel market conditions) looks fragile because of persistent structural imbalances’ ( 91 ). Other market sources like S&P Global Platts echoed this uncertainty sentiment in its Global Market Outlook of December 2018.

(72) Moreover, the Global Forum on Steel Excess Capacity concluded in September 2018 ‘While steel market conditions have shown some cyclical recovery in 2017, the underlying trend in global steel demand remains weak and excess capacity remains significant’ ( 92 ).

(73) In the same vein, Eurofer (an EU Steel Association), noted ‘(…) ongoing trade frictions with the US, and cooling global demand, suggest that external risks could continue to climb, which in turn would increase uncertainty and lead to weakening prospects for EU steel users’ ( 93 ).

(74) Therefore, the data analysed from a variety of sources consistently showed that the expectation was that at best, a modest increase in steel consumption would take place although this was not even certain as prospects were deteriorating amid growing uncertainty. As a result, the stagnating global steel demand would make it even more likely that steel exporters would sell into the attractive Union market.

Conclusion on threat of serious injury

(75) The data analysed in this Section confirmed that imports were very likely going to increase in relevant volumes and that import pressure was thus going to continue, both on volumes and prices, as a result of the persistent overcapacity and the increasing number of TDI measures in third countries, whose effects on exports would continue. In addition, the effects of the US Section 232 would very likely be felt more strongly as months passed by, thus adding further pressure to the Union market through an increased risk of trade diversion, the first signs of which had already materialised.

(76) Against this background, the Commission also confirmed the opposing trends of steel and raw material prices in the second half of 2018, and the uncertain market outlook for the near future.

(77) Therefore, in view of the elements analysed in this Annex, together with the findings in the original determination the Commission confirmed that there was a threat of serious injury and that such serious injury would have materialised if the Commission had not imposed a definitive safeguard measure.

1.3. Obligations whose effect resulted in the increase in imports

(78) Article XIX:1(a) of the GATT 1994 stipulates, in relevant part: ‘[i]f, as a result … of the effect of the obligations incurred by a [Member] under this Agreement, including tariff concessions, any product is being imported into the territory of that [Member] in such increased quantities …’.

(79) The product in question comprises several tariff lines ( 94 ).

(80) On all of these tariff lines, the European Union has, as a result of tariff concessions made in past rounds of multilateral trade negotiations, the tariff commitments of ( 95 ):

— 0 % ad valorem

(81) These concessions were inscribed, at the time of the safeguard determination, in Part I, Section II of the European Union’s Schedule of Concessions and Commitments, certified as Schedule EU CLXXIII – European Union on 1 December 2016 ( 96 ), as amended. The column for ‘other duties and charges’ in that Schedule and regarding the above tariff lines was empty.

(82) As a result of these concessions inscribed in the European Union’s Schedule of Concessions and Commitments, annexed to the GATT and incorporated pursuant to Article II:7 of the GATT 1994, the European Union had, at the time of the safeguard determination, obligations incurred under the GATT 1994 notably as follows: Article XI:1, prohibiting non-tariff restrictions on the importation of the above-listed products, and, importantly, Article II:1(a) and Article II:1(b), first and second sentences, of the GATT 1994. Under Article II:1(b), first sentence, the EU is not allowed, absent an applicable exception, to impose ordinary customs duties on the product in question in excess of those set forth and provided in the relevant part of the EU’s Schedule of Concessions and Commitments, i.e. the zero rate pointed out above for each of the tariff lines covered. At the time of the original safeguard determination as well as of the imposition of the definitive safeguard measure, the EU’s applied import tariffs on the product covered by the safeguard was 0 %. In other words, for ordinary customs duties, these applied tariffs were already the maximum permitted under Article II:1(a) and Article II:1(b), first sentence, of the GATT 1994. As for other duties or charges, no flexibility existed under Article II:1(b), second sentence, for introducing additional other duties or charges than ordinary customs duties.

(83) The product subject to the safeguard was being imported in increased quantities (as established in the definitive safeguard) as a result of the above obligations undertaken under the GATT 1994 (Article XI:1, Article II:1(a) and II:1(b), first and second sentences, of the GATT 1994), because those obligations, combined with the tariff concessions which the European Union made in the successive rounds of multilateral trade negotiations, enhanced and secured the conditions of market access for imports of the product subject to the safeguard on the market of the European Union. The above-mentioned tariff commitments of the European Union thus resulted in the increase in imports and gave no leeway for the EU to increase ordinary customs duties in lieu of introducing a safeguard measure. This simultaneously explains how the obligations in question resulted in the increase in imports that threatened to cause serious injury.

(84) The GATT obligations specified simultaneously prevented the EU from increasing the applied import duties on the product at issue. These were thus, the European Union’s ‘obligations of the GATT 1994 [which] constrain[ed] its ability to prevent or remedy injury from an increase in imports’. Concomitantly, the European Union ‘suspend[ed] those obligations as a result’ of its safeguard measure.