Commission Implementing Regulation (EU) 2024/670 of 26 February 2024 imposing a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts 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
Commission Implementing Regulation (EU) 2024/670of 26 February 2024imposing a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts 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 UnionOJ L 176, 30.6.2016, p. 21., and in particular Article 11(2) thereof,Whereas:1.PROCEDURE1.1.Previous investigations and measures in force(1)In July 2005, by Council Regulation (EC) No 1174/2005Council Regulation (EC) No 1174/2005 of 18 July 2005 imposing a definitive anti-dumping duty and collecting definitely the provisional duty imposed on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China (OJ L 189, 21.7.2005, p. 1)., the Council imposed a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China ("China" or "the PRC"). The measures consisted of an ad valorem anti-dumping duty ranging between 7,6 % and 46,7 % ("the original measures").(2)In July 2008, by Council Regulation (EC) No 684/2008Council Regulation (EC) No 684/2008 of 17 July 2008 clarifying the scope of the anti-dumping measures imposed by Regulation (EC) No 1174/2005 on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China (OJ L 192, 19.7.2008, p. 1). and following an ex officio partial interim review under Article 11(3) of the basic anti-dumping Regulation ("the basic Regulation"), the Council clarified the scope of the measures and excluded from the original anti-dumping measures certain products, i.e. high lifters, stackers, scissor lifts and weighing trucks, which can be self-propelled or moved manually and are used to move and to lift the loads, assist in storage of loads, to stack one pallet above the other, to lift the load to a working level or to lift and to weigh the loads, which were found to be distinct from hand pallet trucks due to their characteristics and specific functions and end uses.(3)In June 2009, by Regulation (EC) No 499/2009Council Regulation (EC) No 499/2009 of 11 June 2009 extending the definitive anti-dumping duty imposed by Regulation (EC) No 1174/2005 on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China to imports of the same product consigned from Thailand, whether declared as originating in Thailand or not (OJ L 151, 16.6.2009, p. 1). the Council, following an anti-circumvention investigation under Article 13 of the basic Regulation, extended the definitive anti-dumping duty applicable to "all other companies" imposed by Regulation (EC) No 1174/2005 to hand pallet trucks consigned from Thailand whether declared as originating in Thailand or not.(4)In October 2011, by Implementing Regulation (EU) No 1008/2011Council Implementing Regulation (EU) No 1008/2011 of 10 October 2011 imposing a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China as extended to imports of hand pallet trucks and their essential parts consigned from Thailand, whether declared as originating in Thailand or not, following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009 (OJ L 268, 13.10.2011, p. 1)., the Council, following an expiry review pursuant to Article 11(2) of the basic Regulation, prolonged the application of the existing anti-dumping duty on imports of hand pallet trucks originating in China.(5)In April 2013, by Implementing Regulation (EU) No 372/2013Council Implementing Regulation (EU) No 372/2013 of 22 April 2013 amending Implementing Regulation (EU) No 1008/2011 imposing a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China following a partial interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009 (OJ L 112, 24.4.2013, p. 1)., the Council, following an interim review pursuant to Article 11(3) of the basic Regulation, amended Regulation (EU) No 1008/2011, modified the original range of anti-dumping duties and imposed a duty rate of 70,8 % applicable to all imports into the Union of hand pallet trucks originating in China.(6)In September 2014, by Implementing Regulation (EU) No 946/2014Commission Implementing Regulation (EU) No 946/2014 of 4 September 2014 amending Council Implementing Regulation (EU) No 1008/2011 imposing a definitive anti- dumping duty on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China following a "new exporter" review pursuant to Article 11(4) of Council Regulation (EC) No 1225/2009 (OJ L 265, 5.9.2014, p. 7)., the European Commission ("Commission"), following a new exporter review pursuant to Article 11(4) of the basic Regulation, amended Regulation (EU) No 1008/2011, imposing an individual duty rate of 54,1 % on imports of hand pallet trucks from Ningbo Logitrans Handling Equipment Co.(7)In August 2016, by Implementing Regulation (EU) 2016/1346Commission Implementing Regulation (EU) 2016/1346 of 8 August 2016 extending the definitive anti-dumping duty imposed by Council Implementing Regulation (EU) No 1008/2011, as amended by Council Implementing Regulation (EU) No 372/2013, on imports of hand pallet trucks and their essential parts originating in the People’s Republic of China to imports of slightly modified hand pallet trucks originating in the People’s Republic of China (OJ L 214, 9.8.2016, p. 1)., the Commission, following an anti-circumvention investigation under Article 13 of the basic Regulation, extended the definitive anti-dumping duty in force to imports of slightly modified hand pallet trucks incorporating a weight indication system not integrated in the chassis (the forks) originating in China.(8)In November 2017, by Implementing Regulation (EU) 2017/2206Commission Implementing Regulation (EU) 2017/2206 of 29 November 2017 imposing a definitive anti-dumping duty on hand pallet trucks and their essential parts 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 (OJ L 314, 30.11.2017, p. 12)., the Commission, pursuant to Article 11(2) of the basic Regulation following an expiry review re-imposed the definitive anti-dumping measures on imports of hand pallet trucks originating in China (the "previous expiry review").(9)The anti-dumping duties currently in force are ad valorem duties established at 70,8 %. An individual duty rate of 54,1 % applies to Ningbo Logitrans Handling Equipment Co., Ltd.OJ L 265, 5.9.2014, p. 7.1.2.Request for an expiry review(10)Following the publication of a notice of impending expiry in the Official Journal of the European UnionOJ C 104, 4.3.2022, p. 10., the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation. The request for review was submitted on 29 August 2022 by Toyota Material Handling Europe and PR Industrial S.r.l. ("the applicants") on behalf of the Union industry of hand pallet trucks in the sense of Article 5(4) of the basic Regulation.(11)The request for review was based on the grounds that the expiry of the 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(12)Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 29 November 2022 the Commission initiated an expiry review regarding imports into the Union of hand pallet trucks originating in the People’s Republic of China and in the Kingdom of Thailand on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union ("the Notice of Initiation")OJ C 452, 29.11.2022, p. 26..1.4.Review investigation period and period considered(13)The investigation of the likelihood of continuation of dumping covered the period from 1 October 2021 to 30 September 2022 ("the review investigation period" or "RIP"). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2019 to the end of the review investigation period ("the period considered").1.5.Interested parties(14)In the Notice of Initiation, interested parties were invited to contact the Commission to participate in the investigation. In addition, the Commission specifically informed the applicants, other known Union producers, the known exporting producers, the Chinese authorities, known importers and users about the initiation of the expiry review and invited them to participate.(15)Interested parties had an opportunity to comment on the initiation of the expiry review and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.1.6.Sampling(16)In the Notice of Initiation, the Commission stated that it might sample interested parties in accordance with Article 17 of the basic Regulation.1.6.1.Sampling of Union producers(17)In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers.(18)In accordance with Article 17(1) of the basic Regulation, the Commission selected the sample based on the largest representative production and sales volume of hand pallet trucks ("HPT") in the review investigation period, which can reasonably be investigated within the time available. This sample consisted of two Union producers.(19)The two sampled Union producers accounted for over 75 % of the production and over 70 % of the production capacity of the Union industry in the review investigation period. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample.(20)No comments were received, and the provisional sample was therefore confirmed. The sample is representative of the Union industry.1.6.2.Sampling of unrelated importers(21)To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known unrelated importers to provide the information specified in the Notice of Initiation. No unrelated importer came forward and provided the requested information.1.6.3.Sampling of exporting producers in China(22)In the Notice of Initiation of the expiry review investigation, the Commission stated that it might sample exporting producers in accordance with Article 17(2) of the basic Regulation.(23)To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known exporting producers in China to provide the information specified in the Notice of Initiation. However, no exporting producer in the country concerned provided the information requested within the time limit defined in the Notice of Initiation.(24)In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation. No response was provided.(25)In view of the above, there was no cooperation from the Chinese producers and the Commission decided that sampling was not necessary, and it informed the Mission of the People’s Republic of China to the European Union accordingly. No comments were made.1.7.Replies to the questionnaires(26)The Commission sent a questionnaire concerning the existence of significant distortions in China within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China ("GOC"). No questionnaire reply was received.(27)The Commission sent questionnaires to the exporting producers, to the sampled Union producers, to the users and to the importers. The same questionnaires had also been made available online on the day of initiationhttps://tron.trade.ec.europa.eu/investigations/case-view?caseId=2635..(28)Both sampled Union producers answered the questionnaires. However, exporting producers, unrelated importers, and users did not respond.(29)As there was no cooperation from the Chinese exporting producers or the GOC, the findings regarding dumping and injury were made on the basis of facts available pursuant to Article 18 of the basic Regulation. The Mission of the People’s Republic of China to the European Union was informed accordingly. No comments were received.1.8.Verification visits(30)The Commission sought and verified all the information deemed necessary for the determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest.(31)Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following Union producers:Toyota Material Handling Europe (Sweden);PR Industrial S.r.l (Italy).(32)The Commission verified the macroeconomic data provided by the Union industry at the premises of their legal representative, White & Case, in Brussels.2.PRODUCT UNDER REVIEW, PRODUCT CONCERNED AND LIKE PRODUCT2.1.Product under review(33)The product under review is the same as in the previous expiry review, namely hand pallet trucks and their essential parts, i.e. chassis and hydraulics, currently falling under CN codes ex84279000 (TARIC codes 8427900011 and 8427900019) and ex84312000 (TARIC codes 8431200011, and 8431200019).(34)In 2008, the Commission carried out an interim review investigation and clarified that the measures in place do not cover certain product categories, i.e. high lifters, stackers, scissor lifts and weighing trucks, which can be self-propelled or moved manually and are used to move and to lift the loads, assist in storage of loads, to stack one pallet above the other, to lift the load to a working level or to lift and to weigh the loads.2.2.Product concerned(35)The product concerned by this investigation is the product under review originating in China.2.3.Like product(36)As established in the original investigation leading to the imposition of the measures as well as in the previous expiry review, this expiry review investigation confirmed that the following products have the same basic physical, chemical and technical characteristics as well as similar basic uses:the product concerned when exported to the Union;the product under review produced and sold on the domestic market of China;the product under review produced and sold in the Union by the Union industry.(37)These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.3.IMPORT DATA STATISTICS(38)To determine the quantity and price of hand pallet trucks imported into the Union, the Commission relies on import statistics. Official data for these imports is recorded both in kilograms and in units (pieces).(39)However, all statistical sources available (Comext, Surveillance 3 and the database based on Article 14(6) of the basic Regulation) showed inconsistent data concerning the volume of hand pallet trucks imported into the Union.(40)The weight per hand pallet truck imported showed inexplicable fluctuations. This was inconsistent with both evidence collected in this investigation and with the import statistics used in the original investigation and in previous expiry reviews, which showed that the weight per hand pallet truck is basically constant and does not vary over time or across Member States.(41)The Commission therefore contacted Eurostat, which informed that data on volumes of imports into two Member States seem not to have been reported correctly, and that the kilograms and pieces reported were not considered reliable in view of their reported value. The data of the imports into the Union without imports into these two Member States was found coherent across Member States and consistent with previous statistics.(42)Therefore, the Commission adjusted the Eurostat import dataset for the period considered by taking the price per piece from all imports into the Union other than those into the two Member States mentioned in recital (41) and applying that price per piece ratio to the reported value of imports into these two Member States in order to determine the corrected volume of these imports in pieces.(43)This adjustment then provided a dataset for imports into the Union where the number of pieces imported and their value per piece was coherent across Member States.(44)This adjusted dataset has been used to calculate dumping in the absence of cooperation from Chinese exporting producers and also for various injury indicators as set out below in Tables 2, 3, 4 and 5 below.4.DUMPING(45)In accordance with Article 11(2) of the basic Regulation, the Commission examined whether the expiry of the measures in force would be likely to lead to a continuation of dumping.4.1.Preliminary remarks(46)As mentioned in recital (25), no exporting producer from China cooperated in the investigation. Therefore, the Commission informed the GOC that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.(47)On this basis, in accordance with Article 18(1) of the basic Regulation, the findings in relation to the existence of dumping and the likelihood of continuation or recurrence of dumping set out below were based on facts available, in particular:information contained in the request;information obtained from cooperating parties in the course of the review investigation, namely the applicant and the sampled Union producers;Eurostat statistics adjusted as set out in Section 3 above; andGlobal Trade Atlas (GTA).(48)In addition, in order to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, the Commission used the data available in the representative country as explained in Section 4.2.4 below.4.2.Procedure for the determination of the normal value under Article 2(6a) of the basic Regulation for the imports of HPT originating in China(49)Given the sufficient evidence available at the initiation of the investigation tending to show, with regard to China, the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission initiated the investigation on the basis of Article 2(6a) of the basic Regulation.(50)To obtain information that it deemed necessary for its investigation regarding the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, as mentioned in point 5.3.2. of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union.(51)No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline.(52)Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in China. No comments were raised by the GOC in this regard.(53)In point 5.3.2. of the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. It also specified that a possible representative third country for the PRC in this case was Brazil, but that it would examine other possibly appropriate countries in accordance with the criteria set out in first indent of Article 2(6a)(a) of the basic Regulation.(54)On 3 April 2023, the Commission informed interested parties by a note on the relevant sources that it intended to use for the determination of the normal value ("Note on sources").(55)In the Note on sources, the Commission informed interested parties that in the absence of cooperation, it would need to rely on facts available according to Article 18 of the basic Regulation. Therefore, the Commission intended to use the information contained in the expiry review request, combined with other sources of information deemed appropriate according to the relevant criteria laid down in Article 2(6a) of the basic Regulation in accordance with Article 18(5) of the basic Regulation.(56)In the Note on sources, the Commission also informed interested parties that it intended to use Brazil as representative country and about the relevant sources it intended to use for the determination of the normal value with Brazil as the representative country. The Commission invited interested parties to comment on the sources and the appropriateness of Brazil as a representative country and to suggest other countries, provided they would submit sufficient information on the relevant criteria.(57)It also informed interested parties that it would establish selling, general and administrative costs ("SG&A") and profit based on available information for the company Paletrans Equipamentos Ltda, a producer in the representative country. No comments were received.4.2.1.Normal value(58)According to Article 2(1) of the basic Regulation, "the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country".(59)However, according to Article 2(6a)(a) of the basic Regulation, "in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks", and "shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits".(60)As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.4.2.2.Existence of significant distortions(61)In recent investigations concerning the steel sector in the PRCCommission Implementing Regulation (EU) 2023/1444 of 11 July 2023 imposing a provisional anti-dumping duty on imports of steel bulb flats originating in the People’s Republic of China and Türkiye (OJ L 177, 12.7.2023, p. 63); Commission Implementing Regulation (EU) 2023/100 of 11 January 2023 imposing a provisional anti-dumping duty on imports of stainless steel refillable kegs originating in the People’s Republic of China (OJ L 10, 12.1.2023, p. 36); Commission Implementing Regulation (EU) 2022/2068 of 26 October 2022 imposing a definitive anti-dumping duty on imports of certain cold-rolled flat steel products originating in the People’s Republic of China and the Russian Federation following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 277, 27.10.2022, p. 149); Commission Implementing Regulation (EU) 2022/191 of 16 February 2022 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China (OJ L 36, 17.2.2022, p. 1); Commission Implementing Regulation (EU) 2022/95 of 24 January 2022 imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel, originating in the People’s Republic of China, as extended to imports of certain tube and pipe fittings, of iron or steel consigned from Taiwan, Indonesia, Sri Lanka and the Philippines, whether declared as originating in these countries or not, following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 16, 25.1.2022, p. 36)., the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.(62)In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principlesSee Implementing Regulation (EU) 2023/1444 recital 66; Implementing Regulation (EU) 2023/100 recital 58; Implementing Regulation (EU) 2022/2068 recital 80; Implementing Regulation (EU) 2022/191 recital 208, Implementing Regulation (EU) 2022/95 recital 59.. In particular, the Commission concluded that in the steel sector – steel being the main raw material to produce the product under review – not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic RegulationSee Implementing Regulation (EU) 2023/1444 recital 45; Implementing Regulation (EU) 2023/100 recital 38; Implementing Regulation (EU) 2022/2068 recital 64; Implementing Regulation (EU) 2022/191 recital 192, Implementing Regulation (EU) 2022/95 recital 46., but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic RegulationSee Implementing Regulation (EU) 2023/1444 recital 58; Implementing Regulation (EU) 2023/100 recital 40; Implementing Regulation (EU) 2022/2068 recital 66; Implementing Regulation (EU) 2022/191 recitals 193 and 194, Implementing Regulation (EU) 2022/95 recital 47. While the right to appoint and to remove key management personnel in SOEs by the relevant State authorities, as provided for in the Chinese legislation, can be considered to reflect the corresponding ownership rights, Chinese Communist Party ("CCP") cells in enterprises, state owned and private alike, represent another important channel through which the State can interfere with business decisions. According to the PRC’s company law, a CCP organisation is to be established in every company (with at least three CCP members as specified in the CCP Constitution) and the company shall provide the necessary conditions for the activities of the party organisation. In the past, this requirement appears not to have always been followed or strictly enforced. However, since at least 2016 the CCP has reinforced its claims to control business decisions in SOEs as a matter of political principle. The CCP is also reported to exercise pressure on private companies to put "patriotism" first and to follow party discipline. In 2017, it was reported that party cells existed in 70 % of some 1,86 million privately owned companies, with growing pressure for the CCP organisations to have a final say over the business decisions within their respective companies. These rules are of general application throughout the Chinese economy, across all sectors, including to the producers of the product under review and the suppliers of their inputs..(63)The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forcesSee Implementing Regulation (EU) 2023/1444 recital 59; Implementing Regulation (EU) 2023/100 recital 43; Implementing Regulation (EU) 2022/2068 recital 68; Implementing Regulation (EU) 2022/191 recitals 195-201, Implementing Regulation (EU) 2022/95 recitals 48-52..(64)Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions when maintaining insolvent firms afloat and when allocating land use rights in the PRCSee Implementing Regulation (EU) 2023/1444 recital 62; Implementing Regulation (EU) 2023/100 recital 52; Implementing Regulation (EU) 2022/2068 recital 74; Implementing Regulation (EU) 2022/191 recital 202, Implementing Regulation (EU) 2022/95 recital 53..(65)In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic RegulationSee Implementing Regulation (EU) 2023/1444 recital 45; Implementing Regulation (EU) 2023/100 recital 33; Implementing Regulation (EU) 2022/2068 recital 75; Implementing Regulation (EU) 2022/191 recital 203, Implementing Regulation (EU) 2022/95 recital 54., as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRCSee Implementing Regulation (EU) 2023/1444 recital 64; Implementing Regulation (EU) 2023/100 recital 54; Implementing Regulation (EU) 2022/2068 recital 76; Implementing Regulation (EU) 2022/191 recital 204, Implementing Regulation (EU) 2022/95 recital 55..(66)Like in previous investigations concerning the steel sector in the PRC, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation.(67)The Commission did so based on the evidence available on the file, including the evidence contained in the request, as well as the Commission Staff Working Document on Significant Distortions in the Economy of the PRC for the Purposes of Trade Defence Investigations ("Report"), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including hand pallet trucks.(68)The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC, as also found by its previous investigations in this respect.(69)The review request alleged that the Chinese economy is widely influenced by interventions by the GOC or other public authorities. These interventions affect various levels of government and the market. The request enumerated the general distortions affecting the HPT market, based on the findings in the Report, but also listed several additional instances of State intervention into the steel sector.(70)First, the request pointed to the subsidies established in the Commission’s investigation into the subsidies present in the HRFS sectorCommission Implementing Regulation (EU) 2017/969 of 8 June 2017 imposing definitive countervailing duties on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the People’s Republic of China and amending Commission Implementing Regulation (EU) 2017/649 imposing a definitive anti-dumping duty on imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the People’s Republic of China (OJ L 146, 9.6.2017, p. 17)., underlining that HRFS is the main raw material to produce HPT. The request further explains that apart from the direct cash grants offered to the companies, the Chinese state also intervenes into the pricing of the raw materials crucial in this sector, such as iron ore and coal. The request pointed out that securing the supply of raw materials to the domestic steel industry is one of the priorities of the Chinese 14th Five-Year Plan ("FYP").(71)To lower the raw material prices, the Chinese State has several instruments: export quotas, export taxes, export licences. Also the request explained that in June 2021, the Pricing Department of the National Development and Reform Commission and the State Administrator for Market Regulation launched a probe into spot iron ore trading. There was also an investigation into coal prices. Those controls are a direct intervention of the Chinese state into pricing of the raw materials used to produce HPT.(72)In addition to the above interventions of the Chinese State into the steel industry, the request also asserted that another way the government has provided indirect support to the steel sector was by not strictly enforcing regulations on environmental protection, especially at the local level.(73)Finally, the request mentioned that the GOC is using equity infusions and conversions to support the steel producing enterprises. For example, the city government of Tianjin planned to restructure the CNY 92 billion debt of Bohai Steel Group by placing its most profitable assets into a new company and converting a portion of the liabilities into bonds.(74)The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the Report and the additional evidence provided by the applicants, on the existence of significant distortions and/or appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.(75)In the steel sector – steel being the main raw material for manufacturing the product under review (see recital (110)) – a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation. Since there was no cooperation from Chinese exporters of the product under investigation, the exact ratio of the private and state-owned producers could not be determined. The investigation confirmed that the HPT sector is very fragmented with a lot of small producers present in the market.(76)In addition, given that the Chinese Communist Party ("CCP" or "the Party") interventions into operational decision making have become the norm also in private companies, with CCP claiming leadership over virtually every aspect of the country’s economy, the influence of the State by means of CCP structures within companies effectively results in economic operators being under control and policy supervision of the government, given how far the State and Party structures have grown together in the PRC.(77)The organisation representing interests of the HPT producers in China is the China Industrial Truck Association ("CITA")China Industrial Truck Association http://www.cncma.org/col/gyclfh/fenhuijieshao. List of represented industries with HPT falling into the 8th category: http://www.cncma.org/article/gyclfh/12957, which a subsidiary of the China Construction Machinery Association ("CCMA")China Construction Machinery Association http://www.cncma.org/. The provisions of the Articles of Association ("AoA") of the CCMA clearly point to a strong party influence. In Article 2, the AoA describe its role in the following way: "serve the government, industry, members, and users" and further: "[t]he Association abides by the Constitution, laws, regulations and national policies, implements the core values of socialism, promotes the spirit of patriotism, abides by social morality, and consciously strengthens the construction of integrity and self-discipline."(78)Article 3 of the CCMA AoA underlines the role of the government/party in the organisation: "The Association adheres to the overall leadership of the Communist Party of China. In accordance with the provisions of the Constitution of the Communist Party of China, it establishes an organization of the Communist Party of China, carries out Party activities, and provides necessary conditions for the activities of the Party organization. The entity in charge of the registration and management of the Association is the Ministry of Civil Affairs of the People’s Republic of China, and the entity in charge of Party building is the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). The Association accepts the business guidance, supervision and management by the entities in charge of registration and management, by the entities in charge of Party building, and by the relevant administrative departments in charge of industry management"See CCMA Articles of Association: http://www.cncma.org/article/472.(79)Party presence is apparent also at the level of the China Iron and Steel Association ("CISA"). According to Article 3 of its Articles of Association, CISA "adheres to the overall leadership of the Communist Party of China" and "accepts the business guidance, supervision and management by the entities in charge of registration and management, by entities in charge of party building, as well as by the relevant administrative departments in charge of industry management".(80)Both public and privately owned enterprises in the steel sector are subject to policy supervision and guidance. The latest Chinese policy documents concerning the steel sector confirm the continued importance which GOC attributes to the sector, including the intention to intervene in the sector to shape it in line with the government policies.(81)This is exemplified by the Ministry of Industry and Information Technology’s 2022 Guiding Opinion on Fostering a High Quality Development of the Iron and Steel IndustryDocument available at: https://www.gov.cn/zhengce/zhengceku/2022-02/08/content_5672513.htm (accessed on 14 July 2023)., which calls for further consolidation of the industrial foundation and significant improvement in the modernization level of the industrial chain, by the 14th FYP on Developing the Raw Material IndustryDocument available at: https://www.miit.gov.cn/zwgk/zcwj/wjfb/tz/art/2021/art_2960538d19e34c66a5eb8d01b74cbb20.html (accessed on 14 July 2023). according to which the sector will "adhere to the combination of market leadership and government promotion" and will "cultivate a group of leading companies with ecological leadership and core competitiveness", or by the 14th FYP on Developing Scrap Steel Industry whose key objectives is to "continuously increase the application ratio of scrap steel, and by the end of the 14th FYP, the comprehensive scrap ratio of national steel making will reach 30 %".(82)Concerning more specifically the product under review, Shandong and Jiangsu have issued their respective 14th FYP on developing shipbuilding and marine engineering equipment, explicitly promoting the shipbuilding sector and the related steel production, such as HPT.(83)Similar examples of the intention by the Chinese authorities to supervise and guide the developments of the steel sector can be seen also in other provinces, such as in Hebei which plans to "steadily implement the group development of organizations, accelerate the reform of mixed ownership of state-owned enterprises, focus on promoting the cross-regional merger and reorganization of private iron and steel enterprises, and strive to establish 1-2 world-class large groups, 3-5 large groups with domestic influence as the support" and to "further expand the recycling and circulation channels of scrap steel, strengthen the screening and classification of scrap steel".(84)The influence of the state can also be found on the municipal level, such as in the Hebei Tangshan Municipality 2022 Iron and Steel 1 + 3 Action Plan, in which different municipal entities are tasked to "foster alliances and reorganisation of enterprises with similar products in the region", such as the two large steel groups Shougang (Jingtang, Qiangang) and Tangsteel New District, "seek and guide financial institutions to provide iron and steel enterprises with low-interest loans to allow them to switch to new industries, and at the same time […] provide subsidies in the form of interest rate discounts" as well as "support optimization of the products’ structure" by granting "new national-level champion manufacturing enterprises and champion products […] with RMB 1 million and RMB 500000 respectively, and new provincial-level champion manufacturing enterprises and champion products [with] RMB 300000 and RMB 100000 respectively".(85)Similarly, the Henan Implementation Plan for the Transformation and Upgrade of the Steel Industry during the 14th FYP foresees the "construction of specific steel production bases" that is to "build 6 large specific steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhoukou, etc., and ensure expansion, intensification and specialization of the industry. Among them, by 2025, the pig iron production capacity in Anyang will be controlled below 14 million tons, and the production capacity of crude steel will be controlled below 15 million tons".(86)The investigation has further confirmed that the GOC is interfering with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation, establishing the existence of personal connections between producers of HPT and the CCP. It was impossible during the investigation to find information on individual producers, as those are mostly very small enterprises. However, the investigation revealed that an important role of the CCP in the association representing the HPT producers, namely the CCMA, which has an active Party committeeSee details on CCMA’s website: http://www.cncma.org/article/16231 and http://www.cncma.org/article/16893 (accessed on 14 July 2023).. The chairman of CITA is also a CCP memberSee CCMA’s website: http://www.cncma.org/article/gyclfh/15525 (accessed on 14 July 2023)..(87)Further, policies discriminating in favour of domestic producers or otherwise influencing the market in the sense of Article 2(6a)(b), third indent of the basic Regulation are in place in the sector of the product under investigation. The investigation identified policy documents showing that the industry benefits from governmental guidance and intervention into the product under investigation as part of the steel sector.(88)The steel industry keeps being regarded as a key industry by the GOC. This is confirmed in the numerous plans, directives and other documents focused on steel, which are issued at national, regional and municipal level. Under the 14th FYP, the GOC earmarked the steel industry for transformation and upgrade, as well as optimization and structural adjustment. Similarly, the 14th FYP on Developing the Raw Materials Industry, applicable also to the steel industry, lists the sector as the "bedrock of the real economy" and "a key field that shapes China’s international competitive edge" and sets a number of objectives and working methods which would drive the development of the steel sector in the time period 2021-2025, such a technological upgrade, improving the structure of the sector (not least by means of further corporate concentrations) or digital transformation.(89)The important raw material used to produce the product under investigation is iron ore. Iron ore is also mentioned in the 14th FYP on Developing the Raw Materials Industry, in which the State plans to "rationally develop domestic mineral resources. Strengthen the exploration of iron ore […], implement preferential tax policies, encourage the adoption of advanced technology and equipment to reduce the generation of mining solid waste".(90)In provinces, such as Hebei, the authorities foresee the following for the sector: "new project investment discount subsidy; explore and guide financial institutions to provide low-interest loans for iron and steel enterprises to switch to new industries, and at the same time, the government will provide discount subsidies". In sum, the GOC has measures in place to induce operators to comply with the public policy objectives of supporting encouraged industries, including the production of the main raw materials used in the manufacturing of HPT. Such measures impede market forces from operating freely.(91)The present investigation has not revealed any evidence that the discriminatory application or inadequate enforcement of bankruptcy and property laws according to Article 2(6a)(b), fourth indent of the basic Regulation in the sector of product under investigation would not affect the manufacturers of the product under investigation.(92)The HPT sector is also affected by the distortions of wage costs in the sense of Article 2(6a)(b), fifth indent of the basic Regulation. Those distortions affect the sector both directly (when producing HPT or the main inputs), as well as indirectly (when having access to inputs from companies subject to the same labour system in the PRC).(93)Moreover, no evidence was submitted in the present investigation demonstrating that the sector of the product under investigation is not affected by the government intervention in the financial system in the sense of Article 2(6a)(b), sixth indent of the basic Regulation. Therefore, the substantial government intervention in the financial system leads to the market conditions being severely affected at all levels.(94)Finally, several inputs are needed to produce HPT. When the producers of HPT purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors.(95)Therefore, not only the domestic sales prices of HPT are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the Report. Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout the PRC. This means, for instance, that an input that was produced in the PRC by combining a range of factors of production, is exposed to significant distortions. The same applies for the input to the input and so forth.(96)No evidence or argument to the contrary has been adduced by the GOC in the present investigation. In sum, the evidence available showed that prices or costs of the product under review, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the basic Regulation as shown by the actual or potential impact of one or more of the relevant elements listed therein.(97)On that basis, and in the absence of any cooperation from the GOC, the Commission concluded that it is not appropriate to use domestic prices and costs to establish normal value in this case. Consequently, the Commission proceeded to construct the normal value exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks, that is, in this case, on the basis of corresponding costs of production and sale in an appropriate representative country, in accordance with Article 2(6a)(a) of the basic Regulation, as discussed in the following section.4.2.3.Representative country(98)The choice of the representative country was based on the following criteria pursuant to Article 2(6a) of the basic Regulation:a level of economic development similar to China. For this purpose, the Commission used countries with a gross national income per capita similar to China on the basis of the database of the World BankWorld Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.;production of the product under review in that countryIf there is no production of the product under review in any country with a similar level of development, production of a product in the same general category and/or sector of the product under review may be considered.;availability of relevant public data in the representative country;where there is more than one possible representative country, preference is given, where appropriate, to the country with an adequate level of social and environmental protection.(99)As explained in recital (54), the Commission issued a Note on sources for the determination of the normal value on 3 April 2023. This note described the facts available and evidence underlying the relevant criteria, as well as informed interested parties of the Commission’s intention to consider Brazil as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.(100)In the Note on sources, the Commission explained that, due to the absence of meaningful cooperation, it would rely on facts available according to Article 18 of the basic Regulation. The choice of representative country was based on the information contained in the expiry review request, combined with other sources of information deemed appropriate according to the relevant criteria laid down in Article 2(6a) of the basic Regulation in accordance with Article 18(5) of the basic Regulation, including import statistics, national statistics of the representative country, market intelligence sources, fees charged by suppliers of utilities in the representative country, and financial information of producers in the representative country.(101)In line with the criteria listed under Article 2(6a) of the basic Regulation, in the Note on sources, the Commission identified Brazil as a country with a similar level of economic development as China. Brazil is classified by the World Bank as "upper-middle income" country on a gross national income basis. Furthermore, Brazil was identified as a country where the product under review is being produced in significant volumes on a both regionally and globally competitive market, and through a similar production process. Brazil was also identified as country where relevant data is readily available.(102)The interested parties did not submit any comment on the Note on sources.(103)Finally, given the absence of cooperation and having established that Brazil was an appropriate representative country, based on all the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.(104)Thus, in the absence of cooperation, as proposed in the expiry review request and given that Brazil met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation, the Commission selected Brazil as the appropriate representative country.4.2.4.Sources used to establish undistorted costs(105)In the Note on sources, the Commission listed the factors of production such as materials, energy and labour used in the production of the product under review by the exporting producers.(106)The Commission also stated that, to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use the Global Trade Atlas to establish the undistorted cost of most of the factors of production, notably the raw materials. In addition, the Commission stated that it would use the ILO, the data of the Ministry of Mines and Energy of Brazil, and the Brazilian Institute of Geography and Statistics for establishing undistorted costs of labour and energy.(107)Finally, the Commission stated that to establish SG&A costs and profit, it would use Orbis Bureau van Dijk and the financial data from one Brazilian producer of the product concerned, as set out in recital (54) above.4.2.5.Undistorted costs and benchmarks4.2.5.1.Factors of production(108)Through the Note on factors of production, the Commission sought to establish a list of factors of production and sources intended to be used to establish a full list of inputs such as materials, energy and labour used to manufacture of the product under review by the producers in China. The Commission did not receive any comment concerning the list of factors of production.(109)In the absence of cooperation by the Chinese exporting producers, the Commission relied on the information provided by the applicants to establish the factors of production used in the production of HPTs.(110)Considering all the information contained in the request and subsequent information submitted by the applicant, the following factors of production and their sources have been identified to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:
Table 1Factors of production of hand pallet truckshttps://www.globalpetrolprices.com/Brazil/
Factor of productionCommodity codeUndistorted valueUnit of measurementSource
Raw materials
Hot rolled flat steel72082610, 720826907,09 CNYkgGTA
Cast Iron (processed components)84312011, 84312019, 8431209046,52 CNYkgGTA
Other steel components (pipes)84312011, 84312019, 8431209046,52 CNYkgGTA
Worked components (pins, bearings)84821010, 8482109049,88 CNYkgGTA
Nylon or other polyamide cable8716909045,68 CNYkgGTA
Labour
Labour61,32 CNYhourBrazilian Institute of Geography and Statistics in combination with the ILO
Energy
Electricity0,944 CNYkWhMinistry of Mines and Energy of Brazil
Natural Gas0,705 CNYkWhGlobal Petrol Prices
By-products/waste
Waste and scrap2,128 CNYkgAnnex V to the request
4.2.5.2.Raw materials and scrap(111)To establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA to which import duties and transport costs were added. An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding China and countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the CouncilRegulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (OJ L 123, 19.5.2015, p. 33). Article 2(7) of the basic Regulation considers that domestic prices in those countries cannot be used for the purpose of determining normal value..(112)The Commission decided to exclude imports from China into the representative country as it concluded in section 4.2.2 that it is not appropriate to use domestic prices and costs in China due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation. Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices. After excluding imports from China into the representative country, the volume of imports from other third countries remained representative.(113)Normally, domestic transport costs should also be added to the benchmark prices. However, the objective of an expiry review is to determine whether dumping continued during the review investigation period or could reoccur, rather than finding its exact magnitude. Thus, the Commission decided that adjustments for domestic transport were unnecessary as they would only result in increasing the normal value and hence the dumping margin.4.2.5.3.Labour(114)To establish the benchmark for labour, the Commission used cost statistics from the Brazilian Institute of Geography and Statistics ("Instituto Brasileiro de Geografia e Estatística")https://www.ibge.gov.br/estatisticas/economicas/industria/9042-pesquisa-industrial-anual.html?=&t=destaques to determine wages in Brazil. The Institute’s website provides detailed information on total annual labour costs in different economic sectors and the Commission used the statutory weekly working hours monthly wages of employees in the manufacturing sector and the average weekly hours worked in Brazil for 2021. On this basis, an hourly rate was calculated at 61,32 CNY/hour.4.2.5.4.Electricity(115)The price of electricity for companies (industrial users) in Brazil is published by the Ministry of Mines and Energyhttps://www.gov.br/mme/pt-br/assuntos/secretarias/spe/publicacoes/boletins-mensais-de-energia. The Commission used the data on the industrial electricity prices from October 2021 to September 2022 and established a price at the level of 0,944 CNY/kWh (covering the review investigation period).4.2.5.5.Natural gas(116)The price of natural gas for companies (industrial users) in Brazil is published by market data provider globalpetrolprices.comhttps://www.globalpetrolprices.com. The Commission used the corresponding pricing for industrial users covering the review investigation period.4.2.5.6.SG&A and profits(117)According to Article 2(6a)(a) of the basic Regulation, "the constructed normal value shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits". In addition, a value for manufacturing overheads needs to be established to cover costs not included in the factors of production referred to above.(118)To establish SG&A and profit, the Commission used the financial data of the Brazilian producer Paletrans Equipamentos Ltda as reported in the Orbis database for the year 2021. The Commission first determined the percentage of SG&A and other costs of the company, which accounted for 11,37 % of the cost of goods sold and then it calculated profits achieved by Paletrans Equipamentos Ltda, which accounted for 14,38 % of the cost of goods sold.4.2.6.Calculation of the normal value(119)Based on the above, the Commission constructed the normal value on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.(120)First, the Commission established the undistorted manufacturing costs. In the absence of cooperation by the exporting producers, the Commission relied on the information provided by the applicants in the request for review on the consumption of each factor (materials and labour) to produce the product under review. These consumption volumes were then multiplied by the undistorted costs per unit established in Brazil, as described in Section 4.2.5. Similarly, following the same methodology, the Commission established the undistorted value of waste and scrap and deducted it from the undistorted manufacturing costs established above.(121)Once the cost of raw materials was established, the Commission added the labour costs, as noted in recital (114), and the cost for electricity and natural gas, as noted in recitals (115) and (116). The labour cost also included a portion of indirect labour cost, which according to the applicant represented the manufacturing overheads.(122)The Commission then added the SG&A and profit in Brazil, which was expressed as a percentage of the cost of goods sold and applied to the undistorted costs of production, and it amounted to 11,37 % and 14,38 % respectively, as explained in recital (118).(123)On that basis, the Commission constructed the normal value on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.4.2.7.Export price(124)In the absence of cooperation by exporting producers from China, the export price for imports made to the Union during the review investigation period was determined in accordance with Article 18 of the basic Regulation, based on Eurostat statistics. The CIF price per HPT was reduced by the ocean freight (EUR 31,79 per HPT) and inland transport costs (EUR 5,86 per HPT). Such costs were based on data provided by the applicants in the request for reviewRequest for review, p. 25; Annex 7..4.2.8.Comparison and dumping margins(125)The Commission compared the constructed normal value determined in accordance with Article 2(6a)(a) of the basic Regulation and the export price as established above.(126)On this basis, the dumping margin expressed as a percentage of the CIF Union frontier price, duty unpaid, was 82,5 %. It was therefore concluded that dumping continued during the review investigation period.5.LIKELIHOOD OF CONTINUATION OF DUMPING(127)Further to the findings of the existence of dumping during the review investigation period, in accordance with Article 11(2) of the basic Regulation, the Commission investigated the likelihood of continuation of dumping, should the measures be repealed. The following additional elements were analysed: the production capacity and spare capacity in China, the relationship between export prices to third countries and towards the Union, the attractiveness of the Union market and circumvention practices.(128)As mentioned in recital (25), neither the Chinese exporting producers, nor the GOC cooperated in this investigation. Therefore, the Commission informed the Chinese authorities that, in accordance with Article 18 of the basic Regulation, facts available may be used to determine whether dumping is currently taking place and to determine the likelihood of continuation of dumping. In particular:information contained in the request;Eurostat statistics;publicly available statistics on the Global Trade Atlas database.(129)The Commission did not receive any comments or requests for an intervention of the Hearing Officer from the Chinese authorities in this regard.5.1.Production capacity and spare capacity in China(130)Concerning production and production capacity in China, in the absence of other sources of information, the analysis was made on the basis of data submitted during the investigation by the applicants.(131)The investigation has showed that there is general overcapacity of HPTs in China for the review investigation period.(132)According to the applicants’ market analysis, the production capacity declared by the Chinese association of HPTs in 2021 amounted to 3 million pieces, with actual production of 1,7 million pieces.(133)As a result, the Chinese spare capacity was estimated to be around 1,3 million pieces or over 40 %Request for review, Annex 12.. However, this is a conservative estimate as according to the applicants many smaller HPT producers in China are not part of the association and therefore the total number of HPT production in China is at least 10-15 % higher than to association’s reported figures.(134)Based on the above, the Commission concluded that the Chinese exporting producers have significant spare capacity, amounting to at least 40 % of the production capacity, which could be used for exports to the Union if the measures were allowed to lapse.5.2.Prices on the Union market(135)Regarding China’s export behaviour to other third countries, there are no statistics available on the export prices of the product under review. The Chinese relevant commodity codes include also other products, namely "Trucks fitted with lifting or handling equipment, non-powered", which have a higher unit price than hand pallet trucks, which increases the average export price. Additionally, the request for review does not provide any data.(136)The GTA database could be used as a proxy to provide a rough indication of the trends of the export volumes. To establish possible development of imports in case measures are repealed, the Commission analysed the prices of Chinese exports on the Union market. The Commission then compared it to worldwide export data from China during the review investigation period.(137)The GTA data showed that the Union market is the second largest destination for import quantities of HPTs from China. Also, the Eurostat data showed that the average selling price to the Union was 212 EUR per piece, while the GTA data showed that it amounted only to 168 EUR to the United States, which is the most important export market and to 179 EUR on the other 6 most important export markets (Russia, India, Türkiye, South Korea, Mexico and Australia).(138)For the same reasons as described above in recital (135), it is therefore concluded that the export price to other third countries is even lower.(139)The data clearly indicates that Chinese export prices for HPTs to the Union market were higher than to other partners, including the United States. This suggests that if measures expire, Chinese producers would likely shift their exports towards the Union market.5.3.Attractiveness of the Union market and circumvention practices(140)The applicants suggested that the Chinese exporting producers are already partially absorbing the anti-dumping duties to maintain their market share in the Union. This is inferred from comparing Chinese export pricesApplicant refers to estimates from Trade Data Monitor (https://www.tradedatamonitor.com) which concur with the data from GTA database, keeping in mind the limitations explained in recital (135). to the Union with the prices of other imports into the Union and with Chinese export prices to other markets. Despite limitations highlighted in recital (135), this implies that without measures, Chinese hand pallet trucks would flood the Union market at low prices.(141)Similarly, as the request showed, it was found that over the first decade of the duration of the measures, Chinese exporters implemented various ways to circumvent the anti-dumping duties in place. First, they began circumventing the duties by trans-shipments and assembly operations in Thailand (recital (3)). Then, Chinese exporters started to circumvent the measures by mounting a weighing device on their trucks and using false customs classification (recital (7)). The circumvention practices show the interest of the Chinese exporting producers in accessing the Union market without restrictions and thus the attractiveness of the Union market for Chinese exports.5.4.Conclusion(142)In view of its findings on the continuation of dumping during the RIP and on the likely development of exports should the measures lapse, the Commission concluded that there is a strong likelihood that the expiry of the anti-dumping measures on imports of the product under review from China would result in the continuation of dumping.6.INJURY6.1.Definition of the Union industry and Union production(143)The like product was manufactured by seven known producers in the Union during the period considered, six of which supported the request and cooperated with the investigation by providing macroeconomic data. They constitute the Union industry within the meaning of Article 4(1) of the basic Regulation.(144)The total Union production during the review investigation period was established at around 230000 tonnes. The Commission established the figure based on the questionnaire replies from the Union industry. Two Union producers were selected in the sample representing over 75 % of the total Union production of the like product.6.2.Union consumption(145)The Commission established the Union consumption based on the sales quantities of the Union producers and import data of hand pallet trucks in pieces from Eurostat.(146)Union consumption developed as follows:
Table 2Union consumption of HPT (pieces)Source:Questionnaire replies and Eurostat.
201920202021Review Investigation period
Total Union consumption573515449473577458709687
Index10078101124
(147)Consumption in the Union increased from 2019 to the end of the RIP by 24 % with a dip in 2020 during the COVID-19 pandemic. Union consumption declined in 2020 but returned to pre-pandemic levels in 2021 and increased to the end of the review investigation period.(148)Hand pallet trucks are an asset and bought only for replacement of existing assets or expansion of activity. Year 2020 saw a pause on any expansion of the sectors requiring hand pallet trucks due to the pandemic, which explains the temporary drop in consumption during that period.6.3.Imports from the country concerned6.3.1.Quantity and market share of the imports from the country concerned(149)The Commission established the quantity of imports and market shares based on import data in Euros and pieces.(150)Imports into the Union from China developed as follows:
Table 3Import quantity (pieces) and market shareSource:Eurostat import data.
201920202021Review Investigation period
Quantity of imports from China (pieces)64719478826391444523
Index100749969
Market share11 %11 %11 %6 %
(151)Imports from China continued during the period considered in varying quantities in a band between 45000 pieces and 70000 pieces. Overall, in the period considered, import volumes from China decreased by 31 %.(152)The market share of Chinese imports remained stable at 11-12 % from 2019 to 2021 but fell back to 6 % in the RIP.6.3.2.Prices of the imports from the country concerned and price undercutting(153)The Commission established the prices of imports based on import data. Price undercutting of the imports was established based on a comparison of this import data with the prices of the sampled Union producers.(154)The weighted average price of imports into the Union from the country concerned developed as follows:
Table 4Import prices (EUR/piece)Source:Eurostat import data.
201920202021Review Investigation period
China148153166204
Index10096112138
(155)Prices of imports of HPT from China increased between 2021 and the RIP, with a 38 % increase over the period considered. In the absence of any cooperation from the Chinese exporting producers the price increases could be attributed to economic conditions, increasing raw material prices and worldwide inflation following the pandemic in 2020.(156)The Commission determined the price undercutting during the review investigation period by comparing:the weighted average sales price per piece of the sampled Union producers charged to unrelated customers on the Union market, adjusted to an ex-works level; andthe average Chinese landed import price based on import statistics, including the existing anti-dumping duty of 70,8 % and customs duties of 4 %.(157)When comparing the import price of hand pallet trucks from China, including the duties in force, to Union industry prices, the import prices were not undercutting the prices of the Union industry.6.4.Imports from third countries other than China(158)The imports of hand pallet trucks from third countries other than China were mainly from Malaysia and Vietnam.(159)The quantity of imports into the Union as well as the market share and price trends for imports of hand pallet trucks from other third countries developed as follows:
Table 5Imports from third countriesSource:Eurostat import data.
Country201920202021Review Investigation period
MalaysiaQuantity in pieces209436125542131139203417
Index100606397
Market share37 %28 %23 %29 %
Average price (EUR/piece)159155174216
Index10098109136
VietnamQuantity in pieces114538118516175216247797
Index100103153216
Market share20 %26 %30 %35 %
Average price (EUR/piece)142144157186
Index100102110131
Other third countriesQuantity in pieces101176959568311793
Index1006956117
Market share2 %2 %1 %2 %
Average price (EUR/piece)206303282253
Index100148137123
Total of all third countries except ChinaQuantity in pieces334090253524316264478251
Index1007695143
Market share58 %56 %54 %65 %
Average price (EUR/piece)154153164195
Index1009693112
(160)Imports into the Union other than from China were almost exclusively from Malaysia and Vietnam during the period considered.(161)The quantity of imports from Malaysia remained stable, while their market share decreased by 8 percentage points on a growing market.(162)Imports from Vietnam increased sharply during the period considered, with quantities increasing by the end of the RIP to more than the double of the quantity in 2019. Their market share increased by 15 percentage points to 35 % in the RIP.(163)The overall price of imports also rose during the period considered by 30 %.6.5.Economic situation of the Union industry6.5.1.General remarks(164)The assessment of the economic situation of the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.(165)As mentioned in recitals (17) to (20), sampling was used for the assessment of the economic situation of the Union industry.(166)For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators based on data supplied by the Union industry. The data related to all Union producers.(167)The Commission evaluated the microeconomic indicators based on data contained in the questionnaire replies from the sampled Union producers. The data related to the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.(168)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.(169)The microeconomic indicators are average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.6.5.2.Macroeconomic indicators6.5.2.1.Production, production capacity and capacity utilisation(170)The total Union production, production capacity and capacity utilisation developed over the period considered as follows:
Table 6Production, production capacity and capacity utilisationSource:Questionnaire replies of the Union Industry.
201920202021Review Investigation period
Production quantity (pieces)212552181256260606231964
Index10085123109
Production capacity (pieces)370500370500475500479500
Index100100128129
Capacity utilisation57 %49 %55 %48 %
(171)Between 2019 and the end of the RIP Union production increased by 9 % and production capacity increased by 29 %.6.5.2.2.Sales quantity and market share(172)The Union industry’s sales quantity and market share developed over the period considered as follows:
Table 7Sales quantity and market share (pieces)Source:Questionnaire replies of the Union Industry.
201920202021Review Investigation period
Sales quantity on the Union market174706148066197280186913
Index10085113107
Market share30 %33 %34 %26 %
(173)During the period considered the sales quantity of the Union industry to unrelated customers in the Union increased by 7 percentage points. Sales dropped in 2020 but recovered after the pandemic.(174)The Union industry was also able to keep their market share relatively stable between 2019 and 2021 but their market share declined in the RIP. Overall, between 2019 and the RIP, the Union industry’s market share dropped from 30 % to 26 %.6.5.2.3.Growth(175)As set out above, both consumption in the Union and sales quantities of the Union industry increased between 2019 and the end of the RIP. Regardless of this growing trend, the Union industry lost 4 % of market share during the period considered. This shows that the Union industry could not benefit from a growing market and could not even maintain its market share.(176)The Commission also notes the increasing market share of imports from Vietnam during the period considered at the expense of all other players on the Union market.6.5.2.4.Employment and productivity(177)Employment and productivity developed over the period considered as follows:
Table 8Employment and productivitySource:Questionnaire replies of the Union Industry.
201920202021Review Investigation period
Number of employees624565653686
Index10090105110
Productivity (pieces/employee)340321399338
Index1009411799
(178)The number of employees of the Union industry increased by 10 % during the period considered. Productivity remained relatively stable from 2019 to the end of the RIP.6.5.2.5.Magnitude of the dumping margin and recovery from past injurious dumping(179)This investigation established a dumping margin of 82,5 %. The effect of the magnitude of the actual margin of dumping on the Union industry might have been eased by the anti-dumping measures in place, however the Union industry was still not able to maintain its market share, which dropped by four percentage points.(180)Although the Union industry’s prices increased during the period considered by 9 %, the corresponding unit costs of production increased by 25 %.(181)The Union industry was unable to increase prices further due to the pressure of the low import prices and in the face of massive increases in the prices of steel and electricity and inflationary pressures on other costs including labour.(182)In the previous expiry review, the Commission was able to see that the Union industry had started to recover from the effect of past injurious dumping. Both sales quantities and market shares had increased significantly, and their financial situation had improved significantly.(183)However during this period considered the situation of the Union industry deteriorated again to the point where the industry has again suffered injury.6.5.3.Microeconomic indicators(184)The microeconomic indicators are presented below in indexes and also in ranges. This has been done to protect the confidentiality of the two sampled Union producers, as disclosure of the exact data would release the data of one producer to the other.(185)The indexes are provided to show the trend of the indicator over time, with 2019 at 100. Ranges are also provided to show the magnitude of the indicator.6.5.3.1.Prices and factors affecting prices(186)The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:
Table 9Sales prices and cost of production in the Union (EUR/piece)Source:Questionnaire replies of the sampled Union producers.
201920202021Review Investigation period
Average unit sales price in the Union[270-300][270-300][270-300][310-330]
Index1009899109
Unit cost of production[270-300][290-320][290-320][340-370]
Index100107106125
(187)Sales prices of the sampled Union producers on the Union market remained relatively stable until the review investigation period. Hand pallet trucks are an asset that, once bought, can remain in service for years if not decades. The product is also by necessity a standard one, as the pallet truck has remained the same design, in order to fit the standard pallet. It is therefore not unusual to see prices stay stable over the period considered.(188)However the sampled Union producers did see an increase of prices of 10 percentage points between 2021 and the RIP.(189)The cost of manufacturing a hand pallet truck depends in essence on two things, the price of steel and the price of energy. Both costs rose rapidly in 2021 and the RIP, increasing the cost of manufacturing significantly, by 19 percentage points between 2021 and the RIP.6.5.3.2.Labour costs(190)The average labour costs of the sampled Union producers developed over the period considered as follows:
Table 10Average labour costs per employeeSource:Questionnaire replies of the sampled Union producers.
201920202021Review Investigation period
Average labour costs per employee (EUR)[35000-38000][40000-43000][47000-50000][47000-50000]
Index100116134132
(191)Labour costs increased by 32 % between 2019 and the end of the period considered, in line with wage increases across the Union economy as a response to inflationary pressures.6.5.3.3.Stocks(192)Stock levels of the sampled Union producers developed over the period considered as follows:
Table 11StocksSource:Questionnaire replies of the sampled Union producers.
201920202021Review Investigation period
Closing stock (pieces)[5000-5500][6000-6500][8000-8500][6500-7000]
Index100124163138
Closing stock as a percentage of production3 %4 %4 %3 %
(193)Although the closing stocks of the Union industry increased by 38 % over the period considered, they were low compared to the total quantity produced, and the closing stock as percentage of production remained stable over the period considered.6.5.3.4.Profitability, cash flow, investments, return on investments and ability to raise capital(194)Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:
Table 12Profitability, cash flow, investments and return on investmentsSource:Questionnaire replies of the sampled Union producers.
201920202021Review Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)10,5 %6,2 %–1,1 %–0,9 %
Cash flow (EUR)[3000000 – 4000000][0 to -1000000][500000 – 1500000][-3500000 to -4500000]
Index100-1945-120
Investments (EUR)[3000000 – 4000000][1000000 – 1500000][0 – 500000][0 – 500000]
Index100321314
Return on investments47 %-15 %30 %-94 %
(195)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.(196)As costs of production increased first between 2019 and 2020 and they further increased between 2021 and the end of the RIP the sampled Union producers were unable to recover their total costs, and the profits that they were able to make in 2019 were unachievable in 2020. In 2021 and the RIP, the Union industry was loss making.(197)The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in line with their inability to make a profit during the end of the period considered.(198)Investments, and the return on investments, also show the same trend, as they are linked to the profitability of the companies and their ability to raise capital to finance investments. The end of the period considered also showed increases in both inflation and interest rates on borrowing.6.6.Conclusion on injury(199)The previous expiry review found that the Union industry showed a fragile recovery from past dumping. In the current investigation, the Union industry has again suffered injury during the period considered, in particular in 2021 and the RIP.(200)Such injury can be seen in the losses made by the industry and the necessity to compete with imports from China, Vietnam and Malaysia based on price, given the standard nature of the product itself.(201)Based on the above, the Commission concluded that the Union industry suffered material injury within the meaning of Article 3(1) of the basic Regulation during the review investigation period.(202)However the Commission notes that this injury comes at a time where Chinese imports of HPT were not undercutting the prices of the Union industry.(203)The Commission therefore concluded that the material injury suffered by the Union industry could not have been caused by the dumped imports from China.7.LIKELIHOOD OF RECURRENCE OF INJURY CAUSED BY DUMPED IMPORTS(204)The Commission concluded in recital (201) that the Union industry suffered material injury during the review investigation period. However the Commission could not conclude that this injury was linked to the dumped imports from China.(205)Therefore, the Commission assessed, in accordance with Article 11(2) of the basic Regulation, whether there would be a likelihood of recurrence of injury caused by the dumped imports from China if the measures against were allowed to lapse.(206)In this respect the following elements were analysed by the Commission:(a)production capacity and spare capacity in China;(b)the relationship between export prices from China to third countries and the price level in the Union;(c)the likely price levels of imports from China in the absence of anti-dumping measures, and their impact on the Union industry, including undercutting and injurious level; and(d)circumvention7.1.Spare capacity in China(207)As set out in recitals (130)–(134), there is substantial production capacity and spare capacity in China to increase exports to the Union market rapidly in the event that the anti-dumping measures are allowed to expire. As established in recital (131), the spare capacity was estimated to be around 1,3 million pieces which equals almost double Union consumption. No other party questioned this data nor provided any other comments.(208)Capacity utilisation was around 60 %, as set out in recital (131), which indicates that Chinese capacity is far in excess of domestic needs. The spare capacity in China cannot be absorbed by the Chinese market, considering any reasonable expectation of its growth. Therefore, there are strong incentives for Chinese producers to export, in particular to the Union market, even more so if the measures were allowed to lapse.7.2.Export prices from China to third countries(209)The request for review provided data on export prices of HPT from China to other countries, in particular the large export market of the United States. This data shows exports continuing in large quantities and lower prices than to the Union.(210)This data was confirmed by the Commission’s own analysis which was set out in recital (135) to (139) above.7.3.Likely price levels from China without measures in force(211)The Commission has considered the data in the request for review and its own analysis which both show the prices at which the Chinese can export to large third country markets, including the United States.(212)These low prices suggest that, should the measures lapse, import prices from China into the EU would drop to these levels. As shown Table 4, import prices from China during the review investigation period were 204 EUR/piece, which is materially lower than the average sales price of the Union industry [310-330] EUR/piece shown in Table 9, and also below their cost of production [340-370] EUR/piece.(213)Therefore, it is likely that without anti-dumping duties, the Chinese imports would materially undercut the Union prices.7.4.Circumvention(214)The Commission notes in recital (141) that previous investigations have shown circumvention of the measures in force.(215)First, the measures were found to be circumvented via the Kingdom of Thailand and the measures remain extended to imports consigned from Thailand, whether originating in Thailand or not.(216)Second, the Chinese exporters also circumvented the measures by mounting a so-called "weight indication system" on their hand pallet trucks – but not integrated in the chassis – and thereby classifying the products in a way to avoid payment of duty.(217)This evidence of circumvention shows that Chinese producers were willing to circumvent the measures to access the Union market without payment of duties, showing the attractiveness of the Union market to these Chinese producers.7.5.Conclusion of the likelihood of recurrence of injury(218)In view of the above, the Commission concluded that should the measures lapse, it is likely that this will result in a significant increase of dumped imports from China at injurious price levels, and therefore further aggravating the injury suffered by the Union industry.8.UNION INTEREST(219)In accordance with Article 21 of the basic Regulation, the Commission examined whether maintaining the existing anti-dumping measures would be against the interest of the Union as whole. 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 end users.8.1.Interest of the Union industry(220)All known producers of hand pallet trucks cooperated with the investigation. Two companies were sampled and visited during the investigation and the remaining companies provided information for the macroeconomic indicators via the lawyers acting on behalf of the Union industry.(221)The Commission concludes that given the injury suffered by the Union industry during the period considered, if the measures lapsed this injury would continue and the economic situation of the Union industry would further deteriorate.(222)The measures are clearly in the interest of the Union industry.8.2.Interest of unrelated importers and users(223)No importers or users cooperated with the investigation.(224)In all previous investigations the Commission concluded that the measures have not had a serious effect on either importers or users of hand pallet trucks.(225)In the absence of new evidence, the Commission therefore continues to conclude that the continuation of measures will not affect importers or users to any significant extent.8.3.Conclusion on Union interest(226)Based on the above, the Commission concluded that there were no compelling reasons of the Union interest against the maintenance of the existing measures on imports of hand pallet trucks originating in China.9.ANTI-DUMPING MEASURES(227)All interested parties were informed of the essential facts and considerations based on which it was intended to recommend that the existing measures be maintained. They were also granted a period to make representations after this disclosure.(228)No comments were received.(229)Based on the conclusions reached by the Commission on likelihood of continuation of dumping, likelihood of recurrence of injury and Union interest, the anti-dumping measures on hand pallet trucks from China should be maintained.(230)The individual company anti-dumping duty rates specified in this Regulation are exclusively applicable to imports of the product under review originating China and produced by the named legal entities. Imports of the product under review produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to all other companies. They should not be subject to any of the individual anti-dumping duty rates.(231)A company may request the application of these individual anti-dumping duty rates if it changes subsequently the name of its entity. The request must be addressed to the CommissionEuropean Commission, Directorate-General for Trade, Directorate G, Rue de la Loi 170, 1040 Brussels, Belgium.. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a regulation about the change of name will be published in the Official Journal of the European Union.(232)In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the CouncilRegulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1). when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.(233)The measures provided for in this regulation are in accordance with the opinion of the Committee established by Article 15(1) Regulation (EU) 2016/1036,HAS ADOPTED THIS REGULATION:
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