EN Official Journal of the European Union L 56/131

COMMISSION IMPLEMENTING REGULATION (EU) 2017/367

of 1 March 2017

imposing a definitive anti-dumping duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council and terminating the partial interim review investigation pursuant to Article 11(3) of Regulation (EU) 2016/1036

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1), and in particular Article 11(2) and (3) thereof,

Whereas:

1. PROCEDURE

1.1. Measures in force

(1) Following an anti-dumping investigation (‘the original investigation’), the Council imposed in December 2013 by Implementing Regulation (EU) No 1238/2013 (2) (‘the original regulation’) a definitive anti-dumping duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) currently falling within CN codes ex 8501 31 00, ex 8501 32 00, ex 8501 33 00, ex 8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 00 and ex 8541 40 90 (TARIC codes 8501310081, 8501310089, 8501320041, 8501320049, 8501330061, 8501330069, 8501340041, 8501340049, 8501612041, 8501612049, 8501618041, 8501618049, 8501620061, 8501620069, 8501630041, 8501630049, 8501640041, 8501640049, 8541409021, 8541409029, 8541409031 and 8541409039) and originating in or consigned from the People's Republic of China (‘PRC’) (‘the original measures’). The measures took the form of an ad valorem duty ranging between 27,3 % and 64,9 %.

(2) In the original investigation, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (‘CCCME’) submitted, on behalf of a group of exporting producers, a price undertaking to the Commission. By Decision 2013/423/EU (3), the Commission accepted that price undertaking with regard to the provisional anti-dumping duty. Following the notification of an amended version of the price undertaking by a group of exporting producers together with the CCCME, the Commission confirmed by Implementing Decision 2013/707/EU (4) the acceptance of the price undertaking as amended (‘the undertaking’) for the period of application of definitive measures. Since then the Commission adopted Implementing Decision 2014/657/EU (5) clarifying the implementation of the undertaking. It also adopted five Regulations withdrawing the acceptance of the undertaking for several exporting producers (6).

(3) On 5 May 2015, the Commission published a Notice of Initiation of a partial interim review of the anti-dumping and countervailing measures applicable to imports of the product under review (7). The review was limited in scope to the benchmark used as a reference for the price adaption mechanism set out in the above undertaking. It was terminated in January 2016 by virtue of Commission Implementing Regulation (EU) 2016/12 (8).

(4) On 28 May 2015, the Commission initiated anti-circumvention investigations concerning the possible circumvention of both the anti-dumping and countervailing measures on imports of the product under review by imports of the product under review consigned from Malaysia and Taiwan, whether declared as originating in Malaysia and Taiwan or not (9) (10). As a result, the measures were extended to imports of crystalline silicon photovoltaic modules and key components (i.e. cells) consigned from Malaysia and Taiwan with the exception of a number of genuine producers which were found not to circumvent (11).

1.2. Request for an expiry review

(5) Following the publication of a notice of impending expiry (12) of the original measures, on 4 September 2015 the Commission received a request for the initiation of an expiry review pursuant to Article 11(2) of the basic Regulation. The request was lodged by EU ProSun on behalf of Union producers representing more than 25 % of the total Union production of crystalline silicon photovoltaic modules and key components (i.e. cells) and it was supported by Union producers whose collective output constitutes more than 50 % of the total production of the like product produced by that portion of the Union industry expressing either support for or opposition to the request.

1.3. Initiation of an expiry review and an interim review

(6) On 5 December 2015, the Commission initiated an expiry review of the anti-dumping measures applicable to imports into the Union of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the PRC (‘the country concerned’) and published a Notice of Initiation in the Official Journal of the European Union (13) (‘the Notice of Initiation of an expiry review’).

(7) On the same date the Commission initiated ex officio a partial interim review pursuant to Article 11(3) of the basic Regulation limited to the examination of whether or not it is in the Union interest to maintain measures currently in force on cells of the type used in crystalline silicon photovoltaic modules or panels (14) (‘the Notice of Initiation of an interim review’).

1.4. Review investigation period and period considered

(8) The investigation of a continuation or recurrence of dumping covered the period from 1 October 2014 to 30 September 2015 (‘the review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2012 to the end of the review investigation period (‘the period considered’). The same periods were used in the partial interim review.

1.5. Interested parties

(9) In the Notices of Initiation, the Commission invited interested parties to contact it in order to participate in the investigations. In addition, the Commission informed the applicants, other known Union producers, known exporting producers in the PRC and the PRC authorities, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigations and invited them to participate.

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

(11) In the Notice of Initiation of an expiry review, the Commission informed interested parties that it envisaged the United States of America (‘USA’) and India, as well as Japan, Malaysia, South Korea and Taiwan as third market economy countries within the meaning of Article 2(7)(a) of the basic Regulation. The Commission informed the known producers in those countries about the initiations and invited them to participate.

1.6. Sampling

(12) In the Notices of Initiation, the Commission stated that it might sample the Chinese exporting producers (concerning the expiry review), the Union producers and Union unrelated importers (concerning both the expiry review and the interim review) in accordance with Article 17 of the basic Regulation.

1.6.1. Sampling of Union producers

(13) In its Notices of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the largest representative volume of EU sales, taking into account production volume and the geographical location, which could reasonably be investigated within the time available. The sample consisted of six Union producers for modules and three for cells. Both vertically integrated and non-integrated producers were included in the provisional sample. The Commission invited all interested parties to comment on it. All companies that were provisionally selected agreed to be included in the provisional sample.

(14) Comments on the proposed sample were received from several interested parties. They criticised the fact that the names and the location of several Union producers were kept confidential which prevented them from making comments on the selected producers' share with respect to the total production and sales volumes of the Union industry.

(15) The Commission recalled that all sampled Union producers, except for SolarWorld, WARIS Srl (‘Waris’) and Sillia VL (‘Sillia’), requested at initiation stage that their names be kept confidential. The Commission respected those requests, but invited them to confirm their wish to remain anonymous throughout the reviews investigations and to provide good cause for their request. All of the companies concerned, with the exception of one, confirmed their initial request and provided justification for their requests. In particular, the companies indicated that they fear losing business activities in the PRC, and/or supplies of raw materials and components sourced from the PRC. These reasons were found to be warranted. Thus the Commission decided to accept their claim for anonymity and to reject the requests by interested parties to reveal the identity and location of the sampled Union producers. Among the anonymous companies, only Jabil Assembly Poland sp. zoo. (‘Jabil’) agreed to have its name disclosed in the final sample.

(16) One exporting producer argued that the Commission failed to define the Union industry prior to selecting the provisional sample thereof. Therefore, it could not comment whether the latter is representative. In addition, some of the selected Union producers, like SolarWorld, are vertically integrated as they manufacture cells which are mainly used for their own modules production. Consequently, there is a risk that the production of the same final product, modules, has been counted twice.

(17) It follows from the Notices of Initiation that ‘Union industry’ refers to all Union producers of modules and key components (i.e. cells). In addition, the Union industry was already clearly defined in the original investigation. Finally, the captive use of cells production has been deducted when examining the standing and the representativeness of the Union industry. Therefore, this claim was rejected.

(18) Several other interested parties argued that the Commission should not have included in the sample Waris and Sillia since they are small Union producers of modules. As such they have a very specific business model which is not representative. Rather, the Commission should have included big and middle sized companies such as Jabil.

(19) The Commission rejected this argument as it included in the sample a significant number of big and middle sized modules producers. Waris and Sillia were included in the sample in order to ensure a wider geographical representativity.

(20) After the initiation of the proceeding the Commission had to exclude from the sample the company Sillia due to lack of cooperation. As a result, the remaining sampled Union producers accounted for 38,8 % of the total EU sales and 55 % of total Union production of modules. For cells they accounted for 76,6 % of the total EU sales volume and 77 % of the total Union production. Therefore, the modified sample was still considered representative of the Union industry.

1.6.2. Sampling of importers

(21) In order to decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notices of Initiation.

(22) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number, the Commission decided that sampling was not necessary.

1.6.3. Sampling of exporting producers

(23) In view of the apparently high number of exporting producers, sampling was envisaged in the Notice of Initiation of an expiry review for the determination of dumping, in accordance with Article 17 of the basic Regulation. To decide whether sampling would be necessary and, if so, to select a sample, the Commission asked all known exporting producers in the PRC to provide the information specified in the Notice of Initiation of an expiry review. The authorities of the country concerned were also consulted.

(24) Eighty-one exporting producers in the country concerned (often groups of several companies) provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three groups on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. All three exported modules to the EU, one exported also cells. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of the country concerned, were consulted on the selection of the sample. No comments were made.

(25) Following disclosure, one interested party argued that the sample of the exporting producers is inappropriate as it differs significantly from the sample of Union producers in terms of the sampled companies' production and production capacity.

(26) As explained in recital 24, the Commission selected a sample on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. According to Article 17 of the basic Regulation the sample used is to be statistically valid on the basis of information available at the time of the selection, or include the largest representative volume of production, sales or exports which can reasonably be investigated within the time available. Therefore, the sample of exporting producers is to be representative of the exporting producers and not of their Union counterparts. As confirmed by the jurisprudence of the Court of Justice, the sample of exporting producers does not have to mirror that of Union producers (15). This claim was therefore rejected.

1.7. Questionnaire replies and verification visits

(27) The Commission sent questionnaires to the three sampled exporting producers in the PRC, nine Union producers and more than 100 other interested parties, e.g. unrelated importers, upstream and downstream companies, that had made themselves known within the time limits set out in the Notices of Initiation.

(28) The Commission sought and verified all the information deemed necessary for a determination of dumping, resulting injury and Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following interested parties: Union producers — SolarWorld Group, Bonn, Germany; — Jabil, Kwidzyn, Poland; — WARIS S.r.l., Borgo Chiese, Italy. — 2 anonymous module producers and 2 anonymous cell producers. Importers — IBC Solar AG, Germany — BayWa r.e. Solar Energy Systems GmbH, Germany Upstream operators — Wacker Chemie AG, Germany Exporting producers in the PRC — Chint Solar, Hangzhou — Jinko Solar, Shanghai and Shangrao — Trina Solar, Changzhou Producers in the analogue country — Sunengine Corporation, Hukou, Taiwan

1.8. Disclosure

(29) On 20 December 2016, the Commission disclosed to all interested parties the essential facts and considerations on the basis of which it intends to maintain the anti-dumping measures in force and invited all interested parties to comment. The Commission considered the comments made by the interested parties and took them into account, where appropriate. Following disclosure, the Chinese Chamber of Commerce, Wacker, Solar Power Europe (‘SPE’) and Solar Alliance for Europe (‘SAFE’) requested and were granted a hearing with the Hearing Officer in trade proceedings.

(30) After the Committee referred to in recital 379 delivered no opinion, the Commission disclosed its intention to reduce the period for which the measures would apply from 24 months to 18 months. It invited the interested parties to comment on this aspect.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(31) The product concerned is crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels (the cells have a thickness not exceeding 400 micrometres) (‘the product under review’ or ‘product concerned’), currently falling within CN codes ex 8501 31 00, ex 8501 32 00, ex 8501 33 00, ex 8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 00 and ex 8541 40 90 (TARIC codes 8501310081, 8501310089, 8501320041, 8501320049, 8501330061, 8501330069, 8501340041, 8501340049, 8501612041, 8501612049, 8501618041, 8501618049, 8501620061, 8501620069, 8501630041, 8501630049, 8501640041, 8501640049, 8541409021, 8541409029, 8541409031 and 8541409039) and originating in or consigned from the People's Republic of China, unless they are in transit in the sense of Article V GATT.

(32) The following product types are excluded from the definition of the product under review: — solar chargers that consist of less than six cells, are portable and supply electricity to devices or charge batteries; — thin film photovoltaic products; — crystalline silicon photovoltaic products that are permanently integrated into electrical goods, where the function of the electrical goods is other than power generation, and where these electrical goods consume the electricity generated by the integrated crystalline silicon photovoltaic cell(s); — modules or panels with a output voltage not exceeding 50 V DC and a power output not exceeding 50 W solely for direct use as battery chargers in systems with the same voltage and power characteristics.

(33) The photovoltaic modules and cells convert sunlight into electricity. The conversion is operated by cells which absorb light and convert it into electricity through crystalline silicon.

2.2. Like product

(34) The investigation showed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses: — the product concerned; — the product produced in the PRC and sold in the Union; — the product produced in the PRC and sold in other markets; — the product produced and sold on the domestic market of Taiwan, which served as an analogue country; and — the product produced and sold in the Union by the Union industry.

(35) The Commission decided that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

3.1. Preliminary remarks

(36) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether dumping was currently taking place and whether dumping was likely to continue or recur upon a possible expiry of the measures in force on imports from the PRC.

3.2. Dumping during the review investigation period

3.2.1. Analogue country

(37) Since the PRC is considered to be a non-market economy country, normal value was determined on the basis of the price in a market economy third country, in accordance with Article 2(7)(a) of the basic Regulation. For this purpose the analogue country had to be selected.

(38) India served as analogue country in the original investigation. In the notice of initiation, the Commission informed interested parties that it envisaged the USA and India (as requested by the applicant), as well as Japan, Malaysia, South Korea and Taiwan as potential analogue countries.

(39) The Commission received comments on the choice of the analogue country from six interested parties. All of them supported Taiwan. One supported South Korea, as an alternative. At the same time all of them opposed the USA because of the existing trade defence measures and distortions caused by the domestic subsidisation. Three parties also opposed India because of domestic inefficiencies.

(40) After contacting all known producers of the like product in all potential analogue countries, the Commission secured cooperation from one producer in Taiwan and one in the USA. The cooperating producer in Taiwan produced mainly cells but sold both modules and cells. The majority of modules sold by this producer were manufactured by third parties pursuant to a tolling agreement whereby the third party would receive cells and a tolling fee and supply the modules. Some modules were simply bought from third parties to whom the cooperating producer would be selling cells. All these modules were then sold under the cooperating producer's brand. The cooperating producer in the USA is related to the major Union producer — SolarWorld — and produced both cells and modules, but sold domestically only modules.

(41) Both the Taiwanese and the US markets appear to be competitive, with several domestic producers and significant imports from abroad. However, the solar panels market in the USA is protected by anti-dumping and countervailing duties on the imports from China and anti-dumping duties on the imports from Taiwan. Taiwan does not have any such measures in place.

(42) As the cooperating producer in the USA did not sell cells on the domestic market during the RIP and, unlike the USA, the market in Taiwan is not shielded by trade defence measures, the Commission considered Taiwan as a more appropriate market economy third country.

(43) Following disclosure, two interested parties argued that the Commission chose an inappropriate analogue country producer as it produces smaller quantities of cells than the exporting producers and has their modules produced by third parties under a tolling agreement.

(44) Under Article 2(7) of the basic Regulation, the Commission does not choose analogue country producers. It chooses market economy third countries. Despite the Commission's extensive efforts to secure wide cooperation in all potential analogue countries only one producer in Taiwan cooperated. Furthermore that producer was also the only cooperating producer in the entire investigation that sold both modules and cells. Finally, the cooperating producer in Taiwan operates in a market economy third country, supported as the analogue country for this case by all the parties that commented on this issue, including one of the two parties that raised this claim. This claim was therefore rejected, as there was no alternative, and the choice was, in the light of the circumstances of the case, appropriate.

3.2.2. Normal value

(45) The information received from the cooperating producer in the analogue country was used as a basis for the determination of the normal value, pursuant to Article 2(7)(a) of the basic Regulation.

(46) The Commission first examined whether the total volume of domestic sales for the analogue country producer was representative, in accordance with Article 2(2) of the basic Regulation. Following this provision, the domestic sales are representative if the total domestic sales volume of that producer and of the like product to independent customers on the domestic market represented at least 5 % of the total export sales volume of each exporting producer of the product concerned to the Union during the review investigation period. In case of representative domestic sales of the like product, the profitable domestic prices were used as normal value. When the domestic sales of the like product were not representative, the normal value was constructed in accordance with Article 2(3) and (6) of the basic Regulation. In the case where the like product was not sold in representative quantities, the Commission furthermore decided not to apply the last sentence of Article 2(2) as the representative sales per company were below 1 %, which is too little to be representative in the meaning of that provision.

(47) Normal value was constructed by adding the following to the average cost of production of the like product of the cooperating analogue country producer during the review investigation period: — the weighted average selling, general and administrative (‘SG&A’) expenses incurred by the cooperating analogue country producer on domestic sales of the like product, in the ordinary course of trade, during the review investigation period; and — the weighted average profit realised by the cooperating analogue country producer on domestic sales of the like product, in the ordinary course of trade, during the review investigation period.

(48) For the product types sold on the domestic market, the average SG&A expenses and profit of transactions made in the ordinary course of trade on the domestic market for those types were added. For the product types not sold at all on the domestic market, the weighted average SG&A expenses (between 2 % and 5 %) and profit (between 1,5 % and 6 %) of all transactions made in the ordinary course of trade on the domestic market were added.

(49) Following disclosure, one interested party argued that, when constructing the normal value, the Commission did not take into consideration the structural cost advantages of Chinese so-called ‘tier 1 companies’ (16). According to that party 22 % of cost of production should have been subtracted on that account. The same party also objected to the Commission constructing the normal value by adding SG&A expenses and profit to the cost of production. According to that party this is double counting as any tolling fee would already include some SG&A expenses and profit.

(50) Another interested party argued that the Commission failed to provide a breakdown of the volume and representativeness of the production and sales of cells produced by the analogue country producer and modules produced under the tolling arrangement. According to the party, the Commission failed to explain how the cost of production of the modules made under the tolling arrangement was calculated. The same company requested that the Commission provides further details on the calculation of the constructed normal value of both cells and modules. Furthermore, the Commission should provide details on the tolling partner's cost structure and its size to determine whether it could sufficiently use economies of scale and whether the tolling fee to the toller was representative. The Commission should also assess the representativeness of the tolling fee paid by the analogue country producer by comparing it with the tolling fee that Jabil has received for the same service in the Union.

(51) As mentioned above, when construction of the normal value was necessary, the normal value was constructed on the basis of Article 2(3) of the basic Regulation (i.e. cost of production in the country of origin plus SG&A expenses and profit). The alleged cost advantages of Chinese tier 1 companies is not to be taken into consideration in this exercise, as there is no basis for doing so under the basic Regulation. Furthermore, it was not made clear in the relevant submission how the 22 % was quantified by the interested party. The Commission also disagreed that adding SG&A expenses and profit leads to double counting. The price of any raw material being sold or service being provided in a market economy will include part of SG&A expenses and profit of the supplier. Therefore, this claim runs contrary to the way a normal value should be constructed according to Article 2(3) of the basic Regulation.

(52) As mentioned above, the representativeness of domestic sales of the analogue country producer was assessed by the Commission. However, the detailed outcome of this test and the volumes of production and sales cannot be disclosed as they constitute business confidential information of that producer. The costs of production of the modules made under the tolling agreement were composed of the cost of production of the cells used in the modules and the tolling fee. As to further details on the calculation of the constructed normal value of both cells and modules, the Commission noted that this is business confidential information. Furthermore some of it, like cost structure of the tollers is not only confidential but also inaccessible to the Commission as well as the analogue country producer. With regard to this request, it cannot be overstated that the interested party does not question Taiwan as being an appropriate market economy third country. Indeed, in its previous submission, the interested party praised it as such, dismissing USA and India as inappropriate analogue countries. There is no indication, nor argument being put forward by any of the interested parties, that suppliers of a service to an analogue country producer in an appropriate market economy third country are not behaving according to market forces.

(53) These claims were therefore rejected.

3.2.3. Export price

(54) The Commission first established the export price on the basis of export prices actually paid or payable by independent customers in the Union or on the basis of resale prices when the product concerned was sold via related importers in the Union.

(55) In order to examine whether export prices to the Union were reliable and given the existence of undertakings, export prices to the Union were analysed in relation to the minimum import price (‘MIP’) of the undertaking. It was in fact necessary to ascertain whether the export price to the Union was set at a certain level mainly because of the MIP established by the undertaking and, therefore, whether it was reliable or not. In this respect, the Commission considered whether, on a weighted average basis at the level of each sampled exporting producer, the export price to the Union was substantially higher than the MIP or not. The Commission also considered how this price related to prices for exports to third countries.

(56) For all sampled exporting producers, the export price to the Union was on average at the level of the MIP. In addition, their export price to the Union was significantly higher than export prices to third countries. Consequently, the export price to the Union was significantly influenced by the undertaking and is therefore unreliable.

(57) Following disclosure, one interested party argued that this finding confirms that the MIP serves as a general price benchmark for the Union market and thus determines the price level of all modules sold in the Union, no matter where the modules were produced.

(58) The Commission did not see this connection. The fact that the sampled exporting producers, because they were subject to the terms of the undertaking, could not sell below the MIP, does not preclude other exporting producers both from the PRC and other third countries from doing so, if economically viable. Furthermore, the MIP can also not serve as a benchmark because it is business-confidential. This claim was therefore rejected.

(59) In the absence of a reliable export price for these Chinese exporting producers, due to the existence of the undertaking in this case, the Commission considered another methodology to establish the export price. Given that the sampled exporting producers were selling solar panels on the world market, the Commission used unit export prices for solar panels sold in the biggest non-EU export markets (Chile, India, Japan and Singapore, depending on the exporting producer) of the sampled exporting producers, where those sales prices did not include trade defence duties. India appeared to have trade defence measures in place, but the Commission was able to use data from the exporting producers, who did not pay those duties, for the reason set out below in recital 60. It then turned out after disclosure that those duties were no longer in force during the RIP (see below recital 86)

(60) If the exporting producers export the product concerned directly to independent customers in the third country, the unit export price was the price actually paid or payable for the product concerned when sold for export to the relevant third country market, in accordance with Article 2(8) of the basic Regulation.

(61) If the exporting producers export the product concerned in the third country through a related company acting as an importer, the unit export price was established on the basis of the price at which the imported product was first resold to independent customers in the relevant third country market, in accordance with Article 2(9) of the basic Regulation. In this case, on the basis of the data supplied by the sampled exporting producers and verified by the European Commission, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses (between 0,05 % and 9 %, depending on the data reported by and verified for the company in question), and for profits accruing (between 1 % and 3 %, depending on the data reported by and verified for the company in question). In this case, sales transactions including anti-dumping or countervailing duties were disregarded as they are not a reliable proxy for a price in the absence of measures. Therefore, duty-paid transaction in the United States of America were excluded, as the vast majority of these transactions were done through related importers.

(62) Following disclosure, one interested party argued that, when constructing the export price on the basis of Article 2(9), the Commission wrongly made adjustment for SG&A expenses and profit of related traders in the PRC and in Hong Kong.

(63) The same interested party pointed out that some of the allowances may have been double counted when direct selling expenses were added (as they were already included in the SG&A). The party also pointed out that its level of dumping when compared with its level of undercutting may point to some errors in the calculations.

(64) The Commission accepted these claims. A relevant adjustment on the account of traders in the PRC and in Hong Kong was made under Article 2(10)(i) instead of under Article 2(9) of the basic Regulation. The Commission also adjusted its calculations to avoid double counting of certain allowances. Furthermore, following the comment about dumping and undercutting the Commission discovered a clerical error in its calculations and corrected it. The changes in the calculations have no impact to the conclusion and the proposal. Nevertheless, the party was informed of the changes made after its comments on final disclosure and allowed to comment, if necessary, again.

(65) In order to establish the export price the unit export price established as described above was then multiplied by the quantities sold to the Union during the RIP.

(66) Following disclosure, one interested party questioned the use of third country export prices. According to the party, Chile and Singapore have limited solar installations and represent a minor share of the PRC's total cell and module exports. The same party requested the Commission to provide a breakdown of the export sales to each country in the calculated export price and the weighted average export prices in each of the four export countries considered, namely Chile, India, Japan and Singapore.

(67) Another interested party argued that by changing calculation methodology and using prices to third countries to calculate the export price contradicts Article 11(9) of the basic Regulation, as interpreted by the General Court (17).

(68) As explained above, for each sampled exporting producer the Commission used its biggest export markets. Chile and Singapore do not represent minor shares of the sampled exporting producer(s) in question. Concerning the request for the breakdown of the export sales to each country in the calculated export price and the weighted average export prices in each of the four export countries considered, the Commission notes that this information contains business confidential information. Moreover, this information was obtained from the sampled exporting producers. It was then returned to them with the specific disclosure, so that they could verify whether it was used correctly in the relevant calculation. No comments concerning this issue were received from the sampled exporting producers. The following ranges can be provided in order to illustrate this point: Chile from 12 % to 18 % of the relevant exporting producer(s)' exports; India from 9 % to 15 % of the relevant exporting producer(s)' exports; Japan from 12 % to 22 % of the exporting producer(s)' exports; and Singapore from 40 % to 60 % of the exporting producer(s)' exports.

(69) With regards to the change in methodology, it is indeed true that, as it is apparent from Article 11(9) of the basic Regulation, as a general rule, the methodology for calculating the dumping margin followed in a review must be the same as that used in the original investigation which led to the imposition of the anti-dumping measures. However, the provision contains an exception which allows a different methodology to be applied in a case in which the circumstances have changed. As explained above the effect of the undertaking on the export prices to the Union was examined and the existence of MIP was found to render these prices unreliable. In accordance with Article 11(9), considering that the circumstances have changed, the Commission was entitled to apply a methodology which was different from that applied in the original investigation. In the judgment relied upon by the interested party, that possibility is explicitly foreseen, but the Council decided not to rely on it. Finally, the Commission's approach was confirmed by the Court of Justice (18).

(70) These claims were therefore rejected.

3.2.4. Comparison

(71) The Commission compared the normal value with the export prices for solar panels in the sampled exporting producers' biggest non-Union export markets (Chile, India, Japan and Singapore, depending on the sampled exporting producer).

(72) Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport and insurance, (between 0,02 % and 7 %, depending on the data reported by and verified for the company in question) handling, loading and ancillary expenses (between 0 % and 1 %, depending on the data reported by and verified for the company in question), credit cost (between 0,05 % and 0,5 %, depending on the data reported by and verified for the company in question) and bank charges (between 0 % and 0,03 %, depending on the data reported by and verified for the company in question).

3.2.5. Dumping margin

(73) For the sampled exporting producers, the Commission compared the weighted average normal value of each type of the like product in the analogue country 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.

(74) The dumping margins so established range from 23,5 % to 31,5 %.

(75) As mentioned in recital 48 above, the export price to the Union was significantly influenced by the undertaking and is therefore unreliable. Nevertheless, for the sake of completeness, the Commission compared the weighted average normal value of each type of the like product in the analogue country with the weighted average export price of the corresponding type of the product concerned to the Union. On this basis, dumping margins, expressed as a percentage of the CIF Union frontier price duty unpaid, from 8,9 % to 14,8 % were found in the RIP.

(76) This calculation showed dumping for exporting producers who, during the RIP, were subject to undertakings. It is recalled that the MIP in the undertakings was not based on the dumping margin. Thus the undertakings did not remove the dumping established in the original investigation completely.

(77) Following disclosure, one interested party, who was not a sampled exporting producer, complained about no details of the calculation of the dumping margins were delivered.

(78) The Commission noted that detailed calculations were delivered to and verified by the sampled exporting producers that have provided the data. A disclosure to third parties, that goes beyond the meaningful summary provided in the general disclosure document and in the present Regulation, would violate the applicable provisions on the need to balance business confidentiality and procedural rights.

3.3. Likelihood of continuation of dumping

(79) As discussed in recitals 55 to 59 above, for all sampled exporting producers, the export price to the Union was on average at the level of the MIP. In addition, their export price to the Union was significantly higher than export prices to third countries. Consequently, it is very likely that in the absence of the undertaking the export price to the Union would decrease to the level of export prices to third countries. Therefore, the likely dumping margin, in the absence of the measures, would be in the range of 23,5 % to 31,5 %, as established in recital 74. These dumping margins are significantly higher than those which were established on the basis of the export price to the Union during the RIP (which were within the range of 400 EUR/kW and 700 EUR/kW for modules and 100 EUR/kW and 400 EUR/kW for cells). As established in recital 75, these dumping margins are in the range of 8,9 % to 14,8 %.

(80) When analysing whether there was a likelihood of continuation of dumping should the measures lapse, the Commission also analysed the following elements: attractiveness of the Union market and production capacity and consumption in the country concerned.

3.3.1. Attractiveness of the Union market

(81) In 2012, the Union market accounted for up to 60 % of the annual global new installed capacity. Since then its importance has diminished to 14 % in 2015 as indicated in recital 197. Its share is expected to remain important in the future. However, the forecasts for growth of the Union market of annual global new installed capacity are modest in comparison with the rest of the world.

(82) Nevertheless, the Union remains an important market with roughly 7,2 GW annual new installed capacity in the RIP and three of its Member States (France, Germany and the United Kingdom) amongst the top ten markets for solar modules in 2015 (19). Furthermore, the imposition and reinforcement of trade defence measures against imports from the PRC by Canada, India and the USA has reduced the attractiveness of these markets for exporting producers from the PRC, thereby increasing that of the Union market, should the measures lapse.

(83) The Chinese producers are still very interested in the Union market. Despite the introduction of the anti-dumping and countervailing measures in 2013, they have maintained a strong position on the Union market. Their share in the modules market dropped from 66 % in 2012 to 41 % in the RIP, whilst their share in the cells market increased from 7 % in 2012 to 16 % in the RIP. This reflects the trend that an increasing number of Union producers limit their activity to the segment of module production, purchasing cells in third countries. They account as Union production of modules. It also reflects the tendency that those exporting producers that also have production facilities in other third countries than the PRC withdraw from the undertaking and are selling to the Union from those third countries.

(84) Furthermore, as demonstrated by the anti-circumvention investigation in 2015, some of the Chinese producers were trying to avoid the measures by circumventing them through Taiwan and Malaysia, the biggest third countries in imports into the Union. Since the imposition of the measures, several undertakings have been withdrawn. The withdrawals were either voluntary or due to breaches or for reasons of impracticability (see for detailed references above footnote 6).

(85) Following disclosure, one interested party argued that, despite the trade defence measures against imports from the PRC, the USA is an attractive market due to incentives and a very high natural sun irradiation level. Furthermore, according to the same party, contrary to the facts set out above, India does not have any trade defence measures against imports from the PRC. Furthermore, India plans to significantly increase its installed capacity.

(86) With regard to the USA, the Commission noted that the party provides no proof that the incentives completely offset the disadvantage posed by the duties to producers from the PRC. Indeed, the Commission did not claim that the US market is unattractive but that the presence of the duties reduced its attractiveness. With regard to India, the proposed duty was not enforced and was allowed to lapse in June 2014. However, even if India is not subject to duties, duties in Canada and the USA are increasing the attractiveness of the Union market, should the measures lapse. It also does not render the Union market unattractive as all the other considerations described above still stand.

3.3.2. Production capacity and consumption in the country concerned

(87) The spare capacity of all exporting producers in the PRC cooperating with this investigation is at around 33 %, according to their sampling replies. These companies alone had a spare capacity during the RIP (around 10 GW) capable of satisfying the entire Union market. It is to be noted that the spare capacity of the largest cooperating producers by volume, is much lower, their capacity utilisation ranging from 86 % to 97,8 %.

(88) Following disclosure, one interested party questioned this data arguing that the four largest Chinese manufacturers (Trina, JA Solar, Jinko and Canadian Solar) were operating at full capacity. According to the interested party these four producers account for more than 40 % of the total Chinese exports (about 11,2 GW). Consequently, to reach the 43 % spare capacity in 2016 indicated by the Commission, all smaller producers would have to operate at a mere 20 % capacity utilisation. The interested party requested the Commission to provide details of the calculation of the 43 % average.

(89) The Commission first noted that the spare capacity of all exporting producers in the PRC cooperating with this investigation is estimated at around 33 %, not 43 %. Furthermore the party's calculations outlined above are based on the assumption that JA Solar and Canadian Solar were cooperating with the investigation. These two manufacturers did not cooperate with the investigation. Thus their capacity and capacity utilisation is unknown to the Commission and was not taken into consideration in the calculations above.

(90) The claim was therefore rejected.

(91) The overall Chinese production capacity of modules is estimated at 96,3 GW/year for 2015 and is expected to reach 108 GW/year in 2016 (20). At the same time, global demand was estimated at 50,6 GW in 2015 and is projected to increase to 61,7 GW in 2016 (21). Therefore, the total spare capacity of the Chinese producers exceeded by large the global demand, namely by 47,5 %, in 2015 and will exceed it by 42,9 % in 2016.

(92) Several parties argued that Chinese domestic demand has been increasing in the last few years, reaching 50 % of Chinese solar module production by the first quarter of 2016. China would allegedly have around 20 GW annual new installations per year until 2020. However, as shown above and further developed in recitals 186 to 195, the Chinese exporting producers' excess capacity would be capable of meeting the total global demand in the future, including all rapidly growing markets such as China itself, India, Japan and South America taken together.

(93) Two interested parties questioned the data for the capacity in the PRC and the global consumption used by the Commission. One interested party argued that further capacity will be required to cover the growing demand for solar installations in the PRC and elsewhere in the near future. According to the party the Commission failed to provide any sound arguments that the alleged excess capacity in the PRC would be destined for the Union market.

(94) These claims are addressed in recitals 190-191 below.

3.3.3. Conclusion on the likelihood of continuation of dumping

(95) In light of the estimated significant spare capacity in the PRC, combined with the attractiveness of the Union market in terms of size and sales price, in particular with regard to the price level of the PRC exports to third countries, and the records of past circumvention practices, the Commission concluded that there is a strong likelihood that the repeal of the anti-dumping measures would result in a significant increase of dumped imports of solar cells and modules from the PRC to the Union.

4. INJURY

4.1. Definition of the Union industry and Union production

(96) The like product was manufactured by over 100 producers in the Union during the review investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

(97) All available information concerning the Union industry was used to establish the total Union production for the RIP since complete public information on production was not available. This information included: macroeconomic data provided by the applicant, but collected on its behalf by Europressedienst, an independent consultancy firm; the standing replies of interested parties provided at pre-initiation stage and the verified questionnaire responses of the sampled Union producers.

(98) On this basis, the total Union production during the review investigation period was estimated to be at around 3 409 MW for modules and 1 270 MW for cells.

4.2. Determination of the relevant Union market

(99) A part of the Union industry is vertically integrated and, as far as the production of cells is concerned, a substantial part of the Union industry's production was destined for captive use (96 %). Hence, the free market for cells was very marginal. Following disclosure, one interested party contested the last statement arguing that the free market constituted a big part of the total market for cells (estimated at 3 409 MW, see Table 1b below). The Commission accepted this correction as indeed the captive market in the Union constituted only 31,8 % of the total cells consumption. However, this does not alter the finding that a substantial part of the Union industry's cells production was destined for captive use and has no impact on the analysis made on injury and Union interest. Indeed, the free market for cells is mainly served by imports and not by sales of the Union cells producers, given the fact that most of the cells producers exited the market in the last few years.

(100) In order to establish whether the Union industry continued to suffer 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 (‘captive use’) had to be taken into account in the analysis.

(101) The Commission analysed the following economic indicators by referring to the total activity (including the captive use of the industry): consumption, sales volume, production, production capacity, capacity utilisation, growth, investments, stocks, employment, productivity, cash flow, return on investment, ability to raise capital and magnitude of the dumping margin. For those indicators the Commission found, in line with the original investigation, that the production destined for captive use was equally affected by the competition of imports from the country concerned. The cells destined for the captive market were used as the main component for the production of modules. Therefore, the direct competition of imports of modules from the country concerned faced by the Union module producers also exercised an indirect pressure on the captive sales price and/or costs of production of the cells used in those modules. In addition, the import of cells from the PRC increased the pressure on module producers using captive cell production. They were competing not only with modules assembled in third countries from Chinese cells, but also with modules assembled in the Union using those imported Chinese cells.

(102) Consequently, in contrast to other cases (22), where a distinction between captive and free market was relevant for the injury analysis because products destined for captive use were found not to be exposed to direct competition from imports, the Commission established at the case at hand that for most of the economic indicators, no distinction between captive and free market was justified.

(103) However, as regards profitability, the Commission looked only at the sales on the free market. The prices on the captive market were set according to various pricing policies (transfer pricing at virtual market price, transfer on the basis of the actual costs, etc.). Thus they did not always reflect prices at arm's length and could not be taken into account when assessing this indicator.

(104) Following disclosure, several parties argued that the state of the Union cells industry should have been assessed separately for the captive market and the free market. First, they claimed that the Commission failed to provide a proper reasoning on how the captive market has been equally affected by the competition of the imports from the PRC. Second, one party contended that since the Commission considered that the prices on the captive market were unreliable to assess profitability, it is equally inaccurate to draw the conclusion that they underwent pressure because of imports of modules. Third, a common analysis of the two markets contradicts the fact that cell consumption decreased less than the module consumption during the period considered. This arguably means that there is no direct link between import of modules and import of cells and between the decrease in imports of cells and prices of cells exposed to the free market.

(105) First, contrary to the claims of the parties, the Commission provided in recitals 101-102 above a detailed reasoning on how the captive market for cells has been equally affected by the competition of the imports from the PRC. Since the cell is the main component for the production of a module, the imports of modules from the PRC exercise an indirect pressure on the captive sales price of cells, when the transfer price is based on a virtual market price. In the alternative, when the transfer is based on actual cost, imported cells put pressure on companies to make their production process more efficient. Second, even though the prices on the captive market are unreliable to assess profitability, the Commission considered the development of those prices a relevant factor for assessing whether the captive market faced competition from the imports from the PRC. Third, the Commission did not assert that there is a direct link between imports of modules and import of cells. Rather it observed that the captive use of cells is also subject to the direct competition of imports of cells and indirect competition of imports of modules since the captive cells are used for producing modules. Finally, the interested party failed to prove that there is no link between prices of cells on the free market and decrease in imports of cells. Indeed, as evident from Table 8b the sales prices of the Union cells industry increased when the imports of cells from China decreased both in volume and in market share between 2014, when the measures started to have a full effect, and the RIP. Consequently, these arguments were rejected.

(106) Following disclosure, the Government of China (‘GOC’) contended that a common analysis of the captive and free market for cells actually eliminates an analysis of the free market as it is only 4 % of the total Union cell production. The Commission thus failed to examine the state of the domestic industry as a whole and does not, therefore satisfy the requirements of ‘objectiv[ity]’ in Article 3.1 of the Anti-dumping Agreement.

(107) The Commission failed to understand how the common analysis of the captive and free market for cells eliminated an analysis of the free market. In fact, the Commission analysed a number of injury indicators only for the free market such as profitability, sales prices and return on investments. In addition, a number of indicators are analysed cumulatively, even in cases when a separate analysis of captive and non-captive market is made (23). Those indicators often are: production, capacity, capacity utilisation, investments, return on investments, employment, productivity, stocks and labour costs. Last but not least, the injury indicators of those Union cell producers which sold exclusively on the free market followed the same trends, and, as a result, the conclusions reached for the entire Union cell industry apply to them as well. The GOC insisted that according to WTO case law, in case of the presence of a captive market for part of the product under investigation, a comparative analysis has to be carried out. The Commission considered that this requirement, if it was applicable in the present, very specific case, was in any event complied with. For the part of the Union cell production that is sold on a captive market, injury has been established on the basis of indirect price pressure at the level of the modules into which those cells are built. For the part of the Union cell production that is sold on a free market, the injury indicators have also been assessed separately, and show the same trends as for the captive part of the market (which, due to the fact that it represents 96 % of Union production, are virtually identical to the cumulative assessment). Consequently, this argument was rejected.

(108) The GOC also argued that the statement that the Union modules manufacturers compete with modules assembled in third countries with Chinese cells unlawfully extends the scope of the investigation. However, such modules have been included in the scope of the investigation from the outset since cells confer origin to modules (24). Therefore, this claim was rejected.

(109) Following disclosure, another party claimed that the analysis of profitability on the basis of 4 % of the Union cell production is not representative for an accurate assessment on the need to maintain duties. The Commission noted that only profitability was assessed exclusively on the basis of the sales of cells to independent customers for the reasons set out in recital 103 above. However, for the purposes of assessing the state of Union industry, all other indicators were analysed taking into account both the captive and free market of cells. Consequently, this argument was rejected.

(110) Jabil assembled modules on behalf of other companies during the RIP as a contract manufacturer. For this assembly service, the other companies paid a fee. They also took full contractual responsibility for the sales of the modules assembled by Jabil. Consequently, the revenue reported by Jabil was not derived from the sales of modules, but from the service fees. Therefore, the Commission decided to distinguish Jabil's profit figures from the profit figures of the rest of the Union module industry (see recitals 160 and 161 below). For the remaining injury indicators, the assembly activities provided by Jabil to non-cooperating module producers could not be verified and therefore were not taken into account.

(111) Following disclosure, one interested party requested further clarifications on what data from Jabil was or was not taken into account and why. For all injury indicators, except for profitability, the Commission has taken into account all data provided by Jabil which relate to the cooperating Union module producers. Only that data was taken into account as it could be verified, while the rest was disregarded, in view of Jabil's particular business model and the fact that the final sales prices could not be verified.

4.3. Union consumption

(112) The Commission established the Union consumption on the basis of the total volume of imports of the product concerned and the volume of total sales of the like product in the Union, including those destined for captive use. The total sales of the Union industry were based on the information provided by Europressedienst, corrected, where appropriate, with data from the standing replies of interested parties submitted at pre-initiation stage and the verified questionnaire replies of the sampled companies. As indicated in recital 116 below, import data was based on Comext and the data reported to the Commission by the Member States in accordance with Article 14(6) of the basic Regulation (‘Article 14(6) database’). The data on consumption was cross-checked with other sources (25).

(113) Union consumption developed as follows: Table 1a Union consumption for modules (in MW) 2012 2013 2014 RIP Total market 16 324 10 580 7 292 7 191 Index (2012 = 100) 100 65 45 44 Source: Europressedienst, standing replies, verified questionnaire replies, Comext and Article 14(6) database. Table 1b Union consumption for cells (in MW) 2012 2013 2014 RIP Total market 4 604 4 449 3 262 3 409 Index (2012 = 100) 100 97 71 74 Source: Europressedienst, standing replies, verified questionnaire replies, Comext and Article 14(6) database.

(114) In overall terms the Union consumption decreased considerably between 2012 and the RIP. The Union consumption for modules fell by 56 %. However, after the dramatic drop between 2012 and 2013 by 35 %, the consumption remained rather stable in 2014 and the RIP.

(115) Concerning cells, consumption decreased slightly less, i.e. by 26 % during the period considered. The drop in consumption took place mainly between 2013 and 2014 when it plummeted by 26 %. However, it started to recover during the RIP when it increased by 4,5 % in comparison with 2014.

4.4. Imports from the country concerned

(116) Import volumes and values were based on different sources. For 2012 and part of 2013 they were based on data provided by the applicant, but collected on its behalf by Europressedienst, since at that time modules and cells were imported into the Union under customs headings covering other products not subject to the present investigation and Eurostat could thus not be used. After the registration of imports of modules and cells had been introduced on 6 March 2013 (26), Eurostat data could be used. Consequently, for the rest of 2013, 2014 and the RIP the Commission based its findings on the Comext database (27) and the Article 14(6) database.

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

(117) Imports into the Union from the country concerned developed as follows: Table 2a Imports of modules from the PRC (in MW) and market share (28) 2012 2013 2014 RIP Import volumes from the PRC 10 786 5 198 2 845 2 917 Index 100 48 26 27 Market share (%) 66 49 39 41 Index (2012 = 100) 100 74 59 61 Source: Comext and Article 14(6) database. Table 2b Imports of cells from the PRC (in MW) and market share 2012 2013 2014 RIP Import volumes from the PRC 333 386 613 548 Index 100 116 184 165 Market share (%) 7 9 19 16 Index (2012 = 100) 100 120 260 223 Source: Comext and Article 14(6) database.

(118) During the period considered the import volumes of modules from the PRC decreased by 73 %, with a corresponding decrease in market share by 39 %, i.e. from 66 % in 2012 to 41 % during the RIP. However, after the existing measures were imposed in 2013, import volumes of modules decreased by 45 % between 2013 and 2014, while consumption decreased by 31 %.

(119) Regarding cells, the import volumes increased by 65 % during the period considered, which resulted in a much bigger increase in market share, i.e. by 123 % (from 7 % in 2012 to 16 % during the RIP), in the context of a shrinking market. At the same time between 2013 and 2014 the imports of cells increased by 59 %, which resulted in an increase in market share of 10 percentage points. Even though the surge did not continue in the RIP, the level of imports remained much higher during the RIP than in 2012 and 2013.

4.4.2. Prices of the imports from the country concerned

(120) The Commission established the prices of imports on the basis of Comext and Article 14(6) database.

(121) The average price of imports into the Union from the country concerned developed as follows: Table 3a Import prices of modules (EUR/kW) 2012 2013 2014 RIP PRC's import prices 700 520 553 544 Index (2012 = 100) 100 74 79 78 Source: Comext and Article 14(6) database. Table 3b Import prices of cells (EUR/kW) 2012 2013 2014 RIP PRC's import prices 500 350 282 286 Index (2012 = 100) 100 70 56 57 Source: Comext and Article 14(6) database.

(122) The average import price from the PRC dropped by 22 % for modules and by 43 % for cells during the period considered. For modules the import price decreased in 2012 and 2013 and then, when the measures entered into force, the price increased by 6,3 % for modules between 2013 and 2014. It slightly decreased again between 2014 and the RIP, i.e. by 1,6 %. Regarding cells, the import price decreased by 43 % during the period considered. It decreased by 30 % between 2012 and 2013 and continued to decrease between 2013 and 2014 when it plummeted further by 19,4 %. However, it slightly increased between 2014 and the RIP, by 1,4 %.

(123) As indicated in Section 3.2.3 above, almost all exporting producers which sold modules and cells during the RIP from the PRC to the Union had price undertakings and their export prices to the EU were determined by those price undertakings which set a minimum import price. Only 1,6 % of the volume of imports of modules and 0,6 % of cells were made outside the minimum import price (29). Consequently, such export prices could not be considered a pertinent indicator in order to establish the pricing behaviour of the exporting producers should the measures not be in place.

(124) Following disclosure, several parties argued that the export price to the EU should be used to establish undercutting and they calculated that there was no undercutting on this basis. It is true that on the basis of the export prices to the EU there is no undercutting for modules and that the undercutting for cells is very marginal. However, the Commission considered that the lack of undercutting because of compliance with the MIP was not the decisive indicator for the analysis of the current state of the Union industry. As indicated in recitals 170 below, the Commission established that the Union industry continued to suffer injury from the past dumping practices found in the previous investigation and from the circumvention practices found as referred to in recital 4 above and did not have sufficient time to recover.

4.4.3. Prices of the imports from other countries

(125) The average price of imports into the Union from third countries were also based on Comext and Article 14(6) data and developed as follows: Table 4a Modules — imports from third countries 2012 2013 2014 RIP Volume (MW) 1 395 1 382 2 049 1 808 Index (2012 = 100) 100 99 147 130 Market share (%) 9 13 28 25 Index (2012 = 100) 100 153 329 290 Average price (EUR/kW) 700 520 547 550 Index (2012 = 100) 100 74 78 79 Source: Comext and Article 14(6) database. Table 4b Cells — imports from third countries 2012 2013 2014 RIP Volumes (MW) 3 227 3 334 1 580 1 725 Index (2012 = 100) 100 103 49 53 Market share (%) 70 75 48 51 Index (2012 = 100) 100 107 69 72 Average price (EUR/kW) 500 350 289 275 Index (2012 = 100) 100 70 58 55 Source: Comext and Article 14(6) database.

(126) During the period considered imports from third countries into the Union increased by 30 % for modules. The biggest surge was between 2013 and 2014, when the volumes increased by 48 %. Their market share increased significantly, from 9 % in 2012 to 25 % in the RIP. Again, the biggest change happened between 2013 and 2014 when the market share increased from 13 % to 28 %. Taiwan, Malaysia and Singapore were the biggest exporters after the PRC. It should be noted that imports from Taiwan and Malaysia may have included circumvention (see recital 4 above).

(127) Regarding cells the imports from other countries decreased by 47 % during the period considered. The biggest drop, i.e. by 52 %, occurred between 2013 and 2014, while they slightly increased by 9 % between 2014 and the RIP. This resulted in a decrease in market share from 70 % in 2012 to 51 % in the RIP. The decrease was from 75 % to 48 % between 2013 and 2014 and then slightly increased with three percentage points during the RIP. Regarding cells, Taiwan and Malaysia were the biggest exporters, followed by the PRC and the USA. It should be noted that imports from Taiwan and Malaysia may have included circumvention (see recital 4 above).

(128) The average export prices from third countries for both modules and cells decreased significantly during the period considered, in line with the Chinese and Union prices. For modules they decreased by 21 % and for cells by 45 % during the period considered. Again, those prices may have been influenced by circumvention practices (see recital 4 above).

4.5. Economic situation of the Union industry

4.5.1. General remarks

(129) In accordance with Article 3(5) of the basic Regulation, the Commission examined all economic factors and indices having a bearing on the state of the Union industry during the period considered.

(130) For the injury analysis, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data obtained from the applicant, cross-checked with the standing replies sent by a number of Union producers at pre-initiation stage and the verified questionnaire replies of the sampled Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers.

(131) 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.

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

4.5.2. Macroeconomic indicators

4.5.2.1. Production, production capacity and capacity utilisation

(133) The total Union production, production capacity and capacity utilisation developed over the period considered as follows: Table 5a Modules — production, production capacity and capacity utilisation 2012 2013 2014 RIP Production volume (MW) 4 604 4 449 3 262 3 409 Index 100 97 71 74 Production capacity (MW) 8 624 7 907 7 391 6 467 Index 100 92 86 75 Capacity utilisation (%) 53 56 44 53 Index 100 105 83 99 Source: Europressedienst, standing replies, verified questionnaire replies. Table 5b Cells — production, production capacity and capacity utilisation 2012 2013 2014 RIP Production volume (MW) 1 066 734 1 096 1 270 Index 100 69 103 119 Production capacity (MW) 2 384 1 844 1 778 1 811 Index 100 77 75 76 Capacity utilisation (%) 45 40 62 70 Index 100 89 138 157 Source: Europressedienst, standing replies, verified questionnaire replies.

(134) The overall Union production of modules decreased by 26 % during the period considered, but increased by 4,5 % between 2014 and the RIP. Against the drop in consumption, production capacity responded to the trend of decreasing production and also decreased by 25 % during the period considered. Hence, the capacity utilisation rate remained stable between the beginning and the end of the period considered, reaching 53 % during the RIP. However, there was a major increase in capacity utilisation by 9 percentage points between 2014 and the RIP (i.e. an increase by 19 %). It should be noted that the sampled Union module producers had much higher capacity utilisation rate during the period considered, reaching 85 % during the RIP, an increase by 39 % in comparison with 2012 (61 %).

(135) The Union production of cells increased by 19 % during the period considered. While production fell by 31 % between 2012 and 2013, it increased by 49 % between 2013 and 2014 and by further 15 % between 2014 and the RIP. This coincided with the imposition of the anti-dumping measures in December 2013, while consumption constantly decreased in the period between 2012 and 2014, but increased between 2014 and the RIP. At the same time production capacity decreased by 24 % during the period considered, which led to a significant increase of capacity utilisation, from 45 % in 2012 to 70 % in the RIP. Similarly to module producers, the sampled cells producers had much higher capacity utilisation rate than the overall Union industry (86 %), which remained stable during the period considered.

(136) In conclusion, the Union industry decreased its capacity in response to a decrease in consumption. At the same time it increased its production during the RIP in comparison with 2014 which further improved the capacity utilisation rate.

4.5.2.2. Sales volume and market share

(137) The Union industry's sales volume and market share developed over the period considered as follows: Table 6a Modules — sales volume and market share 2012 2013 2014 RIP Total sales volume (captive and open market) in the Union (MW) 4 143 4 000 2 398 2 465 Index 100 97 58 60 Market share (%) 25 38 32 35 Index 100 149 128 140 Source: Europressedienst, standing replies, verified questionnaire replies. Table 6b Cells — sales volume and market share 2012 2013 2014 RIP Total sales volume (captive and open market) in the Union (MW) 1 045 729 1 069 1 136 Index 100 70 102 109 Market share (%) 23 16 33 33 Index 100 72 144 147 Source: Europressedienst, standing replies, verified questionnaire replies.

(138) During the period considered the sales volumes of modules decreased by 40 %. However, in the context of a decrease in consumption by 56 %, this translated into a significant increase in market share during the period considered by 40 %, reaching 35 % during the RIP.

(139) Regarding cells, the Union industry's sales volumes increased by 9 % during the period considered. This resulted in an increase in market share from 23 % in 2012 to 33 % during the RIP, while consumption decreased much less than for modules, i.e. by 26 %.

(140) In the context of a shrinking consumption and the entry into force of the anti-dumping measures, the Union industry managed to increase its market share for both modules and cells.

4.5.2.3. Employment and productivity

(141) Employment and productivity developed over the period considered as follows: Table 7a Modules — employment and productivity 2012 2013 2014 RIP Number of employees 17 321 13 918 6 506 6 303 Index 100 80 38 36 Productivity (kW/employee) 266 320 501 541 Index 100 120 189 203 Source: Europressedienst, standing replies, verified questionnaire replies. Table 7b Cells — employment and productivity 2012 2013 2014 RIP Number of employees 2 876 1 511 1 846 1 770 Index 100 53 64 62 Productivity (kW/employee) 371 486 594 717 Index 100 131 160 194 Source: Europressedienst, standing replies, verified questionnaire replies.

(142) Employment decreased between 2012 and the RIP for modules and cells by 64 % and 38 % respectively. The main decrease (by 53 %) in the number of employees for modules took place between 2013 and 2014, a much bigger decrease in comparison with the drop in production during the same period (by 27 %). For cells, the number of employees increased by 22 % between 2013 and 2014, which was much less than the increase of production — by 49 % during the same period. This resulted in significant productivity increase for both modules and cells, i.e. by 103 % and 94 % respectively during the period considered. Between 2013 and 2014 the productivity increase was by 57 % for modules and by 22 % for cells.

(143) Following disclosure, one interested party contested the Commission's findings on the number of employees employed in the Union industry, claiming that there had been double counting of employees of the cell and module manufacturing of the biggest company, SolarWorld. The figures regarding the employees of SolarWorld and all other sampled companies have been duly verified and it has been ensured that no employees have been double counted in the case of vertically integrated companies. Therefore, this argument was rejected.

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

(144) As explained in Section 3.2.3 above, during the review investigation period the export prices of the exporting producers to the Union were influenced by the undertakings and therefore not reliable enough to be used for the determination whether dumping would be likely to continue or recur should the anti-dumping measures be allowed to lapse.

(145) However, the analysis of the injury indicators shows that the measures in place had a positive impact on the Union industry which is deemed to be recovering from the effect of past dumping.

4.5.3. Microeconomic indicators

(146) Only three cell producers were sampled and two of them are members of EU ProSun. They cooperated in bringing the request, which contained the figures of both producers. Hence, all figures related to microeconomic indicators for cells which can be directly traced to the third company, not member of EU ProSun, are given as ranges to protect the confidentiality of this Union producer who cooperated with the investigation.

4.5.3.1. Prices and factors affecting prices

(147) The average unit sales prices of the sampled Union producers to unrelated customers in the Union developed as follows over the period considered: Table 8a Modules — sales prices in the Union 2012 2013 2014 RIP Average sales price in the Union on the free market (EUR/kW) 790 651 618 593 Index 100 82 78 75 Unit cost of production (EUR/kW) 1 112 813 648 627 Index 100 73 58 56 Source: verified questionnaire replies. Table 8b Cells — sales prices in the Union 2012 2013 2014 RIP Average sales price in the Union on the free market (EUR/kW) 378-418 307-339 239-264 258-284 Index 100 81 63 68 Unit cost of production (EUR/kW) 587-648 402-444 347-384 338-373 Index 100 69 59 58 Source: verified questionnaire replies.

(148) The table above shows the evolution of the unit sales price on the Union free market as compared to the corresponding cost of production. Sales prices fell significantly, i.e. by 25 % for modules, and by 32 % for cells during the period considered. While for modules sales prices fell continuously throughout the period considered, for cells they increased with 5 percentage points between 2014 and the RIP. The sales of cells on the open market made up less than 5 % of the overall production of the sampled producers and in addition one producer sold large quantities at very low prices in anticipation of its business closure in the EU. Therefore, no meaningful conclusion could be drawn from this indicator. Among some sampled producers cells for captive consumption were transferred or delivered for the production of modules using different methodology (transfer pricing at virtual market price, transfer on the basis of the actual costs, etc.). Therefore, no meaningful conclusion could be drawn from captive use price evolution, either.

(149) Unit cost of production fell sharply, i.e. by 46 % for modules and by 42 % for cells during the period considered.

(150) Sales prices for modules have on average been lower than the unit cost of production, but the difference decreased continuously throughout the period considered, and especially after the imposition of the measures in 2013. While the sales price was only 71 % of the unit cost of production for modules in 2012, it was 80 % in 2013, 94 % in 2014 and 94,5 % in the RIP. Thus the difference between the sales price and the cost of production decreased steeply, by 14 percentage points, between 2013 and the RIP.

(151) For cells the sales price was 60 %-67 % of the unit cost of production in 2012, 72 %-80 % in 2013, 65 %-72 % in 2014 and 72-79 % in the RIP. However, as explained above for 2014 and the RIP the trend was strongly influenced by the exceptionally low prices of one Union producer. For the other two sampled companies the trend was 75-80 % in 2014 and 81-86 % in the RIP, largely in line with the one observed for modules.

(152) Overall, the industry started recovering from the past dumping but also made increased efforts to regain its competitiveness, in particular by increasing the productivity of the Union industry's workforce, as set out in recital 141, which resulted in productivity gains and in improved capacity utilisation.

4.5.3.2. Labour costs

(153) The average labour costs of the sampled Union producers developed as follows over the period considered: Table 9a Modules — Average labour costs per employee 2012 2013 2014 RIP Average labour costs per employee (EUR) 32 918 38 245 36 577 38 343 Index 100 116 111 116 Source: verified questionnaire replies. Table 9b Cells — Average labour costs per employee 2012 2013 2014 RIP Average labour costs per employee (EUR) 41 289 -45 590 45 002 -49 689 45 188 -49 895 47 825 -52 807 Index 100 109 109 116 Source: verified questionnaire replies.

(154) Between 2012 and the RIP the average labour costs per employee both for modules and cells increased by 16 %. These increases were mainly caused by the severance payments linked to the rationalisation of the number of employees and wage inflation.

4.5.3.3. Inventories

(155) Stock levels of the sampled Union producers developed over the period considered as follows: Table 10a Modules — Inventories 2012 2013 2014 RIP Closing stocks (kW) 186 533 114 792 196 944 191 207 Index 100 62 106 103 Closing stocks as a percentage of production (%) 33 13 13 11 Index 100 40 38 34 Source: verified questionnaire replies. Table 10b Cells — Inventories 2012 2013 2014 RIP Closing stocks (MW) 53 029 -58 553 90 079 -99 462 99 999 -110 415 135 492 -149 606 Index 100 170 189 256 Closing stocks as a percentage of production (%) 18 23 12 14 Index 100 125 68 80 Source: verified questionnaire replies.

(156) During the period considered stocks slightly increased for modules by 3 % and increased significantly for cells by 156 %. However, for both modules and cells stocks decreased as a percentage of total production by 66 % and 20 % respectively.

(157) Inventories cannot be considered as a relevant injury indicator in this sector, as production and sales are mainly based on orders and, accordingly, producers tend to hold limited stocks.

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

(158) Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows: Table 11a Modules — Profitability, cash flow, investments and return on investments 2012 2013 2014 RIP Profitability of sales in the Union to unrelated customers including Jabil (% of sales turnover) (30) – 24,4/– 29,5 – 24,4/– 29,5 – 6,8/– 8,2 – 7,7/– 9,3 Index 100 100 361/298 319/264 Profitability of sales in the Union to unrelated customers excluding Jabil (% of sales turnover) – 32,7 – 27,2 – 8,7 – 9,5 Index 100 120 376 344 Cash flow (EUR) – 129 864 423 – 69 402 391 – 18 231 488 – 145 258 620 Index 100 187 712 89 Investments (EUR) 24 134 924 12 407 723 17 333 494 24 565 553 Index 100 51 72 102 Return on investments (%) – 6 – 10 – 3 – 2 Index 100 55 193 258 Table 11b Cells — Profitability, cash flow, investments and return on investments 2012 2013 2014 RIP Profitability of sales in the Union to unrelated customers (% of sales turnover) – 37,7 - – 41,6 – 7,2 - – 7,9 – 26,6 - – 29,3 – 36,8 - – 40,7 Index 100 527 142 102 Cash flow (EUR) – 41 934 911 - – 46 303 131 – 17 537 454 - – 19 364 273 – 12 414 052 - – 13 707 182 – 29 027 946 - – 32 051 690 Index 100 239 338 144 Investments (EUR) 29 435 820 -32 502 051 26 074 619 -28 790 726 7 001 485 -7 730 807 11 429 509 -12 620 083 Index 100 89 24 39 Return on investments (%) – 6,0 - – 6,7 – 2,5 - – 2,7 – 24,6 - – 27,2 – 31,8 - – 35,1 Index 100 246 25 19 Source: verified questionnaire replies.

(159) 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.

(160) As indicated in recital 110 above, one sampled company, Jabil, is an assembly operator and is not involved in the business of selling modules. It had a different trend in profitability. It was profitable throughout the period considered and increased its profitability during the RIP, reaching 5-15 %. However, Jabil achieved its profits on the basis of the fee it collected from its customers for the assembly service and not on the basis of the sales of modules. Furthermore, it did not incur expenses related to the sales of modules, such as marketing costs (it incurred only costs for finding new contract manufacturers). It also had a costs structure different from the one incurred by a typical module producer that is fully responsible for the production and the sales of its product. For example, Jabil had lower working capital, inventory costs, accounts payable and receivable as well as lower R & D costs.

(161) The Commission observed that the figure on profitability in the 1st column of Table 11a combined figures from two different groups. On the one hand, it included the module producers, which manufacture the product and sell it. On the other hand, it also included the sampled company Jabil, which merely assembles the modules. In order to have a realistic view on the state of the industry, the Commission decided to differentiate between the two groups in its further analysis. It thus added a second column to Table 11a, which it considered more reliable for the assessment of the profitability of the Union's module industry.

(162) The sampled modules producers, excluding Jabil, were loss making during the period considered. However, losses decreased by 244 % during the period considered. They decreased by 5,5 percentage points in 2013, when compared to 2012. This coincided with the time when the measures entered into force (the provisional measures entered into force on 6 June 2013). Losses decreased significantly more, by 18,5 percentage points, between 2013 and 2014, when the effects of the measures covered the entire year. During the RIP the losses slightly increased by 0,8 percentage points. However, this was mainly influenced by the losses incurred by one Union producer which subsequently decided to stop production. At the same time, all other sampled Union producers continued to decrease their losses further during the RIP in comparison with 2014.

(163) Following disclosure, several parties challenged the exclusion of Jabil from the profit figures of the rest of Union module industry. They argued that Jabil was a rare example of a profitable producer and that the exclusion is inconsistent with the decision to accept an analogue country producer who is using such a tolling agreement to have the modules it sells assembled by another company. The Commission, contrary to what those parties claim, has not excluded Jabil from the profitability analysis. Rather, in order to have a more meaningful sensitivity analysis, it has provided two separate sets of data. Those show that even including Jabil, the Union industry is, on average and taken as a whole, loss-making. It also illustrates that major differences exist between different Union producers, depending on their business model, see in recitals 110 and 160. That claim has therefore to be rejected. In addition, the Commission observes that there is in any event no inconsistency in the approach for the analogue country producer and the Union industry. The analogue country producer is rather similar to Jabil's customers and not to Jabil's own business model. Indeed, while the analogue country producer assumes full responsibility for the sales of the modules assembled by another company, Jabil is an assembly operator which collects a tolling fee from its customers for the assembly service it provides. It is for that reason also that the Commission has focussed, for the injury analysis, on transactions between Jabil and other Union producers that are in the same situation as the analogue country producer (see above recital 52).

(164) Regarding the cells producers, losses decreased by 2 % during the period considered. They decreased by 31,9 percentage points between 2012 and 2013, but increased by 20,3 percentage points between 2013 and 2014 and by 10,7 percentage points between 2014 and the RIP. However, for cells, profitability was influenced by two extraordinary events. On the one hand, one of the sampled producers entered the market during the period considered but changed reporting of some of its costs of production during the last years of the period considered, which resulted in high losses. On the other hand, the sales prices were extraordinarily low and highly loss making of another sampled producer during the RIP when it was in the process of ceasing production. In contrast, the third sampled producer constantly decreased its losses during the period considered.

(165) The net cash flow is the ability of the Union producers to self-finance their activities. Similarly to profitability, it also followed a negative trend between 2012 and the RIP. For modules the net cash flow decreased by 11 % during the period considered, while for cells it decreased by 44 % during the same period. The cash flow fluctuations which occurred in 2014 for both modules and cells were affected by extraordinary events which had taken place with respect to one big Union producer. On the one hand, it acquired an existing factory for a low purchase price and, on the other hand, it restructured its debt. In 2015 it continued to make significant repayments on its loans, which resulted in a negative cash flow from financing activities. It must be noted that this producer reported a positive cash flow from operating activities and a significant improvement in its operating result as compared to 2014. Two other Union module producers had positive and improving cash flow in the RIP, while the other two cell producers had negative, but improving cash flow.

(166) Regarding investments, the tables above show that the Union industry increased its investments by 2 % for modules between 2012 and the RIP. They increased by 40 % between 2013 and 2014 and by 98 % between 2013 and the RIP.

(167) The overall investments for cells decreased by 61 % between 2012 and the RIP. The general trend for investment for cells was again influenced by the decision of one sampled Union producer to stop production. At the same time the investments of the other two sampled producers increased four times between 2014 and the RIP.

(168) Following disclosure, several parties pointed out that investments in cells decreased throughout the period considered and were not positively influenced by the imposition of the measures. First, while this is factually true for the total sample, as indicated in the previous recital this trend was influenced by the decision of one sampled Union producer to stop production. That producer had significant investments at the beginning of the period but almost none at the end of it. Second, another sampled producer made start-up investments in 2013 which reflects the big increase in the overall investments in that year. Third, after the entry of the measures started affecting the profitability of the companies, the investments of the whole sample increased between 2014 and the RIP, reflecting the fact that the two sampled producers who stayed on the market increased four times their investments during that period. Consequently, the argument that the investments were not positively influenced by the imposition of the measures was rejected.

(169) The return on investments (‘ROI’) is the profit in percentage of the net book value of investments. It remained negative throughout the period considered because of the net losses suffered by the Union industry. The ROI for modules improved by 4 percentage points during the period considered; but it improved significantly in 2014 and the RIP in comparison with 2013, by 7 and 8 percentage points respectively. For cells the ROI deteriorated by 25,8-28,4 percentage points during the period considered.

4.5.4. Conclusion on injury

(170) In overall terms, the Union industry continued to suffer from injury during the period considered given the short period after the imposition of the original measures and the magnitude of dumping and the level of injury found in the previous investigation. In addition, the circumvention practices found, as indicated in recital 4 above, have also contributed to the continuation of injury. However, from mid-2013 (the provisional measures entered into force on 6 June 2013), and especially during 2014 (the first full year with anti-dumping measures in force) and during the RIP the Union industry started gradually to recover.

(171) Indeed, a number of injury indicators showed positive trends. Regarding modules, the Union industry increased its Union module sales by 2,8 % and, as a result, its market share increased by 9,4 % between 2014 and the RIP. During the same period, the Union industry increased its captive use and Union sales of cells by 6,3 % and maintained the market share of 33 %. In addition, during the same period the Union industry improved its capacity utilisation by 9 percentage points for modules and by 8 percentage points for cells by both increasing production and decreasing existing capacity. It also achieved significant productivity gains, thereby reducing the gap between its sales prices and its average costs of production. Moreover, the previous undercutting from Chinese exports had stopped due to their compliance with the MIP (no undercutting for modules and only marginal undercutting for cells during the RIP). As a result, although the Union industry was still loss making during the RIP, its losses decreased significantly for modules in comparison with 2012 and 2013. However, the losses did not decrease for the Union industry for cells because, as explained in recital 165 above, they were influenced by extraordinary events occurring to two of the sampled producers. By contrast, the third sampled producer had its losses reduced during the RIP and thus followed the same trend as the one observed for modules.

(172) The Union industry also increased its investments both for modules and cells by 41 % and 63 % respectively between 2014 and the RIP.

(173) However, despite the efforts made and all the positive trends that resulted therefrom, the Union industry still did not manage to recover from the past dumping by the Chinese exporters. As already indicated, both cells and modules manufacturers were loss making during the RIP and had negative cash flows and return on investments. In addition, despite the fact that the import volumes of the Chinese exports decreased for modules, their market share was still higher than the one of the Union producers. Regarding cells, the imports increased significantly in the RIP in volume (by 65 %) in comparison with 2012, gaining market share. The Chinese imports of cells exercised indirect pressure also on the module market of captive producers which was thus prevented from growing further. Therefore, Chinese imports continued to enter the Union market with significant volumes and at prices which were below the cost of production of the Union industry.

(174) Following disclosure, several parties claimed that the Commission failed to assess the effects on the Union industry of imports of modules from third countries made in substantial volumes and at prices below the ones of the Chinese exports.

(175) The Commission acknowledged that the impact from module imports from third countries constitutes an important factor for assessing the state of the EU industry, However, such imports were much less important than the Chinese imports — the market share of the former was 25 % (including modules that in reality were Chinese, but fell under circumvention practices), while of the latter was 41 % during the RIP (and, given circumvention, in reality higher). In addition, the market share of the third countries imports decreased by 10 % between 2014 and the RIP, while the share of the Chinese imports increased by 4,9 % during the same period. These two factors show the much stronger impact of the Chinese imports on the Union industry than the imports from third countries. In addition, the prices of modules from third countries were not below the ones of the Chinese exports. As evidenced in Table 4a above, the weighted average price of all imports from third countries was 550 EUR/kW during the RIP, which was higher than the average Chinese export price – 544 EUR/kW. Therefore, these arguments were rejected.

(176) Concerning cells, several parties claimed that the injury has been caused by third countries imports since the profitability decreased during the RIP compared to 2014, which was caused by the decrease of Chinese imports and the simultaneous increase of imports from third countries.

(177) First, as indicated in recital 164, the increase in losses during the RIP for the sampled producers was influenced by extraordinary events which occurred to two of the Union cell producers, while the third (and the biggest) producer had an increase in profitability during the RIP in comparison with 2014. Second, although the imports from China decreased by 3 percentage points between 2014 and the RIP, they increased by 7 percentage points between 2013 and the RIP, despite the entry into force of the measures. Consequently, the imports from China continued to have an important impact on the Union industry. Third, regarding imports from third countries, indeed they increased with 2 percentage points between 2014 and the RIP, but decreased by 24 percentage points between 2013 and the RIP. Therefore, their impact on the Union industry actually decreased in the period after the imposition of the measures. Consequently, the argument that injury has been caused by third country imports was rejected.

(178) Following disclosure, the GOC claimed that some injury indicators improved only in the RIP and not immediately after the imposition of the measures. Hence, there is no clear link between the imposition of the measures and the various positive trends.

(179) The Commission acknowledged that some injury indicators, for example concerning modules the market share, production and capacity utilisation improved only in the RIP and not in 2014. However, given the magnitude of dumping and injury found in the previous investigation, it took some time to reverse the negative trends applicable for the entire industry. This can be explained by the fact that at the time of imposition of the original measures, the Union industry was in the process of consolidation whereby many producers were already in the state of bankruptcy or near bankruptcy, but exited the market only during 2014. This had an important impact on all macro ind