Commission Implementing Regulation (EU) 2017/724 of 24 April 2017 imposing a definitive anti-dumping duty on imports of certain continuous filament glass fibre products originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council
Date: 2017-04-24
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: China, anti-dumping duty, glass fibre, import (EU), originating product




L_2017107EN.01000401.xml










25.4.2017   


EN


Official Journal of the European Union


L 107/4








            COMMISSION IMPLEMENTING REGULATION (EU) 2017/724
of 24 April 2017
         
imposing a definitive anti-dumping duty on imports of certain continuous filament glass fibre products originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council


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 11(2) thereof,

Whereas:
1.   PROCEDURE

1.1.   Measures in force







(1)


By Council Implementing Regulation (EU) No 248/2011 (2), the Council imposed a definitive anti-dumping duty on imports of certain continuous filament glass fibre products originating in the People's Republic of China (‘the PRC’). The duty, based on the injury elimination level, ranged between 7,3 % to 13,8 %.










(2)


By Commission Implementing Regulation (EU) No 1379/2014 (3), following an anti-subsidy investigation and a partial interim review of the anti-dumping measures, the Commission amended the original anti-dumping duty to values ranging between 0 % to 19,9 % and imposed an additional countervailing duty ranging between 4,9 % to 10,3 %.










(3)


The resulting combined countervailing and anti-dumping measures in form of ad valorem duties therefore ranged between 4,9 % to 30,2 %.




1.2.   Request for an expiry review







(4)


Following the publication of a notice of impeding expiry of the anti-dumping measures in force, the Commission received a request for the initiation of an expiry review of these measures pursuant to Article 11(2) of the basic Regulation.










(5)


The request was lodged on 14 December 2015 by the European Glass Fibre Producers Association (‘APFE’) on behalf of producers representing more than 25 % of the total Union production of certain continuous filament glass fibre products.










(6)


The request is based on the grounds that the expiry of the anti-dumping measures would be likely to result in continuation of dumping and recurrence of injury to the Union industry.




1.3.   Initiation of an expiry review







(7)


Having determined that sufficient evidence existed for the initiation of the review, the Commission initiated an expiry review (4) pursuant to Article 11(2) of the basic Regulation on 15 March 2016.




1.4.   Interested parties







(8)


In the Notice of Initiation of an expiry review, the Commission invited interested parties to participate in the investigation. In addition, the Commission specifically informed APFE, other known Union producers, the known exporting producers and the authorities of the PRC, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.










(9)


In the Notice of Initiation of an expiry review, the Commission stated that it envisaged using Turkey as a third market economy country (‘analogue country’) within the meaning of Article 2(7)(a) of the basic Regulation. The Commission also stated that according to the information available to it, other market economy producers may be located, inter alia, in Egypt, Malaysia and Taiwan.










(10)


The Commission sent notices to the authorities in Egypt, Japan, Malaysia, Taiwan, Turkey and the USA notifying them of the initiation of the investigation and requesting information on production and sale of certain continuous filament glass fibre products in those countries. Letters were then sent to all known producers asking for their cooperation with the review and enclosing a questionnaire.










(11)


Interested parties had an opportunity to comment on the initiation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.




1.5.   Sampling







(12)


In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.




Sampling of exporting producers in the PRC






(13)


To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers and an association in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the authorities of the PRC to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.










(14)


Five exporting producers in the PRC provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission originally proposed a sample of three exporting producers, based on the largest volume of exports which could reasonably be investigated within the time available.










(15)


In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the PRC were consulted on the selection of the sample. No comments were made.










(16)


Shortly after receiving the questionnaire, the largest of the three sampled companies withdrew its cooperation. The Commission replaced it by the next largest exporting producer based on the volume of exports.




Sampling of Union producers






(17)


In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. In accordance with Article 17(1) of the basic Regulation, the Commission selected the sample on the basis of the largest sales volumes on the Union market of the like product.










(18)


This sample consisted of three company groups with manufacturing plants located in Belgium, France, Italy and Slovakia, representing around 74 % of the total sales on the Union market. The Commission invited interested parties to comment on the provisional sample. No comments were received. Therefore, the Commission concluded that the sample is representative of the Union industry.




Sampling of importers






(19)


To decide whether sampling was necessary and, if so, to select a sample, the Commission asked importers to provide the information specified in the Notice of Initiation.










(20)


Eight importers provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three on the basis of the largest volume of imports into the Union. In accordance with Article 17(2) of the basic Regulation, all known importers concerned were consulted on the selection of the sample. No comments were made.




1.6.   Replies to the questionnaire







(21)


The Commission sent questionnaires to the three sampled Union producers, the three sampled importers, the sampled exporting producers and known exporting producers in Egypt, Japan, Malaysia, Taiwan, Turkey and the USA.










(22)


Questionnaire replies were received from three Union producers, two importers and three producers in Japan, Malaysia and Turkey. None of the sampled Chinese exporting producers submitted a questionnaire reply.










(23)


The Commission also sent questionnaires to 64 known users and received 19 replies.




1.7.   Verification visits







(24)


The Commission sought and verified all the information deemed necessary for the purpose of this investigation. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:






(a)


Union producers






—


3B Fibreglass SPRL, Belgium;










—


European Owens Corning Fibreglass SPRL, Belgium;










—


Johns Manville Slovakia a.s., Slovakia.














(b)


Exporting producer in the analogue country






—


Nippon Electric Glass Co., Ltd, Japan.












1.8.   Review investigation period and period considered







(25)


The investigation of likelihood of continuation of dumping covered the period from 1 January 2015 to 31 December 2015 (‘the review investigation period'’ or ‘RIP’).










(26)


The examination of trends relevant for the assessment of the likelihood of a recurrence of injury covered the period from 1 January 2012 to the end of the review investigation period (‘the period considered’).




2.   PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product concerned







(27)


The product concerned is chopped glass fibre strands, of a length of not more than 50 mm; glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887); and mats made of glass fibre filaments excluding mats of glass wool, currently falling within CN codes 7019 11 00, ex 7019 12 00 (TARIC codes 7019120021, 7019120022, 7019120023, 7019120025, 7019120039) and 7019 31 00, originating in the PRC.










(28)


The product concerned is the raw material most often used to reinforce thermoplastic and thermoset resins in the composites industry. The resulting composite materials (filament glass fibre reinforced materials) find its use in a large number of industries: transportation (automotive, marine, aerospace, military), electric/electronics, wind energy, building and construction, tanks/pipes, consumer goods, etc.




2.2.   Like product







(29)


The investigation showed that the following products have the same basic physical chemical and technical characteristics as well as the same basic uses:






(a)


the product concerned;










(b)


the product produced and sold on the domestic market of Japan, which served as an analogue country; and










(c)


the product produced and sold in the Union by the Union industry.














(30)


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




3.   DUMPING

3.1.   Likelihood of recurrence or continuation of dumping







(31)


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




3.1.1.   Normal value and analogue country







(32)


According to Article 2(7)(a) of the basic Regulation, normal value was determined on the basis of the price or constructed value in a market economy third country. For this purpose the Commission had to select the analogue country.










(33)


The Commission asked known exporting producers of the like product in Egypt, Japan, Malaysia, Taiwan, Turkey and the USA to provide information by replying to the analogue country questionnaire and it received replies from three producers in Japan, Malaysia and Turkey (5).










(34)


Following publication of the Notice of Initiation, APFE provided comments in support of Turkey being the analogue country.










(35)


In the original investigation in 2011, the Commission used Turkey as an analogue country for the purpose of establishing normal value in respect of the PRC. In the original investigation the Commission received only one reply from Turkey.










(36)


For the purpose of selecting the analogue country, the Commission took due account of all reliable information made available to it at the time of selection, considering elements such as, but not limited to, domestic sales, size of the market and competitive environment on the domestic market.










(37)


Domestic sales of the Japanese producer matched almost fully the product types exported by the PRC at the level of CN codes. In case of Turkey this matching was less than 50 %. Concerning matching for domestic sales of the exporting producer in Malaysia its level was so low that the Commission had to exclude Malaysia as an analogue country.










(38)


The Commission estimated the Japanese market of the like product to be approximately three times larger than the Turkish market. The Commission found the Japanese market more competitive with six known local producers, compared with only one known producer in Turkey. There were no customs duties for the like product in Japan compared with customs duties of 7 % as well as anti-dumping and countervailing duties, together in the range of 24,5 % to 35,75 % against the PRC in Turkey.










(39)


Based on the above consideration the Commission concluded that Japan is the most appropriate analogue country under Article 2(7)(a) of the basic Regulation.










(40)


The Commission did not receive further comments concerning the analogue country following the selection of Japan.










(41)


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










(42)


The normal value was established on the basis of domestic prices in the ordinary course of trade of the cooperating Japanese producer.




3.1.2.   Export price







(43)


The Commission did not receive a reply to the questionnaire from any of the sampled exporting producers in the PRC. As a consequence of non-cooperation, pursuant to Article 18(1) of the basic Regulation, the Commission informed the exporting producers in the PRC and the authorities of the PRC that if sufficient cooperation on the part of exporting producers was not forthcoming, the Commission may base its findings on the facts available. The Commission also stressed that a finding based on facts available may be less advantageous to the parties concerned. No reaction was received. The Commission thus established the export price on Eurostat imports statistics (COMEXT) at the level of the relevant CN codes.




3.1.3.   Comparison







(44)


Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments in the range of 0 – 7 % were made for transport, insurance, handling, loading and ancillary costs, credit cost and packing.




3.1.4.   Dumping margin







(45)


During the investigation the Commission established that the product control numbers requested in the Commission's questionnaire could not be linked to the TARIC codes. The Commission therefore made comparison of export price and normal value on the basis of CN codes (7019 11 00 for chopped strands, 7019 12 00 for rovings and 7019 31 00 for mats).










(46)


On this basis, the Commission found a dumping margin, expressed as a percentage of the CIF Union frontier price duty unpaid, at the level of above 70 %.




3.2.   Development of imports should measures be repealed







(47)


As a consequence of non-cooperation, pursuant to Article 18(5) of the basic Regulation, the Commission used for its determinations information supplied in the review request and information from other independent available sources, such as published price lists, official import statistics, or information obtained from interested parties during the investigation and information obtained in the course of the previous investigations.




3.2.1.   Capacity







(48)


In order to establish the possible development of imports in case measures are repealed, the Commission analysed information available concerning the capacities, production and consumption of glass fibres products on the domestic market in the PRC, as well as exports from the PRC. The source of information in this regard was mainly limited to information provided by APFE (6). This information was based on trade statistics (import/export) and business intelligence information collected by the association's members. The Commission checked it by reference to information from other independent available sources and found no additional evidence. The information provided by APFE with regard to capacity was not contested by the interested parties.










(49)


The total production of glass fibres in the PRC during the review investigation period exceeded the domestic consumption by more than 700 thousand metric tonnes, of which around 90 % were exported to other third countries, and around 10 % to the Union. The excess capacity in the PRC during the review investigation period was estimated at around 150 thousand metric tonnes, which is equivalent to more than 15 % of the total Union consumption (see recital (68) below). Based on estimates, the excess capacity in the PRC more than doubled in 2016 to around 300 thousand tonnes or 30 % of the total Union consumption.










(50)


Despite this excess capacity and the forecasted slowdown in growth of the domestic demand in 2016, Chinese glass fibre producers continued to build capacity in the PRC and in other third countries targeting the Union market.










(51)


The excess capacities in the PRC and a comparison with the Union consumption reinforce the likelihood that imports will significantly increase should the anti-dumping measures be repealed.




3.2.2.   Prices on the Union market







(52)


In order to establish possible development of imports in case measures are repealed, the Commission analysed attractiveness of the Union market with regard to prices.










(53)


The Commission analysed export data from the PRC at the CN code level (7) during the review investigation period. Rovings were the glass fibres with the highest volume of exports from the PRC. For exports of rovings, the Union market was the second most important, after the USA. Prices, although similar worldwide, were the highest in the Union and were at the level of 1 USD per kilogram. For comparison they were at the level of 0,99 USD to the USA and as low as 0,85 USD per kilogram to Malaysia and India (8). Prices to the Union were the highest among the 10 most important export markets (9).










(54)


For chopped strands the Union market was the fifth most important for exports from the PRC. Prices in the Union were significantly higher compared with main export markets, in order of importance, the USA, Korea, Japan and India.










(55)


For mats of glass fibres the Union market was the most important and prices to the Union were the most attractive among the main export markets from the PRC. The second most important market for mats of glass fibres was the USA, with an average price level slightly higher. To the other markets, Vietnam, Indonesia, United Arab Emirates, in order of importance, this price was lower or significantly lower than to the Union.










(56)


The Commission based the above analysis on data at the customs code level (CN code level). Due to the lack of cooperation of the Chinese exporting producers the Commission did not possess data at the product control number level. Data on prices at the product control number level would have been more precise and would not have been exposed to possible inaccuracies resulting from large variations of prices within the same category of product (e.g. chopped strands of various diameters).










(57)


In spite of this limitation, the facts available show that prices to the majority of other markets were lower than prices to the Union market during the review investigation period. Given the attractive prices on the Union market, it is likely that significant quantities currently sold to other markets would be redirected to the Union market, should the anti-dumping measures be repealed. As indicated in recital (49) above, more than 600 thousand tonnes were exported to other markets, and could therefore at least partially be redirected to the Union market.










(58)


The attractiveness of the Union market is also confirmed by Chinese exporters' investments in third countries, in particular in Egypt. The estimated capacity of furnaces installed in Egypt was 80 thousand metric tonnes in the review investigation period. It is estimated to reach 160 thousand metric tonnes by the end of 2017 and 200 thousand metric tonnes by 2019 (10).










(59)


The level of prices on the Union market and its importance for exports from the PRC allow the Commission to conclude that the Union market is attractive for glass fibre producers in the PRC. There is high likelihood that imports will significantly increase should the anti-dumping measures be repealed.




3.2.3.   Other considerations







(60)


The Commission's proceedings in the anti-subsidy investigation in 2014 confirmed a number of incentives made available to the glass fibre industry in the PRC, which indicates that the PRC is willing to support the glass fibre industry's expansion and its worldwide presence. An increase of exports to the Union market should therefore be expected, should the anti-dumping measures be repealed.










(61)


In September 2016 India extended its anti-dumping duties on imports of glass fibre from the PRC. Turkey extended the anti-dumping duties on these imports in November 2016. The existence of anti-dumping duties in other markets reduces their attractiveness for Chinese exporters.










(62)


With regard to the Chinese pricing behaviour, the Commission considers the existence of anti-dumping measures in other third countries to be an additional indication of dumping practices by the Chinese exporting producers.




3.2.4.   Conclusion on the likelihood of continuation of dumping







(63)


Based on the above, the Commission expects that Chinese dumped exports would resume in larger volumes and exercise increased price pressure on the Union market should the current measures be repealed.




4.   INJURY

4.1.   Definition of the Union industry and Union production







(64)


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










(65)


The Commission established the total Union production during the review investigation period at around 652 thousand tonnes based on information concerning the Union industry provided by APFE.










(66)


As indicated in recital (18), the Commission sampled manufacturing plants of three Union producers, representing 74 % of the total sales of the like product on the Union market and 68 % of the total production in the Union.




4.2.   Union consumption







(67)


The Commission established the Union consumption on the basis of (i) the volume of sales of the Union industry on the Union market based on data provided by APFE and (ii) imports from third countries based on data extracted from Eurostat (COMEXT).










(68)


Union consumption developed as follows:

Table 1


Union consumption (metric tonnes)










 


2012


2013


2014


2015 (RIP)




Total Union consumption


750 645 


813 760 


897 396 


960 818 





Index (2012 = 100)




100




108




120




128






Source: Data provided by APFE; Eurostat (COMEXT).














(69)


The Union consumption developed strongly during the period considered. This growth marks a return to the level of activity preceding the financial crisis. The growth was fuelled by the robust development of the thermoplastic industry and substantially increasing demand for lightweight durable materials.




4.3.   Imports from the country concerned

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







(70)


Imports into the Union from the PRC developed as follows:

Table 2


Import volume (metric tonnes), market share










 


2012


2013


2014


2015 (RIP)




Volume of imports from the PRC


101 953 


121 634 


148 796 


77 669 





Index (2012 = 100)




100




119




146




76





Market share (%)


14


15


17


8





Index (2012 = 100)




100




107




121




57






Source: Eurostat (COMEXT).














(71)


The import volume growth between 2012 and 2014 demonstrate the limited impact of the original anti-dumping duty imposed in 2011. The increase of the level of measures in 2014 reversed this trend, together with the appreciation of the USD. The exporting producers in the PRC quote their prices in USD and its appreciation made the imports less attractive for the Union importers.




4.3.2.   Prices of imports from the country concerned and price undercutting







(72)


The Commission established the prices of imports on the basis of the Eurostat statistics.










(73)


The average price of imports into the Union from the country concerned developed as follows:

Table 3


Import prices from the PRC (EUR/tonne)










 


2012


2013


2014


2015 (RIP)




Import prices (EUR/tonne)


912


821


874


1 146 





Index (2012 = 100)




100




90




96




126






Source: Eurostat (COMEXT).














(74)


The average price of the product concerned declined by 4 % between 2012 and 2014, but then marked a 31 % increase in the review investigation period.










(75)


The Commission determined the price undercutting during the review investigation period by comparing:










(76)


the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level; and










(77)


Eurostat based import statistics per CN code established on a cost, insurance, freight (‘CIF’) basis, with appropriate adjustments for customs duties and post-importation costs.










(78)


The result of the comparison was expressed as a percentage of the Union industry's hypothetical turnover during the review investigation period.










(79)


Despite the increase of the average price of Chinese imports in 2015, the level of undercutting thus established was 15 %.




4.4.   Imports from other third countries

4.4.1.   Volume and market share of imports from other third countries







(80)


Import volumes into the Union from other third countries developed as follows:

Table 4


Import volume (metric tonnes), market share — other countries










 


2012


2013


2014


2015 (RIP)




Import volume Malaysia


60 571 


64 188 


53 398 


68 774 





Index (2012 = 100)




100




106




88




114





Market share Malaysia (%)


8


8


6


7





Index




100




98




74




89





Import volume Egypt


0


0


12 835 


45 516 





Index




n/a




n/a




n/a




n/a





Market share Egypt (%)


0


0


1


5





Index




n/a




n/a




n/a




n/a





Import volume Norway


33 260 


35 255 


35 496 


41 619 





Index




100




106




107




125





Market share Norway (%)


4


4


4


4





Index




100




98




89




98





Import volume Turkey


20 940 


17 619 


19 252 


19 703 





Index




100




84




92




94





Market share Turkey (%)


3


2


2


2





Index




100




78




77




74





Import volume other countries


46 148 


47 624 


59 493 


73 795 





Index




100




103




129




160





Market share other countries (%)


6


6


7


8





Index




100




95




108




125






Source: Eurostat (COMEXT).














(81)


The main other sources of supply to the Union were Malaysia, Egypt, Norway and Turkey.










(82)


The market share of the other third countries increased from 21 % to 26 % during the period considered.










(83)


The most significant was the increase of imports from Egypt. There were no imports in the first years of the period considered, but in 2015 imports from Egypt, where one large PRC based producer continues to significantly invest, reached 5 % of market share.




4.4.2.   Import prices of imports from other third countries







(84)


The prices of imports from the other third countries developed as follows:

Table 5


Import prices (EUR/tonne)










 


2012


2013


2014


2015 (RIP)




Import price Malaysia


999


946


918


941





Index (2012 = 100)




100




95




92




94





Import price Egypt


—


—


823


997





Index




n/a




n/a




n/a




n/a





Import price Norway


912


821


874


1 146 





Index




100




90




96




126





Import price Turkey


912


821


874


1 146 





Index




100




90




96




126





Import price other countries


874


827


1 206 


1 310 





Index




100




95




138




150






Source: Eurostat (COMEXT).














(85)


Based on CN code comparison, until the review investigation period, the import prices from Malaysia were above the import prices from the PRC. In the review investigation period, Malaysian prices, unlike the import prices from other countries, slightly decreased.










(86)


Since the Norwegian producer is related to one Union producer, the prices from Norway are to a significant extent transfer prices between related parties and thus the Commission considered them not reliable for a meaningful comparison.










(87)


Average statistical prices are not indicative of actual prices since there are significant price differences between different product types and the product types mix is not known. Therefore, no conclusion can be reached with regard to import prices from other third countries.




4.5.   Economic situation of the Union industry

4.5.1.   General remarks







(88)


In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered. As mentioned in recital (18), sampling was used for the determination of possible injury suffered by the Union industry.










(89)


For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators.










(90)


The Commission evaluated the macroeconomic indicators on the basis of data provided in the complaint and in the review request as well as in subsequent submissions, cross-checked, where possible with statistics. The data related to all Union producers.










(91)


The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers.










(92)


Data used for calculating the indicators were found to be representative of the economic situation of the Union industry.










(93)


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










(94)


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




4.5.2.   Macroeconomic indicators

4.5.2.1.   Production, production capacity and capacity utilisation






(95)


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

Table 6


Production, production capacity and capacity utilisation










 


2012


2013


2014


2015 (RIP)




Production in tonnes


536 878 


584 197 


616 382 


652 857 





Index




100




109




115




122





Production Capacity in tonnes


645 229 


690 737 


698 182 


725 960 





Index




100




107




108




113





Capacity Utilisation (%)


83


85


88


90





Index




100




102




106




108






Source: Questionnaire replies, APFE.














(96)


The year 2012 was characterised by a low production volume, a low level of capacity and a low capacity utilisation rate. In the following years the production gradually increased, positively reacting to the increasing demand. There were also less furnace rebuilds in the period following 2012. All this factors considered together contributed positively to the favourable development of both capacity and capacity utilisation.




4.5.2.2.   Sales volume, market share, growth






(97)


The Union industry's sales volume and market share developed over the period considered as follows:

Table 7


Sales volume and market share (metric tonnes)










 


2012


2013


2014


2015 (RIP)




Sales volume on the Union market


487 774 


527 441 


568 126 


633 743 





Index




100




108




116




130





Market share (%)


65


65


63


66





Index




100




100




97




102






Source: Questionnaire replies, APFE.














(98)


Starting at the lows of 2012, the increasing demand gradually drove the sales volumes up, reaching a 30 % increase in 2015 compared to 2012.










(99)


However, until 2014, the increase in the Union industry sales was slower than the development of the Union consumption due to the presence of Chinese imports at undercutting prices. The market share of the Union industry declined from 65 % to 63 % between 2012 and 2014, and increased to 66 % in the review investigation period, after the increase of measures in 2014.




4.5.2.3.   Employment and productivity






(100)


Employment and productivity developed over the period considered as follows:

Table 8


Employment and productivity










 


2012


2013


2014


2015 (RIP)




Number of employees


3 580 


3 456 


3 366 


3 404 





Index




100




97




94




95





Productivity (tonne/employee)


150


169


183


192





Index




100




113




122




128






Source: Questionnaire replies, APFE.














(101)


Employment decreased by 5 % between 2012 and 2015, despite a positive development during the review investigation period. The restructuring of the industry, its efforts to innovate and optimise its production processes as well as the increased capacity utilisation led to a significant improvement of productivity during the period considered.




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






(102)


This investigation established a dumping margin of more than 70 %. The impact of the magnitude of the actual margins of dumping on the Union industry was mitigated since the increase of measures in 2014. The Union industry started to fully benefit from those in 2015.










(103)


The combined measures in place helped to the decrease of the Chinese imports and enabled the Union industry to maintain its market share. However, prices of the Union industry remained low and on average below their 2012 levels.










(104)


It can therefore be concluded that the Union industry was able to benefit from the measures in force and started to recover from the injury caused by the past dumping of Chinese exporting producers.




4.5.3.   Microeconomic indicators

4.5.3.1.   Prices and factors affecting prices






(105)


The average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 9


Sales prices to unrelated customers in the Union










 


2012


2013


2014


2015 (RIP)




Average ex works unit sales price to unrelated customers in the Union (EUR/tonne)


1 107 


1 064 


1 059 


1 079 





Index




100




96




96




97






Source: Data of the sampled Union producers.














(106)


The average sales prices haven't changed significantly since 2012, though recording a slight decrease of 3 % in 2015 compared to 2012.




4.5.3.2.   Average unit production costs






(107)


The unit cost of production developed over the period considered as follows:

Table 10


The unit cost of production










 


2012


2013


2014


2015 (RIP)




Unit cost of production (EUR/tonnes)


1 188 


1 082 


1 055 


1 005 





Index




100




91




89




85






Source: Data of the sampled Union producers.














(108)


The unit cost of production decreased over the period considered. This trend can be explained by the increasing capacity utilisation, which contributes to the decreasing unit production costs in this capital intensive industry. The Union industry also benefited from low prices of raw materials and energy.




4.5.3.3.   Labour costs






(109)


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

Table 11


Average labour costs per employee










 


2012


2013


2014


2015 (RIP)




Average labour costs per employee (EUR)


52 316 


53 849 


57 443 


59 099 





Index




100




103




110




113






Source: Data of the sampled Union producers.














(110)


The slightly increasing salaries and redundancies of lower-paid workers resulting from the efficiency project of one of the sampled producers caused an increase of the average labour costs per employee figure.




4.5.3.4.   Inventories






(111)


Stock levels of the sampled Union producers developed over the period considered as follows:

Table 12


Inventories (metric tonnes)










 


2012


2013


2014


2015 (RIP)




Closing stocks


111 626 


119 813 


105 740 


92 914 





Index




100




107




95




83






Source: Data of the sampled Union producers.














(112)


The closing stock first slightly increased in 2013 and then continued to further decrease over the period considered, driven by the increasing demand.










(113)


The increase of level of measures in 2014 played a role in the decrease towards the end of the period considered.




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






(114)


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

Table 13


Profitability










 


2012


2013


2014


2015 (RIP)




Profitability of sales in the Union to unrelated customers (% of sales turnover)


– 13,7


– 3,3


0,4


8,6





Index




– 100




– 24




3




63





Cash flow (EUR '000)


– 25 623 


– 17 008 


635


47 361 





Index




– 100




– 66




2




185





Investments (EUR '000)


39 573 


34 088 


41 500 


49 664 





Index




100




86




105




126





Return on investments (%)


– 10


– 3


0


8





Index




– 100




– 27




4




82






Source: Data of the sampled Union producers.














(115)


The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. During the period considered, the profitability of the sampled Union producers started to improve gradually, and turned positive during the review investigation period.










(116)


The net cash flow is the ability of the Union producers to self-finance their activities. The Union producers faced negative cash flows in 2012 and 2013. The situation gradually improved over the period considered and the Union producers earned positive cash flows as of 2014.










(117)


The investments made by the sampled Union producers followed an increasing trend over the period considered. The increase was more significant towards 2015. The investments were to a great extent driven by furnace rebuilds.










(118)


The return on investments is the profit in percentage of the net book value of investments. The return on investment developed in line with the profitability. The restoration of the return on investment is a consequence of the improved economic situation of the Union industry at the end of the period considered.










(119)


The poor financial performance of the Union industry between 2012 and 2014 limited its ability to raise capital. The Union industry requires significant and long term investments to be able to rebuild furnaces at regular interval of time and continue its operation.




4.5.4.   Conclusion on the situation of the Union industry







(120)


The year 2012 was characterised by a low level of demand, a low level of capacity due to furnace rebuilds, a low capacity utilisation rate, high stock levels, restructuring measures and depressed prices resulting from prior dumping, altogether resulting in massive losses and a cash outflow for the sampled companies.










(121)


Subsequently, between 2012 and 2014, the strong development of demand drove the development of sales, which translated into increased production output and lower stock levels. Capacity and capacity utilisation increased. The better absorption of fixed costs, the improvement in productivity and the deflation of some important inputs enabled a substantial reduction of costs of production for the sampled companies.










(122)


Nevertheless, the initial anti-dumping measures imposed in 2011 did not fully offset the undercutting of the Chinese imports which increased by 46 % between 2012 and 2014. This situation undermined the recovery of the Union industry.










(123)


In order to maintain its market share, the Union industry had to endure a continued erosion of prices and could barely break-even in 2014.










(124)


Following the increase of measures in 2014, the market share and prices of the Union industry reversed and took an upward trend. Unit costs of production diminished further due to increased production volumes enabling the Union industry to reach a 8,6 % profit in the review investigation period. All performance indicators turned positive, including job creations.










(125)


As established by the 2014 investigation, the Union industry continued to suffer material injury through September 2013. The injurious effect of dumped and subsidised imports continued in 2014. Only after the increase of measures did the Union Industry return to profitability and jobs creation.










(126)


On the basis of the above, the Commission concluded that the Union industry, following the increase of measures in 2014 partially recovered from the injury caused by the past dumping and did not suffer material injury in the review investigation period within the meaning of Article 3(5) of the basic Regulation.




4.6.   Likelihood of a recurrence of injury







(127)


As mentioned in recital (49), the estimated unused capacities of the producers in the PRC represented a significant amount of the total Union consumption during the review investigation period. In 2016 the unused capacities doubled compared to 2015. Due to this increasing trend and a high attractiveness of the Union market as concluded in recital (59), it is likely that the import levels from the PRC would resume in significant volumes should the measures be repealed.










(128)


As established in recital (75), Chinese imports continued to significantly undercut the Union industry's prices during the review investigation period despite an adverse evolution of the EUR/USD exchange rate.










(129)


The recovery of glass fibre prices has been limited. Prices of the Union industry remain below their 2012 levels and the effect of increase of level of measures in 2014 has been subdued by the growing pressure of imports from Egypt. Having reached its pre-financial crisis levels, the growth of Union consumption is expected to gradually decelerate.










(130)


The production of glass fibres is a highly capital intensive industry. In the period considered, the sampled producers have invested EUR 165 million in their production capacities. In the same period, their operating cash flow reached only EUR 5 million. For these reasons, repealing the measures would create a level of risk and financial strain further undermining the economic rationale behind these long term investments. The Union industry would be forced to shut down their furnaces. This would jeopardise its existence. Furthermore, high proportion of fixed costs in this industry makes it very sensitive to fluctuation of production volumes. This means that a relatively small decline in production would generate high losses. The recent improvement of the Union industry relates largely to a better absorption of fixed costs due to increased capacity utilisation, which was possible mainly because of the measures in place, in particularly after 2014.










(131)


In addition, the performance of the Union industry over the period considered was also positively influenced by external factors such as energy and raw material prices, which were relatively low. From the long term perspective, it is unlikely that the prices of those inputs would stay at that low level. Increase of those inputs would have an additional negative impact on the profitability of the Union industry.










(132)


The situation of the Union industry, although it improved in 2015, remains therefore vulnerable and is characterised by a persistence of depressed prices, volatile costs of production and high capital requirements. In this context, large quantities of dumped Chinese imports at undercutting prices would likely cause deterioration of Union industry's financial performance.










(133)


On this basis, should the anti-dumping measures be repealed and countervailing duty remains at a level which already proved ineffective to restrict the arrival of large quantities of imports at undercutting prices, the Commission concluded that there is a likelihood of recurrence of injury.




5.   UNION INTEREST







(134)


In accordance with Article 21 of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to maintain the existing anti-dumping measures in this case, despite the determination of the likelihood of a recurrence of injurious dumping. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.




5.1.   Interest of the Union industry







(135)


There was a very high degree of cooperation of the Union producers in this investigation.










(136)


The Union industry has shown that their operations are viable when not subject to unfair competition by dumped and subsidised imports and the measures in force have allowed the industry to partially recover from the past injury.










(137)


At the same time, removal of the measures would very likely lead to an increased unfair competition by dumped Chinese imports, threatening the continued operation of the Union producers.










(138)


It is therefore concluded that it is in the interest of the Union industry to maintain the measures in force.




5.2.   Interest of unrelated importers







(139)


As stated in recital (20) above, eight unrelated importers replied to the sampling form. The three largest importers were sampled and two of them cooperated. They represented 5 % of Chinese imports during the review investigation period. None of the importers who registered as interested parties in this investigation expressed its position, whether in favour or against the measures under review.










(140)


Importers and traders have access to a large number of supply sources inside and outside the Union. In addition the product concerned is to a high extent standardised and its supply sources can be changed efficiently.










(141)


Based on the above, the Commission concludes that the extension of the anti-dumping duty would have a limited impact on the situation of the importers.




5.3.   Interest of users







(142)


The product under investigation is used for a large number of applications such as the transportation (automotive, marine, aerospace, military), electric/electronics, wind energy, building and construction, tanks/pipes, consumer goods. Cooperation was obtained from a large variety of users.










(143)


19 out of 64 users that registered themselves as interested parties responded to the Commission's questionnaire. They represent approximately 10 % of the total Union consumption.










(144)


14 companies were against the extension of the measures, three companies took position in favour of maintaining the measures, and two abstained. One user association expressed its opposition to the measures.










(145)


Several users have claimed that measures in force make downstream products uncompetitive compared to the same products produced in Asia. They also claimed that they were not able to absorb the corresponding cost increase or to pass it on to their customers.










(146)


Following the increase of measures in 2014, the Commission increased the level of duties imposed on the product concerned to approximately twice the level of the initial anti-dumping duty. The Commission had assessed that the impact of such increase would not exceed one percentage point of profitability for the user industries, although it recognized that some industry sectors were more exposed than others.










(147)


This was confirmed in the current investigation. The data supplied by the cooperating users indeed indicate that the cost of glass fibre, irrespective of its origin, increased between 2014 and 2015 by an amount representing 0,5 % of their turnover. Meanwhile, the turnover, profits and jobs linked to the product concerned increased. Only two companies reported a decline of turnover and employment and four companies a decline of profits.










(148)


Some users also claimed that the Union industry does not have enough production capacity to satisfy the Union demand, is not increasing capacities and is not competitive because it has older equipment and higher energy and labour costs.










(149)


The investigation showed that these claims are not justified. As described in previous recitals, the Union industry made significant investments, improved its productivity and increased its production capacities despite a prolonged period of losses which ended in 2014, following the increase of measures in 2014. Further expansion of capacities requires long-term capital commitments which themselves are dependent on maintaining a level playing field where competitive producers can expect an adequate return on investments.










(150)


Furthermore, despite the increase of measures between 2014 and 2015, the Union consumption continued to develop at the same pace as in previous years. Indeed, alternative sources of supply exist outside of the PRC, such as in Bahrain, Egypt, Japan, Malaysia and the US. During the period considered, imports from the PRC almost never exceeded half of total imports from third countries and their market share culminated at 17 % of the total Union consumption in 2014. In any event, the purpose of the anti-dumping and anti-subsidy duties is not to stop Chinese imports into the Union, but to ensure that such imports compete on fair terms with other sources of supply.










(151)


Based on the above, the Commission concluded that the extension of the anti-dumping duty would have a limited impact on the situation of users.




5.4.   Conclusion on Union interest







(152)


The repeal of the measures would have a material and negative impact on the Union producers.










(153)


The extension of the anti-dumping duty would have a limited impact on the importers, who remained neutral.










(154)


Although operations of certain users are exposed to the cost increase of the product concerned and the like product, the investigation confirmed that the measures had a limited impact on the overall performance of the user industries.










(155)


The Commission concludes that on balance, no compelling reasons existed against the continuation of the current anti-dumping measures on imports of the product concerned from the PRC.




6.   CONCLUSION AND DISCLOSURE







(156)


All interested parties were informed of the essential facts and considerations on the basis of which it was intended to maintain the anti-dumping measures in force. They were also granted a period within which they could submit comments subsequent to this disclosure. Only one interested party, the complainant, came forward following the disclosure and expressed its agreement with the Commission's findings and proposal to maintain the anti-dumping measures in force.










(157)


It follows from the above considerations that under Article 11(2) of the basic Regulation, the anti-dumping measures applicable to imports of certain continuous filament glass fibres originating in the PRC, imposed by Implementing Regulation (EU) No 248/2011, as last amended by Implementing Regulation (EU) No 1379/2014, should be maintained.










(158)


The Committee established by Article 15(1) of the basic Regulation (EU) 2016/1036 did not deliver an opinion,




HAS ADOPTED THIS REGULATION:



Article 1

1.   A definitive anti-dumping duty is hereby imposed on imports of chopped glass fibre strands, of a length of not more than 50 mm; glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887); and mats made of glass fibre filaments excluding mats of glass wool, currently falling within CN codes 7019 11 00, ex 7019 12 00 (TARIC codes 7019120021, 7019120022, 7019120023, 7019120025, 7019120039) and 7019 31 00 and originating in the People's Republic of China.


2.   The rates of the definitive anti-dumping duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and produced by the companies listed below shall be as follows:







Company


Definitive anti-dumping duty (%)


TARIC additional code




Jushi Group Co., Ltd; Jushi Group Chengdu Co., Ltd; Jushi Group Jiujiang Co., Ltd


14,5


B990 




Changzhou New Changhai Fiberglass Co., Ltd; Jiangsu Changhai Composite Materials Holding Co., Ltd; Changzhou Tianma Group Co., Ltd


0


A983 




Chongqing Polycomp International Corporation


19,9


B991 




Other cooperating companies listed in Annex I


15,9


 




All other companies


19,9


A999 






3.   The application of the individual anti-dumping duty rates specified for the companies mentioned in paragraph 2 shall be conditional upon presentation to the customs authorities of the Member States of a valid commercial invoice, which shall conform to the requirements set out in Annex II. If no such invoice is presented, the duty applicable to ‘All other companies’ shall apply.


4.   Unless otherwise specified, the relevant provisions in force concerning customs duties shall apply.



Article 2
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.




This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 24 April 2017.


For the Commission


The President

Jean-Claude JUNCKER
            





(1)  
            OJ L 176, 30.6.2016, p. 21.

(2)  
            OJ L 67, 15.3.2011, p. 1.

(3)  
            OJ L 367, 23.12.2014, p. 22.

(4)  
            OJ C 99, 15.3.2016, p. 10.

(5)  Japan, Nippon Electric Glass Co., Ltd (Japan), Malaysia, Nippon Electric Glass (Malaysia) and CAM ELYAF SANAYİİ A.Ș. (Turkey).

(6)  Information provided by APFE in October 2016, based on the presentation ‘European Market and Supply Situation’.

(7)  Information on prices based on customs statistics.

(8)  Volumes exported from the PRC during the RIP in metric tonnes were around 111 thousand to the USA, 78 thousand to the Union, 16 thousand to Malaysia and 14 thousand to India.

(9)  In order of importance: USA, EU, Saudi Arabia, South Korea, United Arab Emirates, Canada, Thailand, Japan, Malaysia and India.

(10)  Information provided by APFE in October 2016, based on the presentation ‘European Market and Supply Situation’.




ANNEX I
Cooperating exporting producers not included in the sample:






Name


TARIC additional code




Taishan Fiberglass Inc.;
PPG Sinoma Jinjing Fiber Glass Company Ltd


B992 




Xingtai Jinniu Fiberglass Co., Ltd


B993 




Weiyuan Huayuan Composite Material Co., Ltd


B994 




Changshu Dongyu Insulated Compound Materials Co., Ltd


B995 




Glasstex Fiberglass Materials Corp.


B996 









ANNEX II
A declaration signed by an official of the entity issuing the commercial voice, in the following format, must appear on the valid commercial invoice referred to in Article 1(3):






1.


The name and function of the official of the entity issuing the commercial invoice.










2.


The following declaration: ‘I, the undersigned, certify that the (volume) of filament glass fibre products sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in the PRC. I declare that the information provided in this invoice is complete and correct’.










3.


Date and signature.