COMMISSION IMPLEMENTING REGULATION (EU) 2021/1784

of 8 October 2021

imposing a definitive anti-dumping duty on imports of aluminium flat-rolled products originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

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

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

Whereas:

1. PROCEDURE

1.1. Initiation

(1) On 14 August 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of aluminium flat-rolled products (‘AFRPS’ or ‘the product under investigation’) originating in the People’s Republic of China (‘the PRC’ or the ‘country concerned’) on the basis of Article 5 of the basic Regulation (2).

1.2. Provisional measures

(2) In accordance with Article 19a of the basic Regulation, on 15 March 2021, the Commission provided parties with a summary of the proposed provisional duties and details about the calculation of the dumping margins and the margins adequate to remove the injury to the Union industry. Interested parties were invited to comment on the accuracy of the calculations within 3 working days. The three sampled exporting producers provided comments (3). The Commission considered the comments and corrected calculation errors where appropriate.

(3) On 12 April 2021, the Commission imposed a provisional anti-dumping duty by Commission Implementing Regulation (EU) 2021/582 (4) (‘the provisional Regulation’).

1.3. Subsequent procedure

(4) Following the disclosure of the essential facts and considerations on the basis of which a provisional anti-dumping duty was imposed (‘provisional disclosure’), the complainants, the sampled exporting producers, a non-sampled exporting producer, several users in the automotive heat exchanger sector and one downstream user, one user in the foil sector, two users in the electrolytic capacitor sector, one user in the aluminium composite panel sector, one user in the venetian blind sector and its supplier, an unrelated trader, an importer, the European Association for Automotive Suppliers, the European automobile manufacturers association and the Government of the People’s Republic of China (‘GOC’) made written submissions making their views known on the provisional findings. Two exporting producers requested and received further details on the calculation of their injury margins.

(5) The parties who so requested were granted an opportunity to be heard. The Commission held hearings with the three sampled exporting producers, the complainants, Company B, two users in the automotive heat exchanger sector, one user in the foil sector, one user in the aluminium electrolytic capacitor sector, an unrelated trader, an unrelated importer and an association of independent distributors (EURANIMI). At the request of Nanshan Group (‘Nanshan’), a hearing took place between Nanshan and the Hearing Officer for trade proceedings.

(6) The Commission proposed to hold a hearing with parties having adverse interests active in the Automotive heat exchangers aluminium flat rolled products (‘AHEX AFRP’) sector; i.e. Valeo Systèmes Thermiques SAS and related companies (‘Valeo’) and a Union producer. However, the latter party did not agree to participate. Valeo regretted the behaviour of the Union producer and argued that the arguments of Valeo on the (non-)existence of capacity in the Union market should have a higher value as evidence, given that Valeo itself had not refused to be confronted with the Union producer in question.

(7) As Valeo acknowledged, hearing with parties having adverse interests can only be organised when both parties agree to such hearing. As provided by Article 6(6), the fact that a party refuses to participate in such hearing shall not be prejudicial. Valeo’s claim was therefore rejected.

(8) Following definitive disclosure, the parties who so requested were granted an opportunity to be heard. The Commission held hearings with the three sampled exporting producers, two users in the automotive heat exchanger sector and one unrelated importer. A hearing took also place between Jiangsu Alcha Aluminum Group Co., Ltd (‘Jiangsu Alcha’) and the Hearing Officer for trade proceedings at the request of this exporter.

(9) The Commission continued to seek and verify all the information it deemed necessary for its final findings. In this regard, it considered that the company Nilo Asia PTE Ltd/Lodec Metall-Handel Niederlassung Bremen der O. Wilms GMBH (‘Nilo’), that had presented itself as an unrelated importer was actually a trader. In this context, the questionnaire reply of this company was not considered for the definitive findings. However, this company was still considered as an interested party and continued cooperating in the investigation.

(10) Considering that interested parties had had sufficient time to provide comments on other parties’ comments and with the exception of replies to information requests by the Commission, the Commission did not consider submissions filed after 17 June 2021 for its definitive findings.

(11) On 13 July 2021, the Commission informed all interested parties of the essential facts and considerations on the basis of which it intended to impose a definitive anti-dumping duty on imports of aluminium flat-rolled products originating in the People’s Republic of China (‘final disclosure’). Furthermore, interested parties received an additional disclosure on 13 August 2021 (‘first additional final disclosure’) and on 3 September 2021 (‘second additional final disclosure’). All parties were granted a period within which they could make comments on the final and additional disclosures.

(12) Following definitive disclosure, Airoldi Metalli S.p.a. (‘Airoldi’), claimed that its rights of defence had been violated as it did not have the opportunity to comment on documents added to the non-confidential file a day before the definitive findings were disclosed and allegedly taken into account in the general disclosure document. On this basis, it requested the withdrawal of the general disclosure document.

(13) In this regard, it should first be noted that, as mentioned in recital (10), with the exception of document t21.004671, all submissions referred to by Airoldi were not taken into account for the general disclosure document in view of their untimely filing. As far as the claims raised in document t21.004671 are concerned, as can be seen in recital (527), they are of the same nature as claims made by other interested parties including Airoldi. On this basis, it was considered that there was no breach of Airoldi’s rights of defence. Furthermore, following the definitive disclosure, Airoldi had the opportunity to comment on the untimely filed documents referred to by Airoldi in its submission.

(14) On 28 July 2021, the Commission requested Union producers, importers, users and their associations to provide information concerning post-IP developments to allow for an assessment under Article 14(4) in due course.

(15) The comments submitted by the interested parties were considered and taken into account where appropriate in this Regulation.

1.4. Sampling

(16) In recital (35) of the provisional Regulation, the Commission referred to a sample of three Union producers accounting for 35 % of the Union production. That percentage was based on EU28 data.

(17) As provided in Section 1.9, the definitive findings of this investigation are based on EU27 data. Furthermore, as mentioned in recital (191), certain products were excluded from the product scope. On that basis, the three Union producers accounted for over 38 % of the Union production. Therefore, the sample remained representative.

1.5. Request for anonymity

(18) After provisional disclosure, one Union producer which is not in the sample filed a request for anonymity. The justification for this request was that this interested party is concerned about direct public exposure hurting its interests in other countries. Based on the elements provided in its sensitive request, the request for anonymity was accepted. No comments were received.

1.6. Individual examination

(19) In the absence of comments concerning this section, recital (43) of the provisional Regulation was confirmed.

1.7. Verification visit

(20) In addition to the remote cross checks (‘RCCs’) mentioned in recital (48) of the provisional Regulation, the Commission carried out an additional RCC of the user Amcor Flexibles Singen GmbH (‘Amcor’) based in Singen, Germany.

1.8. Investigation period and period considered

(21) One exporter, Southwest Aluminium (Group) Co., Ltd (‘SWA’) claimed that the investigation period (‘IP’) was affected by the COVID-19 pandemic and could not be compared to the other years of the period considered.

(22) The Commission considered the impact of the COVID-19 pandemic in its analysis and addressed comments received in this regard in Section 5.1.2.2 of the provisional Regulation and Section 5.2.2 of this Regulation. On this basis, this claim was rejected.

(23) In the absence of further comments concerning the IP and the period considered, recital (49) of the provisional Regulation was confirmed.

1.9. Change of geographical scope

(24) Since 1 January 2021, the United Kingdom of Great Britain and Northern Ireland (‘UK’) is no longer part of the European Union. Therefore, this regulation is based on data for the European Union without the UK (‘EU27’). The Commission therefore asked the complainant and the sampled Union producers to submit certain parts of their original questionnaire responses with data for EU27 only. The complainant and the sampled Union producers submitted the requested data. As the difference between the macro-economic indicators published in the provisional Regulation and the macro-economic data for EU27 is due to the exclusion of the data from one single UK producer, certain tables in this Regulation are provided in ranges in order not to disclose confidential information related to that producer.

(25) In relation to dumping, only the export sales of the sampled exporting producers to EU27 were considered to calculate the definitive dumping margins.

(26) Finally, for the Union interest assessment, the Commission also enquired about the impact of the UK withdrawal on the questionnaire responses submitted by unrelated importers and users, namely Nova Trading S.A., Airoldi, TitanX Engine Cooling AB (‘TitanX’), Multilaque SAS, Valeo, Company A and Amcor Flexibles Singen GmbH and received updated data, where applicable.

(27) On 12 January 2021, by means of a note to the file (5), the Commission informed companies and associations from the UK that they would no longer qualify as interested parties in trade defence proceedings. No interested party reacted to this note.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Change of the product scope in order to avoid applying two different anti-dumping duties on the same product

(28) The investigation revealed that the anti-dumping measures on AFRPs and the anti-circumvention measures on imports of certain aluminium foil imposed by Commission Implementing Regulation (EU) 2017/2213 (6) slightly overlap in terms of product definition for two TARIC codes, that is under 7607119044 and 7607119071. Although the overlap is extremely minor and only covers coils from 0,03 mm to 0,045 mm when presented with at least two layers, it would be illegal to apply simultaneously and cumulatively two different anti-dumping duties on the same product. Therefore, the Commission decided to correct the product scope of the measures in question in order to solve this issue and remove the coils from 0,03 mm to 0,045 mm when presented with at least two layers. This correction has no material impact on the analysis on the findings of the investigation.

(29) Consequently, aluminium products falling under TARIC codes 7607119044 and 7607119071 were excluded from the product scope.

2.2. Claims regarding the product scope

(30) As indicated in recitals (61) to (105) of the provisional Regulation, several parties submitted product exclusion requests concerning the following products: clad tube, clad plate, clad fin and unclad fin stock for use in the manufacture of automotive brazed aluminium heat exchangers and the manufacturing of electrical vehicles battery coolers (‘automotive HEX AFRPs’); aluminium coils for the production of coated coils and aluminium composite panels (‘ACP’); lithographic sheets; battery sheets; aluminium converter foil of gauge 30 to 60 microns (‘ACF-30-60’) and AFRPs for use in the manufacture of slats for venetian blinds.

(31) Following provisional disclosure, several parties provided comments on the provisional findings of the Commission which are addressed in this section below. Furthermore, four other users; i.e. Amcor Flexibles Singen GmbH (‘Amcor’), Hitachi ABB Power grids (‘Hitachi’), TDK Foil Italy S.p.A. (‘TDK IT’) and TDK Hungary Components Kft (‘TDK HU’) submitted additional product exemption requests relating to the following products: foil stock, AFRPs for use in the production of power transformers and AFRPs for use in the production of aluminium electrolytic capacitors.

2.2.1. Automotive HEX AFRPs

2.2.1.1. Procedural aspects

(32) Valeo claimed that the submissions filed by the European Aluminium association (‘EA’) and Company B further to the provisional disclosure were submitted untimely except for document t21.003825. On the basis of Sections 7.ii and 8.ii of the Notice of initiation, Valeo submitted that the deadline to submit comments on other parties’ submissions and to submit new factual elements coincided and should have been set to 10 May 2021 as far as its submissions are concerned. On this basis, it claimed that EA’s and Company B’s submissions filed after this date should be disregarded for the definitive findings.

(33) The Commission rejected this claim. In line with Section 8, last paragraph of the Notice of initiation and Section 5.7 of the same Notice, last paragraph, the Commission had requested EA and Company B to submit additional information (7) in the form of updates of information already submitted or supporting evidence with regard to certain claims and pieces of information. The additional information was necessary for the proper assessment of claims from other parties. As far as the timing of EA’s comments is concerned, the Commission had granted an extension of the deadline to 28 May 2021 after having received a duly substantiated request (8). These comments were thus filed within the requested deadline.

(34) On 11 June 2021, Valeo provided comments on other parties’ documents t21.003825, t21.004224, t21.004298 and t21.004304. As these documents had been available in TRON more than 7 days before Valeo’s submission, the Commission considered that they had not been filed timely.

(35) Following definitive disclosure, Valeo claimed that the Commission’s reasoning to consider its 11 June comments as untimely filed was contradictory, unsubstantiated and in violation of Valeo’s rights of defence. In particular, it argued that the Commission considered the submission as untimely filed but still addressed its comments so that Valeo could not consider whether the comments had been considered admissible in their entirety and taken into account by the Commission. Furthermore, Valeo referred to the type of documents filed by EA and Company B; i.e. ‘Comments’, ‘Hearing report/Submission’, ‘Submission’ and ‘Rebuttals’. It claimed that the 7-day deadline to comment on the information provided by other interested parties in reaction to the disclosure of the provisional findings mentioned in Point 8.ii of the notice of initiation did not apply to its submission which contained rebuttals to rebuttals and comments on newly submitted information.

(36) In this regard, the Commission considered that the 7-day deadline mentioned in Point 8.ii of the notice of initiation applied equally to both comments on other parties’ submissions and to rebuttals to comments made by other parties. In this specific regard, the Commission confirmed that Valeo’s submission was not filed timely. In any case, as mentioned in recital (10), the Commission considered all submissions received until 17 June 2021. Considering that the Commission thus took Valeo’s comments of 11 June into account, and gave Valeo an opportunity to comment on the Commission’s findings in this regard, the Commission did not consider that Valeo’s rights of defence were violated. This claim was therefore rejected.

(37) Valeo also argued that Company B was allegedly given a very generous and unreasonably long extension of the 7-day deadline. In this regard, it should be noted that Company B’s rebuttals were submitted within the 7-day deadline to comment on other parties’ comments once the latter were available on the open file, and that no deadline extension was granted. This claim was therefore rejected.

(38) Valeo also argued that the Commission cited certain documents which were not published on the record and claimed that this represented a violation of its procedural rights as it considered EA’s submission (t21.004221) as untimely, inadmissible and hence not worthy of a sub-rebuttal. Furthermore, Valeo referred to Section 9 of the Notice of initiation and considered that EA had been favoured in an arbitrary and discriminatory fashion when its deadline to comment on other parties’ comments was extended by 18 days while other parties were generally granted extensions of 7 days.

(39) Valeo’s claim concerning the availability of certain documents was found to be legitimate as the said documents were inadvertently not made available as part of the open file to parties upon definitive disclosure. Such documents were added to the open case file in the meantime. With regard to Valeo’s claim relating to the inadmissibility of the comments and their assessment of such comments, the Commission noted that Valeo had sufficient time to provide comments on other parties’ comments, including EA’s submission, and that it actually commented on other submissions filed several days after EA’s submission. Furthermore, the Commission assesses each deadline extension request individually as the reasons to request such extensions are company-specific and the Commission considered that the circumstances put forward by EA were of a nature to allow the requested deadline extension. In fact, the Commission did not refuse any request for deadline extension in the framework of comments following definitive disclosure. In this regard, the Commission did not consider that it had favoured EA in an arbitrary and discriminatory fashion. These claims were therefore rejected.

(40) Following definitive disclosure, Valeo requested the Commission to consider its submissions made between 11 June and 11 July 2021 (9). The Commission agreed and these comments were taken into account.

(41) In the same respect, TitanX claimed, after the deadline to comment on information provided by other interested parties in reaction to the disclosure of the provisional findings, that the comments submitted by Company B (10) were filed untimely and could not be verified. It invited the Commission to base its findings on the information submitted by interested parties through 10 May 2021. Should the Commission base its findings on the untimely submission of Company B, TitanX claimed that the Commission should also consider the information that it submitted to rebut Company B’s arguments. Furthermore, TitanX also claimed that Company B’s submission violated other interested parties’ rights of defence as it did not identify the documents that it was rebutting or the company targeted by these comments.

(42) In this context, and as mentioned in recital (10), the Commission did not consider submissions filed after 17 June for its definitive disclosure. Yet, in order to ensure the rights of defence of all interested parties, TitanX’s comments filed on 21 June 2021 were taken into account, where appropriate, as comments following final disclosure. Thus, the Commission confirmed that it took into account all submissions made by interested parties in this Regulation.

(43) As far as rights of defence are concerned, the Commission did not consider that Company B’s submission violated other parties’ rights of defence. To the contrary, Company B’s submission, by not identifying other interested parties specifically, ensured that business secrets, whose disclosure could be detrimental to any or both parties, were not disclosed. Also, considering that the number of parties to this investigation active in the AHEX AFRP sector is limited and considering that the comments submitted by Company B were specific enough to allow other parties a reasonable understanding of their substance, the Commission did not consider that such comments breached the rights of defence of other interested parties. On this basis, this claim was rejected.

2.2.1.2. Analysis of the claims

(44) After provisional disclosure, comments were received from three users, the automotive supplier association, the European Automobile manufacturers’ association (ACEA), BMW, one non-sampled exporter, Shanghai Huafon Aluminium Corporation (‘Huafon’), and EA.

(45) Various parties claimed that AHEX AFRPs and other in-scope commodity AFRPs belong to different classes of products as they have different characteristics in terms of alloys, different R&D and validation processes. The exporting producer Huafon claimed that 95 % of the HVACR (11) and other applications do not utilise brazing as a joining technology for HEX AFRPs and resulted from a different manufacturing process. It also claimed that HEX applications in the HVACR and other segment do not use clad fin and clad tube. The same exporting producer claimed that a very high share of European AFRP sales consists of standard products as defined in the complaint which contradicts the Commission’s statement in recital (69) of the provisional Regulation that most AFRPs have their own specifications depending on the application or requirements of the end-user concerned. Huafon added that the Union producers were not prepared to supply the unique products that they export.

(46) These parties also claimed that these differences lead to a lack of interchangeability.

(47) The Commission referred to its initial assessment that AHEX AFRPs share the same basic chemical, technical and physical characteristics with other AFRPs falling within the scope of the investigation (see recitals (67) to (68) of the provisional Regulation). Furthermore, these products are similar to HEX AFRPs, which also fall within the scope of the investigation. These are used for other applications such as HVACR which are composed of similar alloys (whether cladded or not) and are manufactured on the same production equipment. Also, as mentioned in recital (73) of the provisional Regulation and confirmed by EA, AHEX AFRPs are not the sole products sold to Tier 1 (that is the biggest on the market) automotive suppliers, which, among many other products need to go through a R&D and validation process.

(48) Huafon’s claims relating to HVACR were not substantiated. In any case, the evidence on file shows that AHEX AFRPs and HVACR AFRPs share the same basic chemical, technical and physical characteristics and that they are manufactured using the same production equipment. In addition, publicly available sources (12) contradict the claim that HVACR AFRPs do not utilise brazing as a joining technology. Also, Huafon did not provide any supporting evidence to the claim that a very high share of European AFRP sales consisted of standard products nor that their products could not be manufactured by the Union industry or substituted with other products.

(49) As far as interchangeability is concerned, the Commission referred to recital (70) of the provisional Regulation. Similarly to other in-scope products, AHEX AFRPs may not be interchangeable with other AFRPs as they may have their own specifications depending on the application or requirements of the end-user concerned. However, as indicated by EA, this does not make them unique and it does not imply that they do not share the same basic physical, chemical and technical characteristics as other products that fall within the scope of the investigation. In that regard, EA also argued that AHEX AFRPs are interchangeable with other HEX AFRPs as they are similar in chemical composition and/or as regards their specifications within the technical tolerances relevant for the specific applications. On this basis, these claims were rejected.

(50) TitanX and Valeo claimed that, in line with existing case law (13), the Commission should not attribute decisive importance to the existence of allegedly identical basic physical, technical and chemical characteristics of the two classes of product. The same parties also claimed that the Commission failed to explain which other elements are decisive to conclude on the existence of the same basic features between the two classes of products.

(51) At the outset, it must be recalled that the basic Regulation does not directly define the concept of the ‘product concerned’ and that the Commission has considerable discretion in this area, provided only that ‘the requirement that the product under consideration be homogeneous should not be entirely excluded from the interpretation of the basic Regulation’ (14). Furthermore, the case law relied on by the interested parties states that the physical, technical and chemical characteristics are ‘naturally important’ but does not necessarily have priority. Indeed, there are a range of factors the Commission may rely on, but these are indicative and the Commission is under obligation to determine the product concerned using all of those criteria. Importantly, it necessarily follows that products which are not identical may be grouped together under the same definition of the product concerned, and the examination of whether a specific product has been validly included is to be based on the characteristics of the product concerned as defined by the Commission (15). In its analysis in the present case, the Commission did not rely solely on the fact that AHEX AFRPs share the same basic physical, technical and chemical characteristics as other AFRPs. Indeed, the Commission established that: (1) AHEX AFRPs belong to the product group of HEX AFRPs which includes not only automotive HEX but also HEX destined for HVACR and other applications and that these products can be clad or unclad; (2) the types of alloys used for AHEX AFRPs are similar or closely resembling other alloys used for other in-scope AFRPs; (3) AHEX AFRPs are produced by using the same manufacturing process as described in recital (56) of the provisional Regulation and use to a large extent the same equipment as other AFRPs; (4) it is not a niche product; (5) similarly to other in-scope AFRPs, it is sold to Tier 1 automotive suppliers and/or follows a validation process; and (6) their price was not significantly higher than the other products within the product-scope of AFRPs.

(52) On that basis, the claim by TitanX and Valeo was rejected.

(53) Various parties claimed that the Commission’s assessment on Union production capacity was based on incorrect facts and lacked reasoning. They indicated that the conclusions were not supported by record evidence or were insufficiently reasoned and that other interested parties could not comment on such data.

(54) TitanX and Valeo claimed that the Commission should not have relied on DG COMP’s decision regarding the acquisition by Gränges of Impexmetal as such decision assumed the presence of other supplying parties including Chinese producers and the situation on the AHEX AFRPs market has changed significantly as EU suppliers lack available capacity and Chinese suppliers do not represent anymore a viable supply option following the imposition of AD measures.

(55) The Commission’s finding that the Union industry has sufficient capacity to meet the current demand as mentioned in recital (75) of the provisional Regulation is not solely based on the Commission decision regarding the merger of Gränges and Impexmetal (16). Indeed, it also relied on other information (17) already on the file when the Commission reached its provisional conclusions (and confirmed by the above mentioned Commission decision). Furthermore, it relied on additional information supplied after the provisional disclosure which confirmed and supported the provisional Commission’s assessment. It should be noted that interested parties had the opportunity to comment on such new information (18).

(56) Valeo also claimed that the Commission ignored the extensive information pointing to a lack of available capacity in the provisional Regulation. Valeo and TitanX also provided additional documents pointing to increased lead times and capacity issues in the form of e-mail extracts. In this regard, the Union industry argued that the slightly increased lead times and the temporary capacity issues were linked to the sudden and strong post-COVID recovery. This led to an overall increase in demand. Other elements, such as a container shortage in the PRC, also contributed to an additional increase in demand in the EU. The Union industry also explained that the requested volumes went beyond the agreed volumes and that, considering the post-COVID situation, such increase in demand could not be absorbed instantly without increasing the workforce. In order to do so, the Union industry claimed that it needed medium term visibility in the form of signed contracts, and not spot orders, to determine the expected volumes and required workforce. Also, the Union industry provided satisfactory explanations showing that certain e-mail extracts provided by users could be misinterpreted as pointing to a structural lack of capacity but actually related to a temporary shortage situation.

(57) Following definitive disclosure, Valeo claimed that it could not be blamed for requesting volumes that go beyond the contractual agreements and that there is an increasing need for AHEX AFRP due to the boom in demand in the electric mobility sector. Valeo also added that the inability of the Union industry to quickly adapt to the increasing demand was the most clear sign of the major and structural capacity constraints faced by the Union industry.

(58) In this regard, even if considering allegations about post-IP developments, the Commission considered that the Union industry was adapting to the increase in demand and that the capacity constraints were of a temporary nature. Indeed, those allegations showed that users were negotiating new contracts with the Union industry. On this basis, this claim was rejected.

(59) In addition, the Union industry argued that the main users of AHEX AFRPs claiming a lack of capacity did not submit requests for quotations pertaining to additional volumes to be delivered on top of the already existing contract volumes to the majority of the AHEX AFRPs suppliers. This claim undermines the lack of available capacity. In any case, the Commission observed that it appears from the information on file that certain users could source or are planning to source additional quantities from the Union industry. Consequently, the Commission rejected the claim that the Union industry does not have sufficient production capacity.

(60) Following definitive disclosure, Valeo explained that the fact that it had not launched formal requests for quotations was linked to the numerous refusals that it had faced and was therefore expecting a negative reply. Furthermore, Valeo argued that it engaged in negotiations for the delivery of AHEX AFRPs with a Union producer.

(61) In this regard, the Commission considered that Valeo’s comment was speculative and could not be considered as supporting evidence relating to requests for quotations. The Commission also noted that the negotiation to which Valeo referred did not relate to additional volumes but to a contract renewal after the IP and, thus, those allegations were rejected.

(62) After the deadline to comment on information provided by other interested parties in reaction to the disclosure of the provisional findings, TitanX claimed that the terms of its new contract were less favourable than past contracts and that the new contract did not solve the problems posed by the entry into force of provisional anti-dumping duties. Also, it argued that the new contract did not fully address the supply issue as TitanX would have to continue sourcing at artificially high prices from the PRC for a given period of time.

(63) After the deadline to comment on information provided by other interested parties in reaction to the disclosure of the provisional findings, Valeo reiterated that the Union producers do not have the capacity to meet the entirety of the EU demand for AHEX AFRPs and provided sensitive documents describing certain capacity issues and commercial behaviours.

(64) Following definitive disclosure, TitanX claimed that the capacity issue faced by the Union industry should not be considered as temporary in view of its duration. It reported other recent issues having an impact on its supply chain and complained about the opportunistic and abusive behaviour of certain major Union producers.

(65) Following definitive disclosure, Valeo claimed that the reasons invoked by the Commission to refute Valeo’s claim of lack of capacity (post-COVID recovery, freight costs and unavailability of raw materials) did not address the many instances documented on the record allegedly pointing to chronical and systemic capacity issues experienced by Union producers.

(66) In this respect, even if considering allegations about post-IP developments, the Commission considered that, given its duration, the situation described by TitanX and Valeo was not of a systemic, chronical or structural nature but rather a temporary situation allowing the Union industry to adjust to the new market situation in a context of strong post-COVID economic recovery. This is also evidenced by the situation described in recital (61) pointing to a temporary issue linked to the imposition of provisional anti-dumping measures. Thus, the Commission confirmed its findings on the basis of the evidence during the IP and rejected this claim.

(67) As for the other issues referred to, even if considering information about post-IP developments, the Commission did not consider that they would correspond to abnormal business relationship developments in general but rather to negotiation practices in a period of tension on the market. Thus, the findings made on the basis of the evidence during the IP would remain unchanged. In any case, as mentioned in recital (552), it should be recalled that the purpose of anti-dumping measures is to restore a fair and level playing field, their result normally being an increase in prices on the Union market.

(68) Furthermore, as mentioned in recital (56), the Commission did not invoke reasons such as freight costs and unavailability of raw materials to refute Valeo’s claim on lack of capacity. As mentioned in recital (152), such elements were used to explain the recent price increase, not the lack of capacity. On the contrary, the Commission relied on the post-COVID economic recovery to explain the current market situation. On this basis, these claims were rejected.

(69) Following definitive disclosure, Valeo also claimed that the Commission failed to consider all evidence on the record and failed to provide sufficient and consistent reasoning in support of its findings on the AHEX AFRP capacity. It added that the Commission is under an obligation to consider all opposing data on the record and decide which ones have the highest evidentiary value. In particular, Valeo first complained about the allegedly ‘extremely’ deficient public summaries of certain documents (19) used by the Commission for its findings. In this regard, Valeo considered that the use of such redacted information constituted a violation of Valeo’s rights of defence. Furthermore, Valeo claimed that the 54 % production capacity utilisation reported by the Union industry for AHEX AFRPs in 2020 contradicted the alleged ‘temporary’ capacity issues faced in the first part of 2021 and could not be explained by the ‘sudden and strong post-COVID recovery’. In this regard, Valeo pointed to self-inflicted injury when the Union industry was allegedly not able to supply in 2021 while it had such a low utilisation rate in 2020.

(70) The Commission disagreed and considered that it had taken all the relevant evidence on the record into account in order to reach meaningful and impartial conclusions based on sufficient and consistent reasoning. First, the Commission considered that the open version of the documents it relied on contained a summary of the sensitive information that allowed all interested parties a reasonable understanding thereof. The Commission also noted that Valeo did not request a revised open version of such documents. In this regard, the Commission did not consider that Valeo’s rights of defence had been violated. As far as the capacity utilisation rate and alleged self-inflicted injury were concerned, it should first be noted that, as mentioned in recital (117), the Commission did not rely on EA’s submission showing a 54 % capacity utilisation in 2020 to assess production capacity but conservatively relied on the shipments by the Union industry. Furthermore, it should be noted that the contradiction described by Valeo corresponds to 2 different years (2020 vs 2021) where the economic situation differed significantly, leading to very different levels of growth and demand for AFRPs.

(71) Furthermore, TitanX contested some statements made by Company B regarding alleged difficulties to source from the PRC due to factors such as the container shortage or supply difficulties with Chinese suppliers. It also contested statements that Company B’s delivery situation had improved and that HEX producers had not exhausted the options to find additional sourcing from other Union producers or that the requested volumes for 2022 would be lower than in 2021.

(72) The Commission considered that the unsupported and contradictory allegations made by Company B and subsequent rebuttals by TitanX related to company-specific elements within a business relationship which the Commission could not verify.

(73) Valeo also argued that EA had misled the Commission on their available capacity with false submissions in this regard. EA claimed that Valeo’s allegations concerning its submissions were false and unacceptable. It also argued that these claims were not substantiated with evidence on the open file. The Commission confirmed EA’s comment and rejected Valeo’s claim in this regard.

(74) Various interested parties claimed that the Union industry’s investments would not be sufficient to meet the projected increase in demand driven by the switch from internal combustion engine (‘ICE’) vehicles to electric/hybrid vehicles by 2026. In the same context, ACEA considered that the increase in demand would exacerbate the capacity issues.

(75) TitanX claimed that there is a lack of available capacity for the supply of AHEX AFRPs for the manufacturing of powertrain cooling solutions for commercial vehicles. The demand for such product is expected to grow in 2021 and the trend is expected to continue in 2022.

(76) In this regard, Valeo and the Union industry provided their consumption projection until 2026 as far as AHEX AFRPs are concerned. These projections were based on the number of light vehicles per engine type to be produced and on the weight that AHEX AFRPs will represent for each engine type (internal combustion, electric, full hybrid, plug-in hybrid, mild hybrid, etc.).

(77) Based on the Union industry’s projection, AHEX AFRP consumption/demand is expected to increase from [195 – 215] (20) thousand tonnes in 2019 to [220 – 270] thousand tonnes in 2026 corresponding to an overall 28 % increase. In its detailed calculations, the Union industry provided the AHEX AFRP weight per car (based on market intelligence provided by members of European Aluminium) and the expected vehicle production volume by engine type (based on Ducker Frontier/LMC Automotive (21) August 2020) in a transparent way. In its turn, Valeo only indicated that the Union total available capacity, would be on average 17 % lower than demand over the period 2021-2027 without providing other information on which other parties could comment.

(78) As mentioned in recital (34), Valeo’s submission of 11 June 2021 was not filed timely and part of the comments raised related to a document on capacity and supply projections (22) added to the file by EA before provisional disclosure, and to which Valeo already had access.

(79) In its other comments, Valeo agreed with the consumption volume for the year 2019 and considered that it was also valid for the year 2021. However, Valeo considered that EA’s split of the production volume between ICE and other hybrid vehicles (around 50 % vs 50 %) was incorrect as the share of hybrid vehicles would be much higher in 2026 (around 73 % vs 27 %). In this regard, it referred to IHS Markit, a market intelligence company allegedly consulted by the entirety of the automotive industry and which it used in its projection (23). It could however not be ascertained that the information was provided by IHS. In any case, Valeo’s calculations of the share of ICE vehicles in 2026 based on EA’s projection is inaccurate. Indeed, EA’s projection is that ICE vehicles will represent 40 % (and not 50 %) of the production. Furthermore, Valeo’s claim that EA’s total production projection would be in the area of 16 million vehicles in 2026 is also wrong as EA reported a total output of around 20 million for that period.

(80) In a search for another source of information, the Commission consulted an article published by the Boston Consulting group (‘BCG’) (24), provided by the European association of automotive suppliers (CLEPA), which confirmed that the share of non-ICE vehicles will increase in the coming years. According to this source, the projected market share of ICE vehicles (diesel and gasoline) will decrease to 36 % in 2025; i.e. much closer to EA’s figure than to Valeo’s. Consequently, the Commission found that EA’s projections of the future market developments regarding ICE reflected more closely what are currently expected to be the future trends in the next 5 years.

(81) Valeo also claimed that EA considered that ICE and hybrid vehicles require an equal volume of AHEX AFRPs which is allegedly in contradiction with information shared between Company B and Valeo, which points to a higher AHEX AFRP weight and need for hybrid vehicles than for ICE vehicles.

(82) In this regard, it should first be noted that EA did make a distinction in the consumption of AHEX AFRPs between ICE and hybrid vehicles and considered that hybrid vehicles would on average require more AHEX AFRPs than ICE vehicles. Second, the information shared between the Union producer Company B and Valeo cannot be considered representative of the actual difference between standard ICE and hybrid vehicles. Indeed, this information refers only to a given product using AHEX AFRPs (chiller) and the mentioned quantities represent only an insignificant part of Valeo’s purchase volume for the year 2019 or the IP. Also, the impact of the size of the project and a potential increase in the number of pieces ordered by the downstream OEM user could not be established. Third, the investigation revealed that the weight of AHEX AFRPs per model will vary depending on the type of hybrid vehicle (mild/plug-in/full hybrid). As a matter of fact, mild hybrid vehicles require only slightly more AHEX AFRP than ICE vehicles and they will represent a major share of the non-ICE vehicles up to 2026. On this basis and in the absence of other comments concerning the quantity of AHEX AFRPs required per type of vehicle, the Commission considered that the EA’s estimate regarding the consumption ratio for different types of vehicles was reasonable.

(83) As far as existing capacity and additional capacity investments are concerned, some parties claimed that the Commission should not extrapolate the data of the sampled Union producer Elval to the whole Union industry. Also, Valeo claimed that, based on ‘extremely accurate and conservative data’, the investment plan presented by Company B was not sufficient to cover the forecasted demand for AHEX AFRPs between 2022 and 2025, based on its consumption projection. In its turn, CLEPA claimed that the Union industry did not substantiate its investments to expand capacity by compelling evidence or sufficient reasoning. Valeo also claimed that Company B’s statement that they are currently approaching the maximum machinery park capacity was in contradiction with the reported capacity utilisation presented in document t21.004224 where Company B reports an [80-88 %] capacity utilisation forecast for 2021.

(84) First, it should be noted that the Commission did not extrapolate Elval’s data to the Union industry and considered such information for Elval only. Furthermore, as far as Company B’s data is concerned, Valeo relied on an inaccurate assumption relating to the allocation of production capacity to AHEX AFRPs. Indeed it considered the [60-70 %] allocation to HEX applicable only in 2021, for the entire 2022-2026 period while Company B indicated that the extra installed capacity would be allocated to HEX depending on the commercial conditions but at least growing with the demand. By doing so, Valeo underestimated by [30-40 %] the installation of additional capacity for HEX products.

(85) Further to CLEPA’s comments, the Commission requested the Union industry to complement the sensitive information already available on file in the form of questionnaire replies, mission exhibits and other sensitive documents with additional evidence available to other parties as well as to clarify certain figures and make certain corrections. The additional information provided by EA (25) and Company B (26) confirmed the provisional findings.

(86) Besides, the Commission failed to see the contradiction between the capacity utilisation forecast and Company B’s statement. Indeed, contrary to Valeo’s claim, Company B does not state that it is at full capacity rather that it is currently approaching such capacity utilisation while the [80-88] % capacity utilisation forecast relates to the year 2021 as a whole; i.e. the situation in a given moment (when Company B is currently approaching full capacity) should not be extrapolated and compared to a forecast relating to a full year.

(87) To summarise, the Commission compiled the following demand and supply forecasts (‘FC’) for the years 2021 and 2026. Table 1 Supply and demand for AHEX AFRP in the EU (1 000 tonnes) 2021 FC 2026 FC without imports from the PRC 2026 FC with imports from the PRC 2026 Valeo FC without imports from the PRC 2026 Valeo FC with imports from the PRC Demand [200 - 220] [265 - 275] [265 - 275] [295 - 315] [295 - 315] Imports from China [20 - 30] [20 - 30] [20 - 30] Imports from Turkey [15 - 25] [15 - 25] [15 - 25] [15 - 25] [15 - 25] Union capacity [180-200] [180-200] [180-200] [195-215] [180-200] Additional capacity [50 - 70] [50 - 70] [50 - 70] [50 - 70] Surplus (shortage) [15 - 25] [5 - 10] [25 -35] -[10 - 20] [5 - 15] % of demand 9,5 % 2,3 % 11,7 % -5,5 % 2,7 %

(88) The sources for the above values are the following. For the above table, demand was based on EA’s consumption projection (27) adapted to BCG’s split between ICE and non-ICE vehicles. Valeo’s consumption projection (28) was reported as submitted.

(89) After the deadline to comment on information provided by other interested parties in reaction to the disclosure of the provisional findings, Valeo provided revised forecast figures based on a May 2021 market report from research firm IHS Markit. On the basis of that report and Valeo’s projected AHEX AFRP weight per car engine type, Valeo claimed that demand would reach [320 – 350] thousand tonnes in 2026 following an expected increase in car production and an acceleration of the electrification trend. On this basis, it claimed that EA’s demand projection was underestimating future demand even more and reiterated that the Union industry could not meet current demand and supplied email exchanges in this regard. Valeo also reiterated that the Union industry’s planned investments were insufficient to meet future demand.

(90) Following definitive disclosure, Valeo further contested the Commission’s reliance on the BCG article to reject Valeo’s estimates of future AHEX AFRPs demand on various grounds and considered that the Commission’s demand estimate was outdated and should be revised in light of the new forecast provided. Furthermore, Valeo referred to the ‘Fit for 55’ legislative package under the European Green Deal as an important development not taken into account in other forecasts and which specifically included proposals aiming at a reduction of the net greenhouse emissions and a reduction of the average emissions of new cars by 55 % from 2030 and 100 % from 2035 as compared to 2021. In this context, it argued that the demand projection of Table 1 and recital (87) was obsolete and that future projections would significantly increase as a result of the Green Deal. In this context, it requested the Commission to use Valeo’s demand forecast based on the May 2021 IHS Markit report which showed a faster increase in future demand for AHEX AFRPs than the reports provided previously by Valeo or EA. Furthermore, Valeo argued that IHS Markit was a better source than Ducker and LMC Automotive (‘LMC’), that it was more up to date (at the time of submission) and it was accessible to other parties (through meaningful non-confidential versions or upon purchase).

(91) Valeo’s reiterated claim (see recital (89)) that the Union industry could not face current demand was already addressed in recitals (64) to (66).

(92) Further to Valeo’s comments relating to the existence of more up to date information, EA was requested to provide an updated demand forecast. The demand forecast EA provided was based on two sources; IHS Markit Light Vehicle Production Forecast of 5 July 2021 and DuckerFrontier (May 2021) based on LMC Automotive Q1/2021. The IHS Markit data was highly detailed and included the forecast production volumes per country of production, thus allowing the identification of the volume to be produced in the Union. The LMC automotive Q1/2021 data set did not relate to the Union market only and was adjusted downward on the basis of the IHS Markit production forecast of 5 July 2021 to correspond to EU27. Furthermore, the LMC Automotive data was also used to establish the split between the different engine types. On the basis of these updated statistics and on the basis of EA’s AHEX AFRP weight per car engine type, EA projected that the demand would increase from [188 – 195] thousand tonnes in 2019 to [222 – 263] thousand tonnes in 2026.

(93) Further to the EA’s submission, Valeo commented that the lower limit for 2026 was below the demand estimated by the Commission in Table 1 and that this value was illogical in view of the expected growth in demand due to the electrification of the automotive sector.

(94) In this regard, the Commission noted that, contrary to previous demand projections, EA’s latest projection related exclusively to the EU27, which explained why, despite showing a significant increase in demand, the projection started from a lower level. Therefore, the Commission considered that EA’s estimate was logical as it showed an increase in demand over the period 2019 – 2026 in line with the electrification trend.

(95) Valeo also claimed that the sources used by EA pre-dated the Commission’s announcement of the Fit for 55 Green deal of 14 July 2021 and that EA was aware of that announcement, but that EA had not taken that element into account in its estimate of the demand. On this basis, it argued that EA had not cooperated to the best of its abilities. Furthermore, Valeo requested the Commission to estimate future demand either on the basis of the IHS Markit report referred to in recital (90) after updating it upwards to take account of the Green Deal impact or on the basis of the newly submitted (29) updated LMC Automotive statistics of 29 July 2021 which allegedly considered the impact of the Green Deal. On this basis, Valeo demand estimate for 2026 reached [340 – 380] thousand tonnes.

(96) The Commission considered that EA had cooperated to the best of its abilities as EA had used the most recent IHS Markit statistics at its disposal. In any case, according to Valeo and a ‘leading industry association’, IHS Markit is a better source than Ducker and LMC. Furthermore, the Commission considered that the information provided by EA was sufficiently recent to estimate future demand as accurately as possible. In addition, Valeo did not provide evidence showing that the Green Deal announcement had not been anticipated by research firms such as IHS Markit or LMC, especially when considering that they produce such reports on a regular basis and that the Green Deal announcement only formalised what market experts had already anticipated before (30). Furthermore, as indicated by Valeo, precise future forecasts would in any event be subject to discussions with its OEM customers to determine future needs.

(97) The Commission also considered the most recent forecasts provided by Valeo but rejected them as the analysis of the information supplied by Valeo referred to in recitals (89) and (95), and which was supported with underlying data in its comments on definitive disclosure, showed that its demand estimates (whether based on IHS Markit or LMC) were overestimated as they did not relate to engine installation or car production in the Union, but also included engine installation or car production in other countries such as the UK, Russia and Turkey. As a matter of fact, the IHS Markit reports used by Valeo overestimated the yearly engine installation in the Union by over 18 % over the period 2021-2026. While the provided LMC reports did not allow a distinction per car production country, they clearly referred to a greater geographic scope than the Union as they included CIS countries and presumably other countries, such as the UK and Turkey, where car production is taking place in significant quantities. On this basis, it was considered that the geographical scope of these statistics was too broad and should not be used in order to assess AHEX AFRP demand in the Union. In this context, the Commission considered that the projected demand supplied by EA, as mentioned in recital (103), was more appropriate as it related to the EU only and, it was based on a sufficiently recent IHS Markit report, which, as mentioned in recital (90), Valeo considers a better source than Ducker and LMC.

(98) Following definitive disclosure, TitanX claimed that the Commission’s demand forecast was obsolete and did not take commercial vehicles into account. It referred to the European Green Deal and to the announced legislative proposals aiming at reducing greenhouse gas emissions in general and in the automotive sector in particular. In this context, it claimed that the new emission targets would increase the pace of electrification in the automotive industry and lead to an increase in demand for AHEX AFRPs. In this respect, it invited the Commission to consider Valeo’s demand forecast mentioned in recitals (89) and (104).

(99) As far as TitanX’s claim relating to commercial vehicles is concerned, as mentioned in recital (115), the Commission took only 85 % of the average shipment volume to the EU destined for transport into account in order to conservatively assess the demand for light vehicles only. As such, the remaining 15 % included the shipments destined for commercial vehicles. In the absence of any information pointing to different conclusions in this regard or evidence concerning the future demand for commercial vehicles, it was considered that the Union industry had sufficient capacity to serve demand for this particular sector. Therefore, this claim was rejected.

(100) Following additional disclosure, Valeo and CLEPA contested the Commission’s approach to exclude car production in countries such as Turkey, Russia and the UK from its calculations. In this regard, Valeo argued based on Eurostat statistics and its own records that there are significant exports of HEX components to Russia, Turkey and the UK. Also, it argued that there is very limited HEX components production in these countries and that these countries heavily rely on imports from the Union. In its turn, CLEPA claimed that the vehicle production outside the Union is responsible for a significant share of production by automotive suppliers in the EU and that there is limited production capacity for AHEX outside the EU. CLEPA also claimed that the share of EU parts or EU added value in vehicles produced in the UK, Russia or Turkey was significant. Hence, CLEPA claimed that exports generate significant revenues for EU automotive suppliers and that production of automotive suppliers should not just be determined by vehicle production in the EU itself, but by the wider region as well. On this basis, Valeo and CLEPA argued that the demand for AHEX AFRPs should be based on the actual needs of AHEX producers regardless of the destination of their products. Furthermore, Valeo argued that if AHEX destined for export were not taken into account, Union interest would not analysed properly.

(101) As mentioned in recital (145), the Commission acknowledged the existence of exports of HEX components by certain AHEX producers. However, the Commission disagreed with the fact that the car production in these countries should be taken into account as a whole for the assessment of the demand in the EU. Indeed, the claim that such countries heavily relied on imports from the Union was not substantiated with supporting evidence. As acknowledged by Valeo, the Eurostat statistics did not relate exclusively to AHEX and included other products. While acknowledging the existence of AHEX production capacity in these countries, Valeo did not quantify the production capacity of the domestic AHEX producers that it mentioned. In addition, it could not be excluded that these markets would not be supplied by domestic AHEX suppliers (31) other than those quoted by Valeo or by non-EU AHEX producers. On this basis, the Commission considered that Valeo had not demonstrated that AHEX producers located in the Union were supplying these countries in such proportions that such markets were heavily relying on the Union producers of AHEX. Furthermore, the Commission considered that CLEPA’s claims were not specific enough as they did not relate to AHEX in particular but rather to the export activities of automotive suppliers in general.

(102) Based on the elements on file, the Commission recognised the existence of certain commercial links between AHEX producers located in the Union and car manufacturers in countries such as Russia, Turkey and the UK. However, in the absence of specific information allowing the identification of the AHEX exports to these countries, the Commission could not base its findings on the geographical scope referred to by Valeo in its projected AHEX AFRP demand. In any case, the Commission considered that the demand on the Union market should primarily be based on the car production in the Union, especially in the light of the Green deal, which concerns the Union exclusively. Furthermore, the analysis of demand as presented in recital (127) and supply as presented in Table 1 would still allow the Union industry to supply additional quantities necessary to produce AHEX to be exported. Moreover, AHEX producers in the Union can apply for an authorisation to import AFRPs under the inward processing regime which, if granted by the customs authorities in accordance with customs legislation, would allow them to then export the resulting AHEX without being subject to the anti-dumping duties. Therefore, the burden and financial impact on the export activities of AHEX producers would be very limited. On this basis, Valeo’s and CLEPA’s claims were rejected and the Commission considered that Union interest had been assessed properly.

(103) On 12 August 2021, EA provided an updated AHEX AFRP demand forecast based on a more detailed IHS Markit Light vehicle production report identifying the engine types. That report was issued at the same time as the 5 July 2021 report mentioned in recital (91) and these reports were consistent. On that basis, EA’s lower end forecast increased from 222 to 232 thousand tonnes. EA’s forecast based on DuckerFrontier/LMC Automotive Q1/2021 remained identical at 263 thousand tonnes.

(104) When comparing the 5 July 2021 IHS Markit with the 29 July 2021 LMC split per engine type, the Commission observed that the LMC data, which allegedly took the Fit for 55 legislative package into account, still projected a much higher share for ICE (40 %) for the year 2026 than the IHS Markit data of 5 July (22 %) published before the Fit for 55 legislative package announcement and used by EA for its projection.

(105) On the basis of the above, the Commission considered that it was difficult to foresee the level of the AHEX AFRP demand for 2026 with a high degree of accuracy as there are still a number of uncertainties with regard to the implementation of the Fit for 55 legislative package into the electrification of mobility and the light vehicle car production in particular. In any case, the Commission considered that EA’s forecasts on demand, whether based on the latest IHS Markit data available as recommended by Valeo or on the higher values of the LMC data, were reasonable.

(106) Following additional disclosure, Valeo commented that the Commission’s observations relating to the 29 July 2021 LMC data were incorrect. Valeo pointed out that the LMC data did not relate only to the EU27, but also took the slower automotive electrification efforts in Turkey and Russia into account, resulting from the absence of legislation equivalent to the Green Deal. On this basis, Valeo claimed that the LMC data was complete and reliable, and should therefore have been taken into account by the Commission. Furthermore, it claimed that the Commission did not present relevant data relating to the share of ICE, electric and hybrid vehicles and that the Commission should consider the LMC data in its assessment of the forecasted demand for AHEX AFRPs on the grounds that, while IHS Markit is the most authoritative source, the LMC data are the only data on the record that quantify the impact of the Green Deal announcement.

(107) In the absence of available LMC data per country of production, the Commission was not in a position to confirm Valeo’s comments relating to slower pace of electrification in Russia and Turkey allegedly taken into account by LMC. In any event, as mentioned in recitals (97) and (101), the Commission considered that the geographical scope of the LMC data was inappropriate in order to assess domestic demand; that the information provided by EA was sufficiently recent to estimate future demand; and that there are indications that market experts had anticipated the Green Deal announcement. Besides, Valeo did not provide evidence showing that the Green Deal announcement had not been anticipated by research firms such as IHS Markit. In the absence of appropriate LMC data; i.e. limited to EU27, the Commission thus considered IHS Markit data of 5 July as the most recent and most appropriate basis for assessing the AHEX AFRP demand in 2026. In addition, the Commission also notes that Valeo cannot logically consider IHS as a more authoritative source than LMC and then request the Commission to use LMC data, especially when its geographical scope is inadequate. On this basis, this claim was rejected.

(108) Following additional disclosure, Valeo also provided new simulations regarding the capacity and investment projections of the Union industry based on the 29 July 2021 LMC data. Valeo claimed that the Union industry could not meet future demand in the period 2021-2027 even if car production volumes were reduced by 18 %.

(109) In this regard, it should be noted that such submission of new simulations was made after the deadline for comments on the definitive disclosure and that the additional disclosure did not relate to Union capacity or investments. On this basis, these elements could not be taken into account. In any case, as set out in recital (107), the LMC data could not be accepted. Furthermore, the Commission considered that the LMC data, even when reduced by 18 %, still overestimated the projected EU27 demand significantly. Indeed, on the basis of the latest IHS Markit data (05 July 2021), production in non-EU countries over the period 2021-2027 represented between 26,8 and 30,5 % of the EU car production, as opposed to 18 %. On the basis of the above, this claim was rejected.

(110) Following additional disclosure, Valeo and CLEPA claimed that the Commission’s conclusion that Union demand could be absorbed by the projected Union industry’s capacity and projected imports from third countries was vitiated by a lack of reasoning and not supported by any quantitative analysis. More specifically, Valeo claimed that, contrary to the general disclosure document, the additional disclosure did not contain an equivalent summary to Table 1, which did not allow Valeo to properly exercise its rights of defence and comment on the sufficient capacity in the EU for meeting demand of AHEX AFRPs. In addition, Valeo claimed that the additional disclosure did not address the ‘dozens of emails and other evidence submitted by Valeo’ regarding the repeated refusal by Union producers to supply sufficient quantities of AHEX AFRPs. By not properly assessing such evidence, Valeo claimed that the additional disclosure was vitiated by insufficient reasoning and by a manifest error of assessment of the facts.

(111) In this regard, the Commission considered that the additional disclosure document contained sufficiently detailed information relating to the submissions made following the general disclosure document and that parties could easily refer to the parties’ original submissions. Furthermore, the additional disclosure document, as reflected in recitals (92) and (98), reported the latest projected AHEX AFRP demand as submitted by EA. The Commission had used information that was available to parties and Valeo could simply replace the projected demand, contained in Table 1 for the year 2026, by the information contained in the additional disclosure document, that also referred to the submissions by EA. Therefore the Commission considered that the additional disclosure contained the necessary reasoning and quantitative analysis. As far as Valeo’s rights of defence are concerned, the Commission considered that the additional disclosure was sufficiently detailed to allow Valeo to exercise its rights of defence. Moreover, the additional disclosure concerning the Union industry’s capacity did not contain any new elements not already available on the open file.

(112) Furthermore, the Commission considered that the evidence supplied by Valeo with regard to the supply difficulties did not justify an additional disclosure as the nature of those claims was not new. Those claims were already addressed in recital (91).

(113) Valeo also claimed that the additional disclosure’s findings were illogical and lacked sufficient and adequate reasoning. In essence, it claimed that since the Commission had concluded that the Union industry would not have sufficient capacity to meet a demand of [295 – 315] (32) thousand tonnes, it could not absorb a higher demand based on Valeo’s projections of up to [340 – 380] (33) thousand tonnes. On this basis, it claimed that the Commission was neglecting the impact of the Green Deal.

(114) As mentioned in recital (97), the Commission considered that Valeo’s previous and latest demand projections were not based on an appropriate geographical scope and overestimated significantly car production in the Union and, consequently, the demand for AHEX AFRPs in the Union. On the basis of the latest projected car production figures and using the appropriate geographical scope as mentioned in recital (98), the Commission considered that EA’s estimates ranging from 232 to 263 thousand tonnes were reasonable. On this basis and on the basis of the estimated Union industry capacity and imports from third countries, the Commission concluded there would be sufficient capacity to absorb the increase in demand whether imports from the PRC remain on the market or not on this basis, this claim was rejected.

(115) Imports from China of AHEX AFRPs were based on Valeo’s submission. Imports from Turkey were assessed based on EA’s verification exhibit No 11 providing shipments in the same format as document t21.004336. In order to be conservative, only 85 % of the average shipment volume to the EU destined for transport for years 2017-2019 was considered to account for AHEX AFRPs not destined for light vehicles.

(116) Following definitive disclosure, Valeo raised doubts concerning the import volumes from Turkey but did not specify on which grounds nor submitted any evidence supporting its claims. As mentioned in recital (89), such import volume was conservatively assessed based on shipments from Turkey to the EU as reported to EA. On this basis, that claim was rejected.

(117) Union capacity was based on EA’s submission relating to shipments of AFRP for HEX production in the transport sector. This is a rather conservative approach as the actual production and capacity could be much higher than the shipments. In the same vein, only 85 % of the average shipment volume in the EU destined for transport for years 2017-2019 was considered to account for AHEX AFRPs not destined for light vehicles. Valeo’s capacity figure was taken from the same submission.

(118) Following definitive disclosure, EA claimed that the Commission should not have relied on the shipment data which correspond to its sales but rather on the capacity as submitted to the Commission that amounted to [400 – 450] thousand tonnes in the IP (34).

(119) In response to those comments, Valeo and TitanX claimed that the reported capacity did not appear on the non-confidential file, that the late filing of such information did not allow them to comment on its content and that it did not include a meaningful explanation concerning the methodology used except that the information was collected from EA’s members. Furthermore, they questioned the relationship between the submission referred to by EA and certain previous submissions (35). In addition, they claimed that the reported capacity should have taken the validation of the producers with major HEX programs into account. On this basis, it claimed that the absence of detailed explanations in the open file violated their rights of defence. Furthermore, Valeo and TitanX claimed that the reported capacity was unrealistic in view of the low capacity utilisation reported for the IP and of the subsequent temporary capacity issues faced during the first half of 2021 leading to allegedly opportunistic and abusive pricing behaviour by the Union industry. On this basis, Valeo and TitanX supported the Commission’s approach as far as capacity is concerned.

(120) In this regard, the Commission considered that the capacity reported by EA did not take account of the capacity normally allocated to other HEX AFRPs manufactured by the Union industry or to other products manufactured on the same equipment. As the Commission did not rely on document t21.004414 for its findings, the Commission did not consider that Valeo’s or TitanX’s rights of defence were violated, although it admitted that the non-confidential version of the document did not contain a meaningful summary of its sensitive content. On this basis and in order to report production capacity on a conservative basis, the Commission confirmed its approach and based its capacity estimate on the shipments in the Union. Consequently EA’s claim was rejected.

(121) Following additional disclosure, Valeo argued that, in line with the Commission methodology to assess market demand, the assessment of the Union industry’s capacity should exclude AHEX AFRPs to be ultimately used in the production of cars in non-EU countries.

(122) As explained in recital (117), Union capacity was assessed conservatively on the basis of the shipments destined for the Union market. Considering that this indicator reflects conservatively the quantity that the Union industry was able to deliver to the Union market, the Commission did not consider that such quantity should be revised downward to take account of the share of AHEX exported to non-EU countries and produced from AFRPs manufactured by the Union industry. In any case, Valeo did not provide the HEX quantity manufactured in the Union which was exported to non EU countries. On this basis, this claim was rejected.

(123) Additional capacity projected to be added by the Union industry was established both on the basis of Valeo’s submission mentioned in recital (88), on Company B’s submission on this specific matter backed with concrete evidence on investment projects (36) and on the verified information of the sampled Union producer concerned.

(124) Following definitive disclosure, Valeo raised doubts concerning the investments in additional capacity of the Union industry for the years 2022 and 2023 claiming that it would not be fully operational before 2024 due to trial runs, equipment optimisation and debottlenecking. Valeo also raised doubts concerning the allocation of the investment to AHEX AFRPs.

(125) However, such claims were not substantiated. In any case, the Union industry indicated that its capacity would follow the evolution of the market demand and that the additional capacity would be allocated to AHEX AFRPs if fair market conditions prevailed.

(126) On the basis of the above conservative forecast, the Commission considered that the Union industry had sufficient capacity to meet the current demand and that there was sufficient spare capacity. As far as the future demand is concerned, the Commission concluded that, considering the additional capacity, there would be sufficient supply to absorb the increase in demand whether imports from the PRC remain on the market or not. In any event, it could be expected that some imports from PRC would continue at non-injurious prices.

(127) . The Commission also observed that the demand for the year 2026, based on the EU27 IHS Markit data of 5 July 2021 and Valeo’s internal estimate for the AHEX AFRP weight per engine type, would still be lower than the material available on the Union market whether supplied by the Union industry or sourced from third countries.

(128) When considering Valeo’s consumption forecast, while at the same correcting the additional capacity projections as explained in recital (118) above, the Commission concluded that there would be a material shortage if imports from the PRC were to stop completely. However, such shortage would be much lower (5,5 %) than the shortage foreseen by Valeo for the period 2022-2027 (17 %) or for the year 2026 (21,7 %). In any case, should imports from the PRC continue in the same quantities, such shortage would disappear. On the above basis, the claims relating to capacity, investments and material shortage in view of the increased demand were rejected.

(129) The users and their association, supported by ACEA, claimed that the Commission did not assess properly the impact of the measures in view of the lack of available capacity. They claimed that even if capacity was available, validation would be a short term barrier and that they could not quickly substitute imports from the PRC with European supply. On this basis, they also claimed that they were exposed to significant commercial risk and the loss of business opportunities. In this regard, CLEPA also added that certain global customer projects, where the same part is produced, require the same material input to ensure consistency of the programme performance. However, this claim was not substantiated with supporting evidence relating to AHEX AFRPs. In the same regard, ACEA claimed that the level of provisional measures would increase significantly the manufacturing costs.

(130) Valeo indicated that a quick substitution was not possible as, according to their 2021 AHEX AFRPs supply forecast, validated Chinese alloys are not available on the Union market and no alternative sources exist. Also, Valeo and several other parties claimed that dual sourcing (meaning the same product is secured simultaneously by more than one supplier) was not often accepted by the clients.

(131) The Commission observed that for several specific alloys with important share of purchases by Valeo, the latter had sourced them in the past years from a Union producer and had subsequently replaced them with products with the same technical specifications from the PRC. In addition, the Commission had evidence on the file that the Union producer in question has the necessary capacity to supply this specific product and would not require a completely new validation from the user. Furthermore, Valeo’s allegation were based on a 2021 supply forecast while the information provided for the investigation period (2019 and 2020) did not support its claim. Consequently, the Commission rejected the claim that the alloys in question could not be sourced from the Union market any longer.

(132) The evidence on file showed that certain customers require dual sourcing and that certain users find alternative solutions for their purchases of AHEX AFRPs when confronted with delivery issues. This is also supported by Valeo’s supply forecast database for the years 2019 and 2020 which points to the fact that a significant share of the material supplied from China had a second validated source in the EU in those years. Dual sourcing is further evidence that the same alloys and materials are validated for Chinese and Union suppliers at the same time.

(133) EA also confirmed that the shift from sourcing from China to sourcing from the Union was already taking place in 2021, including by some large customers. Moreover, it indicated that most of the material from China imported currently was initially supplied by the Union industry before they were replaced by low cost suppliers. This is further evidence that substitution of imports from the PRC by supply from the Union industry can happen quickly. Furthermore, EA indicated that shifting suppliers is not lengthy and costly but is the result of a normalisation process of pricing after anti-dumping measures are imposed.

(134) Furthermore, as far as equivalent alloys are concerned, Valeo claimed that the reason for the discrepancy between 2019/2020 and 2021 was linked to the sourcing and development of battery cooling plates and claimed that such information is pivotal for the assessment of the impact of validation. As far as dual sourcing is concerned, Valeo claimed that, despite the Commission’s adjustment, less than [SENSITIVE] % of the AHEX AFRPs sourced from the PRC had a second source validated in the EU.

(135) With regard to substitution and validation, it should first be recalled that AHEX AFRP users purchased the majority of their AFRPs in the EU over the period considered and also after that period, according to the post-IP data available to the Commission.

(136) With regard to equivalent alloys, it should be noted that, while post-IP data should not be ignored, the findings of this investigation should be based primarily on data pertaining to the investigation period. The information at hand relating to one user showed that a vast majority of the alloys purchased had an equivalent in the EU for the years 2019 and 2020. As for the year 2021, the percentage of alloys purchased in the PRC that had an equivalent in the EU dropped, as a consequence of the development of battery cooling plates AFRPs sourced from the PRC, but still represented more than half of the volume purchased from the PRC. Considering the historical record pertaining to the IP and the most recent data, the Commission rejected Valeo’s claim that ‘validated Chinese alloys are not available on the Union market’.

(137) As for dual sourcing, the Commission considered that the evidence on file referred to in recital (132) and the significant share of AHEX AFRPs which had a dual sourcing were sufficient evidence rebutting the claim that ‘dual sourcing was not often accepted by the clients’.

(138) Following definitive disclosure, TitanX reiterated that its ability to source AHEX AFRPs from other producers was seriously impaired by validation barriers which could not be surmounted in the short term. In the absence of new evidentiary elements in this regard or comments on the Commission’s findings, this claim was rejected.

(139) The users and their association, supported by ACEA, also claimed that the situation on the US market differs from the situation in the EU as there is no available capacity in the EU or other countries, and that the US administrative review process offers more flexibility that is not replicated in the basic Regulation.

(140) First, as mentioned in recitals (126) and (127), the Commission concluded that the Union industry had sufficient capacity to absorb the current and future demand provided that market conditions prevail.

(141) Second, even though the US and EU TDI laws differ, the basic Regulation foresees the existence of interim reviews pursuant to Article 11(3) which allow for a revision of the measures in force in certain circumstances. Article 11(8) of the basic Regulation also foresees that anti-dumping duties can be refunded provided that certain conditions are met.

(142) On the basis of the above, the claims relating to validation, substitution, dual sourcing and differences with the US market were rejected.

(143) The users and their association also claimed that the duties would have a material impact on their financial situation and that they could not absorb a cost increase linked to significant anti-dumping duties or validation costs in view of their financial situation. The user MAHLE GmbH (‘Mahle’) added that the Commission had wrongly assumed that it was profitable in the pre-COVID situation.

(144) EA indicated that the level of the anti-dumping measures were reasonable and could level the playing field to restore normal conditions of competition.

(145) The Commission observed that the level of the definitive measures is lower than the provisional ones. Furthermore, the investigation revealed that users were mainly sourcing their AHEX AFRPs in the EU. On this basis, it considered that the measures would only have a limited impact on the financial situation of the users. As far as Mahle is concerned, in the absence of questionnaire reply, the Commission was not in a position to assess the impact of the measures on its financial situation. Also, the information shared by Valeo concerning the impact of the measures entailed certain shortcomings and their impact was overestimated. The investigation also revealed that a significant share of the user’s sales volumes made from AHEX AFRPs sourced from the PRC was exported to non-EU countries. Consequently, it is reasonable to expect that those imports could qualify under the inward processing regime and thereby avoid the payment of anti-dumping duties and reduce the impact of the associated additional costs. Also, as evidenced in recitals (130) to (133), users could avoid validation costs by resourcing materials currently purchased in the PRC from validated suppliers in the EU or by shifting additional volumes from Chinese to European sources for AHEX AFRPs that have dual sourcing. On this basis, these claims were rejected.

(146) Following definitive disclosure, TitanX claimed that the assessment of the impact of the measures was flawed as, even with lower duties, anti-dumping measures would have serious financial consequences for its operations. In this regard, it provided calculations showing the impact of measures on its profitability.

(147) After analysis of these calculations, it appeared that TitanX had not limited its impact assessment to the imposition of measures. Indeed, it had also factored in a price increase on the Union market in its calculations for the investigation period and the period following the investigation period. However, such price increases either did not take place in the IP or should not have been considered for the whole period following the investigation period. On this basis, the Commission considered that TitanX had overestimated the impact of the measures. In any case, the impact of the measures and of the price increase was not considered significant.

(148) As far as the impact of measures is concerned, it should be considered that the existence of anti-dumping measures aims at restoring a level playing field allowing fair trade. Also, as mentioned in recital (447) of the provisional Regulation, the Commission concluded that the imposition of measures would not be against the interest of users active in the automotive HEX sector. Furthermore, it should be noted that the level of the anti-dumping measures has been revised downward in the definitive disclosure.

(149) Following definitive disclosure, Valeo claimed that the Commission did not disclose the facts on which it based its reasoning to claim that Valeo’s calculations contained certain shortcomings and were overestimating the impact of the measures. In this regard, it provided a revised profitability analysis and claimed that the impact on profitability had to be assessed for each Valeo site manufacturing AHEX and that it was irrelevant to look at the Valeo group profitability.

(150) The Commission confirmed that Valeo’s calculations were overestimating the impact of measures. For example they did not factor in the fact that, as explained in recital (145), Valeo could resort to import AFRPs under the inward processing procedure to reduce the impact of anti-dumping measures. Therefore, the Commission confirmed its assessment as mentioned in recital (145), i.e. that the measures would only have a limited impact on the financial situation of the users.

(151) CLEPA and Mahle claimed, contrary to the Commission’s analysis on available capacity in the provisional Regulation, that the level of prices had increased by an alleged 30 %. Mahle also claimed that there is a high demand for foil stock and a lack of production capacity. In view of the alleged lack of available production capacity and the imposition of anti-dumping duties, Mahle expressed its concerns concerning a structural price increase. Several parties also claimed that the duties would have a detrimental impact on the supply chain. CLEPA claimed that the uptake of electric vehicles and economic recovery would accentuate the capacity deficiencies and jeopardise the recovery and development of a strong EU car manufacturing industry after revenues and margins dropped in the past years. It also argued that AHEX manufacturers would run the risk of being unable to meet their contractual obligations with their clients or see their margins annihilated by the increased costs. Valeo added that the electrification efforts by the EU automotive industry cannot take place without complementing its purchases from the Union industry with imports from the PRC. For Mahle the imposition of anti-dumping duties would create a competitive disadvantage for the EU automotive suppliers. The company repeated that it cannot transfer the expected price increase to its customers. BMW indicated that the imposition of measures would lead to a disruption of their supply chain in view of the lengthy and costly material validation procedures to take place in order to shift to alternative suppliers. Eventually, ACEA claimed that the automobile industry was already subject to various other measures leading to additional financial burdens for the OEMs such as the steel safeguard measures, which harm their competitiveness on the domestic and on export markets.

(152) EA indicated that the recent price increase was due to several factors such as the increase in raw material prices for alloys and slabs, a shortage in containers in international shipping, an increase in freight costs and the sudden and strong post-COVID increase in demand in all industrial sectors. Furthermore, EA considered that while prices have likely been influenced by the imposition of provisional measures, the price increase cannot be linked necessarily to a lack of capacity and should not be seen as a structural issue, rather a temporary situation that is expected to lapse when the demand and supply situation normalises after the initial period of tension on the market. In this context, EA had also indicated that the level of the anti-dumping measures were intended to level the playing field and restore normal conditions of competition. In addition, EA claimed that capacity would not be an issue when it comes to supporting the development of the car electrification as far as AHEX AFRPs are concerned since certain additional capacity had already been installed or was progressively being installed so that the Union industry could meet the increasing demand.

(153) The Commission concluded that the definitive measures would only have a limited impact on the financial situation of the users. Also, as mentioned in recitals (131) to (133), substitution of imports from China by supply from the Union industry can happen relatively quickly since certain validated Union producers were supplying the AHEX AFRPs in the past and since dual sourcing exists in the EU. Furthermore, as analysed in recitals (87) to (127), it is likely that the current and future capacity of the Union industry would be sufficient to meet a growing demand. On this basis, the Commission considered that there was no compelling reason to exclude AHEX AFRPs on Union interest grounds.

(154) EA claimed that certain users were using low priced AFRPs from China to compete against other producers using European material leading to a price erosion on the Union market. In this context, EA failed to understand how a user can claim that there is a lack of capacity, when according to EA’s recent survey, only very few Union producers received a request to quote for additional volumes in 2021 besides the volumes secured in the existing contracts. It also added that the alleged future capacity deficit in view of the increasing demand disregards additional executed or announced capacity expansions by 2 other Union producers.

(155) In this regard, Valeo claimed that EA’s claim that AHEX AFRPs users, including Valeo, were contributing to price erosion by Chinese suppliers was incorrect. In support of its claim, Valeo provided an extract of the historical evolution of prices and volume of AHEX AFRPs supplied by Union producers to Valeo for the period 2017-2022. Furthermore Valeo reiterated that it needed long-term agreements to ensure a smooth supply with the automotive OEMs and that Union producers were deliberately not willing to supply or that they did not have the required capacity. Valeo also pointed to recent delays in supply with one Union producer.

(156) EA also claimed that any capacity shortage would be linked to dumping practices which prevented Union producers to allocate capacity to the production of AHEX AFRPs. As far as recent delays in supply are concerned, reference is made to recital (56) where EA provided explanations for such delays.

(157) With regard to price erosion, the evidence provided by Valeo in support of its rebuttal was found to be fragmentary and thus inconclusive. Indeed, Valeo’s analysis is based on a limited number of Union suppliers, the conclusions are based on a period going beyond the period considered ending in June 2020 and thus potentially impacted by this investigation (initiation, imposition of provisional measures). Furthermore, it does not take the evolution of demand into account. On the contrary, Valeo’s questionnaire reply shows that the relative share of purchases from the PRC increased between 2019 and the investigation period. Furthermore, as mentioned in Section 7.1, significant underselling margins were established confirming the existence of price erosion. On this basis, Valeo’s claim was rejected.

(158) With regard to greenhouse emission targets, CLEPA claimed that measures would limit investments in innovation pursuing the digital and green goals set by the European Union and the development of a European automotive battery supply chain in particular.

(159) As mentioned in recital (145), measures are expected to have only a limited impact on users given the share of AHEX AFRPs sourced from the PRC and the level of the measures. On this ground, they should have a limited impact on the described investments.

(160) In the same context, EA pointed that buying EU AFRP’s would help the car and automotive industries in terms of lowering their carbon footprint and referred to recitals (78), (451) and (452) of the provisional Regulation where it was provisionally concluded that the Union industry was contributing to meeting the EU’s emissions targets through its increasing use of recycled material and by generating on average almost three times less CO2 than in the PRC when producing AFRPs.

(161) EA also questioned the rationale of certain AHEX AFRP users sourcing from the PRC on the grounds that it was contrary to the ambition of the EU to achieve the European Green Deal in view of the lower carbon footprint of primary aluminium production in the EU. It also referred to past experience in the solar panel sector, which suffered from dumped imports after it privileged a short-term ‘Chinese supply strategy’ rather than maintaining a healthy value chain in the EU.

(162) In this regard, Valeo claimed that it was purchasing only limited quantities of material originating in the PRC and that it was not purchasing cheap and polluting AHEX AFRPs from the PRC. Valeo further argued that, with its strategy, it was supporting the revolutionary electrification of mobility and assisting the EU’s environmental objectives as well.

(163) However, Valeo did not provide any evidence concerning the carbon footprint of its suppliers or other piece of evidence contradicting the Commission’s assessment in this regard. Furthermore, while Valeo may be purchasing limited quantities of AHEX AFRPs from the country concerned, the share of its purchases from the PRC has been increasing in the past years.

(164) Following definitive disclosure, TitanX claimed that the Commission’s new emission targets and the role to be played by the EU automotive industry justified the exclusion of AHEX AFRPs on Union interest grounds.

(165) In this regard, reference is made to recital (160) and (161) which confirm that buying AFRPs in the EU would help the car and automotive industries in terms of lowering their carbon foot print.

(166) In view of this detailed analysis, the Commission confirmed its provisional findings as set out in section 2.3.1 of the provisional Regulation and did not exclude AHEX AFRPs from the scope of this investigation.

2.2.2. Aluminium coils for the production of coated coils and ACP

(167) As laid down in section 2.3.2 of the provisional Regulation, the Commission had excluded aluminium coils for the production of coated coils and ACP from the product scope. EA claimed that the definition of the provisionally exempted product was not specific enough. In its view, the user Company A had not provided detailed technical information allowing other parties to provide meaningful comments, thus limiting their rights of defence.

(168) Company A responded that the provided definition was specific enough and provided evidence that certain Union producers were not able to produce products with those specifications. On this basis, it concluded that the technical characteristics result in a very specific product. The Commission considered that the submissions of both EA and Company A were meaningful, allowed for a reasonable understanding of the sensitive information and that the rights of defence of both parties were respected.

(169) EA claimed further that Company A had not filed its request timely. The Commission observed that Company A had made the request at a very early stage of the proceedings. It was also duly substantiated and filed sufficiently in time for the Commission to gather all relevant information in order to draw meaningful conclusions.

(170) EA also contested the provisional finding that the Union industry would not have the capacity to produce the required volumes of the exempted product with the requested quality and technical standards. It provided statements by five Union producers claiming that they have the relevant equipment to manufacture the provisionally exempted product with mostly one restriction on width, and added that other producers can produce the provisionally exempted product in the EU. In addition, EA provided statements by four producers of ACP that they can source the exempted material in sufficient quantities and therefore do not face the same issues as Company A.

(171) Company A accepted that certain producers in the EU are able to manufacture the exempted product. However, it stressed that it cannot source it in sufficient quantities in the EU. There was a need to source certain volumes of the exempted product from the PRC due to the lack of supply and consequent longer lead times in the EU and in other countries. It substantiated its claims with additional supporting evidence and referred to the evidence already provided demonstrating the inability of certain producers to manufacture the exempted product due to technical restrictions or the inability to source the exempted product in sufficient quantities.

(172) Furthermore, Company A also argued that some of the statements made by the Union producers were inaccurate as they cannot supply the provisionally exempted product or that they are specialised in other products. In its view, these statements confirm that European producers have no plans to invest in additional capacity.

(173) EA contradicted Company A, stating that there is enough capacity in the Union market. It also claimed that the delayed deliveries are related to orders that go beyond concluded agreements. As far as delays are concerned, the Commission noted that the evidence on file confirmed that certain Union producer(s) which could not meet the technical requirements of Company A had to reimburse it for non-compliant shipments and thus cannot supply Company A. Hence, Company A had no choice but to ask for additional quantities from other suppliers.

(174) Company A replied tha