Commission Implementing Regulation (EU) 2024/1923of 10 July 2024imposing a provisional anti-dumping duty on imports of titanium dioxide originating in the People’s Republic of China

(232) The IBGE statistics provide information on the total annual wages and related charges and on the number of employees in the chemical sector. Only information related to staff linked to production was considered. Values were indexed to the investigation period using the national consumer price index

https://www.ibge.gov.br/en/statistics/economic/prices-and-costs/17136-national-consumer-pricce-index.html?edicao=36055&t=downloads

.

3.4.4.

Electricity

(233) The Commission used the industrial electricity price statistics published by the Ministry of Mines and Energy of Brazil

https://www.gov.br/mme/pt-br/assuntos/secretarias/sntep/publicacoes/boletins-mensais-de-energia/2023-1/ingles

for the investigation period. The rates published in the monthly bulletin included the Imposto sobre Circulação de Mercadorias e Serviços (ICMS), a tax levied by the Brazilian states on the circulation of goods and the provision of interstate and inter municipal transportation and communications services. This tax could be claimed back by the industrial users and was therefore not effectively paid. As ICMS was collected by most states at the rate of 17 % to 18 % during the investigation period, the Commission recalculated the electricity benchmark, deducting an average of 17,5 % from the rates published.

3.4.5.

Natural gas

(234) The Commission used the price of natural gas for industrial users in Brazil as published by the Ministry of Mines and Energy of Brazil

https://www.gov.br/mme/pt-br/assuntos/secretarias/sntep/publicacoes/boletins-mensais-de-energia/2023-1/ingles

for the investigation period. The rates published in the monthly bulletin included the ICMS tax, and the Commission applied the methodology used for determination of the electricity prices, as outlined in recital (233).

3.4.6.

Steam

(235) The Commission calculated the price of steam in Brazil using the methodology suggested by the U.S. Department of Energy

https://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/steam15_benchmark.pdf (last accessed on 22 April 2024). The methodology refers to the cost of saturated steam for typical values of operating pressure and feedwater temperature. In the application of the methodology, an average of these typical values was used.

. This methodology provides a cost for steam based on the heat input required to produce it. To this end, the Commission used natural gas as heat input and used the price of gas for industrial users in Brazil as published by the Ministry of Mines and Energy of Brazil covering the investigation period.

3.4.7.

Manufacturing overhead costs, SG&A and profits

(236) 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 overhead costs needs to be established to cover costs not included in the factors of production referred to above.

(237) The manufacturing overheads incurred by the cooperating exporting producers were expressed as a share of the costs of manufacturing actually incurred by the exporting producers. This percentage was applied to the undistorted costs of manufacturing.

(238) For establishing an undistorted and reasonable amount for SG&A and for profit at the ex-works level of trade, the Commission relied on the financial data for 2022 for Tronox Brazil as extracted from the company’s website

https://www.tronox-ri.com.br/informacoes-financeiras/central-de-resultados/

.

3.4.8.

Calculation

(239) On the basis of the above, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

(240) First, the Commission established the undistorted manufacturing costs. The Commission applied the undistorted unit costs to the actual consumption of the individual factors of production of the cooperating exporting producers. These consumption rates provided were verified during the verifications. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country, as described in Section 3.4.1.

(241) Once the undistorted manufacturing cost was established, the Commission applied the manufacturing overheads, SG&A and profit as noted in Section 3.4.7. The SG&A and profit were determined on the basis of the financial statements of Tronox Brazil as explained in section 3.3.3. SG&A expressed as a percentage of the Costs of Goods Sold (COGS’) and applied to the undistorted costs of production, amounted to 5,9 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 5,0 %.

(242) On that basis, the Commission constructed the normal value per product type on an ex-works basis in accordance with Article 2(6a)(a) of the basic Regulation.

3.5.

Export price

(243) The sampled exporting producers exported to the Union either directly to independent customers or through related companies.

(244) For the exporting producers that exported the product concerned directly to independent customers in the Union, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(245) For the exporting producers that exported the product concerned to the Union also through a related company acting as an importer, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union, in accordance with Article 2(9) of the basic Regulation. In this case, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses of the related importer, and a reasonable profit.

(246) In the absence of cooperation of unrelated importers in the present case, a reasonable profit established at 6,89 % in the recent polyvinyl alcohols (PVA)

Recital (352) of Commission Implementing Regulation (EU) 2020/1336 of 25 September 2020 imposing definitive anti-dumping duties on imports of certain polyvinyl alcohols originating in the People’s Republic of China (OJ L 315, 29.9.2020, p. 1).

investigation for another chemical product was used in the present investigation, to establish a reliable export price at the Union frontier level.

3.6.

Comparison

(247) Article 2(10) of the basic Regulation requires the Commission to make a fair comparison between the normal value and the export price at the same level of trade and to make allowances for differences in factors which affect prices and price comparability. In the case at hand the Commission chose to compare the normal value and the export price of the sampled exporting producers at the ex-works level of trade. As further explained below, where appropriate, the normal value and the export price were adjusted in order to: (i) net them back to the ex-works level; and (ii) make allowances for differences in factors which were claimed, and demonstrated, to affect prices and price comparability.

3.6.1.

Adjustments made to the normal value

(248) As explained in recital (239), the normal value was established at the ex-works level of trade by using costs of production together with amounts for SG&A and for profit, which were considered to be reasonable for that level of trade. Therefore, no adjustments were necessary to net the normal value back to the ex-works level.

(249) The Commission found no reasons for making any allowances to the normal value (other than the adjustment for VAT, which was payable on the export sales without refund), nor were such allowances claimed by any of the sampled exporting producers.

3.6.2.

Adjustments made to the export price

(250) In order to net the export price back to the ex-works level of trade, adjustments were made on the account of transport, warehousing costs, customs duties, insurance, handling and loading expenses.

(251) Allowances were made for the following factors affecting prices and price comparability: commission, credit costs and bank charges.

(252) Regarding the adjustment for commissions, during the investigation period, LB exported TiO2 to the Union through related traders located outside the Union, namely in Hong Kong and in the UK. The traders bore the responsibility for the selling process and commercial risks associated therewith and received a markup for the sales. Therefore, the Commission found that the functions of these traders were similar to those of an agent working on a commission basis. Consequently, an adjustment under Article 2(10)(i) was also made for sales through the related trading companies. The adjustment consisted of the deduction of SG&A of the trading companies and a 6,89 % profit established as set out in recital (246).

3.7.

Dumping margins

(253) For the sampled cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

(254) On this basis, the provisional weighted average dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

CompanyProvisional dumping margin

LB group:

LB GROUP CO., LTD.

HENAN BILLIONS ADVANCED MATERIAL CO., LTD.

LB LUFENG TITANIUM INDUSTRY CO., LTD.

LB SICHUAN TITANIUM INDUSTRY CO., LTD.

LB XIANGYANG TITANIUM INDUSTRY CO., LTD.

39,7 %

Anhui Gold Star group:

Anhui Gold Star Titanium Dioxide (Group) Co., Ltd.

ANHUI GOLD STAR TITANIUM DIOXIDE TRADING COMPANY LIMITED

14,4 %

(255) For the cooperating exporting producers outside the sample, the Commission calculated the weighted average dumping margin, in accordance with Article 9(6) of the basic Regulation. Therefore, that margin was established on the basis of the margins of the sampled exporting producers.

(256) On this basis, the provisional dumping margin of the cooperating exporting producers outside the sample is 35,0 %.

(257) For all other exporting producers in the PRC, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers.

(258) The level of cooperation is the volume of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of Eurostat statistics.

(259) The level of cooperation in this case is high because the exports of the cooperating exporting producers constituted over 96 % of the total imports during the investigation period. On this basis, the Commission decided to establish the dumping margin for non-cooperating exporting producers at the level of the cooperating sampled company with the highest dumping margin.

(260) The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

CompanyProvisional dumping margin

LB group:

LB GROUP CO., LTD.

HENAN BILLIONS ADVANCED MATERIAL CO., LTD.

LB LUFENG TITANIUM INDUSTRY CO., LTD.

LB SICHUAN TITANIUM INDUSTRY CO., LTD.

LB XIANGYANG TITANIUM INDUSTRY CO., LTD.

39,7 %

Anhui Gold Star group:

Anhui Gold Star Titanium Dioxide (Group) Co., Ltd.

ANHUI GOLD STAR TITANIUM DIOXIDE TRADING COMPANY LIMITED

14,4 %Other cooperating companies35,0 %All other companies39,7 %

1. INJURY

4.1.

Definition of the Union industry and Union production

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

(262) The total Union production during the investigation period was established at around 560000 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as the macro questionnaire submitted by the complainant. As indicated in recital (8), the three sampled Union producers represented 50 % of the total Union production of the like product.

4.2.

Determination of the relevant Union market

(263) To establish whether the Union industry suffered injury and to determine consumption and the various economic indicators related to the situation of the Union industry, the Commission examined whether and to what extent the subsequent use of the Union industry’s production of the like product had to be taken into account in the analysis.

(264) The Commission found that a small part of the total Union producers’ production was destined for the captive market. Only two of all eleven Union producers reported having sold the product captively and due to the business confidential nature of this data, the exact volumes cannot be disclosed in this Regulation. The two producers were not among the sampled producers. The captive market was stable and below 1 % of total Union consumption throughout the period considered.

(265) The Commission examined certain macroeconomic indicators relating to the Union industry on the basis of data of sales on the free market. These indicators are: sales volume on the Union market and market shares.

(266) Other macroeconomic indicators could meaningfully be examined only by referring to the whole activity, including the captive use and captive sales of the Union industry. These are: production volumes; capacity; capacity utilisation; employment; productivity; and export sales. They depend on the whole activity, whether the production is captive or sold on the free market.

(267) Finally, considering that only two non-sampled producers reported very limited amounts of captive sales, those sales are not reflected in the analysis of microeconomic indicators, which are based on data reported by the sampled Union producers.

(268) Given that only a small part of the Union producers’ production was destined for the captive market, the investigation found no meaningful difference between the economic indicators whether examined referring to the whole activity or on the basis of data for the free market.

4.3.

Union consumption

(269) The Commission established the Union consumption on the basis of the Union industry’s sales volume to the Union market, sourced from the verified questionnaire replies of the sampled Union producers and the macro-questionnaire submitted by the complainant, and the imports into the Union of the product concerned from third countries based on Eurostat statistics.

(270) Union consumption developed as follows:

Table 2

Union consumption (tonnes)

Source:

verified questionnaire replies of the sampled Union producers, macro-questionnaire, Eurostat.

202020212022Investigation periodTotal Union consumption122042412675821125734954998Index1001049278

(271) Union consumption increased by 4 percentage points from 2020 to 2021 and was higher than usual in both years. This was mainly because of Covid-19 lockdowns which prompted people to renovate their homes, which resulted in high demand for indoor paints and coatings and, consequently, for TiO2 as their main raw material. Since Covid-19 pandemic was present throughout the year 2021 (as opposed to only being declared mid-March 2020), it logically follows that the resulting positive effects on demand in the Union market were more pronounced in 2021.

(272) After such peaking demand, the Union consumption decreased in 2022 by 12 percentage points, and in the investigation period by further 14 percentage points.

4.4.

Imports from the country concerned

4.4.1.

Volume and market share of the imports from the country concerned

(273) The Commission established the volume of imports on the basis of Eurostat statistics. The market share of the imports was established on the basis of the import volume and total Union consumption as established in Table 2 above.

(274) Imports into the Union from the country concerned developed as follows:

Table 3

Import volume (tonnes) and market share

Source:

Eurostat.

202020212022Investigation periodVolume of imports from the country concerned (tonnes)178256169146186885209375Index10095105117Market share15 %13 %17 %22 %Index10091114150

(275) Chinese imports were present in the Union market from the beginning of the period concerned. Imports show an increasing trend, resulting in an overall 17 % increase from 2020 to the investigation period. In the shrinking market observed in 2022 and the investigation period (see Table 2 above), this resulted in a significant 50 % increase of Chinese market share from 2020 to the investigation period.

(276) In 2021, there was a temporary reversal of this continuous increase in Chinese import volumes and market share due to extraordinary circumstances of the shipping crisis which was prevalent in 2021. The volume of imports from China and their market share decreased that year by 5 % and 9 %, respectively.

(277) However, as soon as the shipping crisis began to abate in 2022, Chinese imports started increasing again, gaining 10 percentage points in volume terms in 2022 and additional 12 percentage points in the investigation period.

4.4.2.

Prices of the imports from the country concerned and price undercutting

(278) The Commission established the prices of imports on the basis of Eurostat statistics dividing the total values of Chinese imports by the total volume of those imports. Price undercutting of the imports was established on the basis of verified questionnaire replies of the sampled exporting producers in China.

(279) The weighted average price of imports into the Union from the country concerned developed as follows:

Table 4

Import prices (EUR/tonne)

Source:

Eurostat.

202020212022Investigation periodChina1826250730322235Index100137166122

(280) Import prices from China increased in 2021 and 2022. The complainant claimed that such increase coincided with an increase in global prices of the ilmenite ore, as well as with increased shipping costs experienced in 2021 and 2022. As the shipping costs decreased closer to historic levels by the end of 2022 (i.e., in the beginning of the investigation period), the Chinese prices dropped in tandem, despite the cost of main raw materials remaining high.

(281) Despite this, Chinese landed prices remained below Union industry’s prices throughout the period considered, with the exception in 2021, when container prices from China to the Union reached their peak.

(282) The Commission determined the price undercutting during the investigation period by comparing:

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

(2) the corresponding weighted average prices per product type of the imports from the sampled cooperating Chinese exporting producers to the first independent customer on the Union market, established on a Cost, insurance, freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs.

(283) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period. It showed a weighted average undercutting margin of between 14 % and 15,3 % by the imports from the sampled exporting producers on the Union market. The volume of imports found to be undercutting this way represents around 70 % of total imports from China in the investigation period.

(284) The Commission furthermore established the existence of price suppression throughout the period considered, and price depression in the investigation period.

(285) While Chinese import prices were increasing in 2021 and 2022, they were consistently below the Union industry prices, except in 2021 when the shipping costs were at their all-time high. As shown in Table 8 below, the gap between Union industry’s sales prices and their costs of production was narrowing in each year of the period considered, demonstrating price suppression.

(286) Furthermore, in the investigation period the Chinese import prices dropped by more than one quarter compared to 2022, while increasing their volume and market share in the Union market. This caused significant price depression on the Union industry in the investigation period, as the Union industry had to decrease its prices below its cost of production and absorb losses in order to retain some market share, despite the costs of production continuing to increase.

4.5.

Economic situation of the Union industry

4.5.1.

General remarks

(287) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

(288) As mentioned in recital (19), sampling was used for the determination of possible injury suffered by the Union industry.

(289) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the reply to the macro-questionnaire provided by the complainant and Eurostat data on imports of the product under investigation. The data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the verified 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.

(290) 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.

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

4.5.2.

Macroeconomic indicators

4.5.2.1.

Production, production capacity and capacity utilisation

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

Table 5

Production, production capacity and capacity utilisation

Source:

Macro-questionnaire provided by the complainant.

202020212022Investigation periodProduction volume (tonnes)809485843918743733560647Index1001049269Production capacity (tonnes)964000934300941900943200Index100979898Capacity utilisation84 %90 %79 %59 %Index1001089471

(293) The production volume of the Union industry decreased by 31 % between 2020 and the investigation period, closely following the trends observed in sales volume depicted in Table 6 below. This decrease in production volume was more significant than the 22 % decrease in the Union consumption over the period considered. The temporary increase in production volumes observed in 2021 is attributable to the uptick in demand caused, as explained in recital (271) above, by the stay-at-home economy during Covid-19 lockdowns, which the Union industry managed to particularly benefit from due to decrease of Chinese imports that year.

(294) Total Union capacity fluctuated by 2-3 % throughout the period considered. The drop in capacity observed in 2021 is due to one month stoppage of production for maintenance that one of the producers had to undertake that year, and the closure of Kronos Leverkusen sulphate production line. In 2022 and the investigation period capacity slightly increased, mostly due to completion of projects which resulted in debottlenecking at some of the plants in the Union.

(295) In addition, one non-sampled Union producer, Venator, closed two of its plants in the Union: Venator Duisburg and Venator Scarlino. The decisions concerning the closure of these plants were taken in June 2023 and in February 2024 and therefore the effect of these plant closures on the volume of production and on production capacity was not yet visible or only visible to a limited extent during in the investigation period.

(296) The capacity utilisation increase observed in 2021, while indeed prompted by increase in net production volumes due to increased demand during the Covid-19 pandemic, is thus outsized because of the drop in overall capacity. Production volumes and capacity utilisation then drop in 2022 and especially in the investigation period, partly following the trend of the overall decrease in demand, but also due to the loss of market share to Chinese imports, as explained below.

4.5.2.2.

Sales volume and market share

(297) The Union industry’s sales volume and market share developed over the period considered as follows:

Table 6

Sales volume and market share

Source:

Macro questionnaire provided by the complainant and Eurostat.

202020212022Investigation periodSales volume on the Union market (tonnes)604643680395559502451583Index1001139375Market share49 %53 %49 %47 %Index10010810095

(298) Union industry sales volume increased in 2021 by 13 percentage points compared to 2020, mainly due to the aforementioned increase in demand prompted by stay-at-home economy during Covid-19 lockdowns and the decrease in pressure exerted by dumped Chinese imports in that year. As already explained above, the demand for TiO2 started decreasing in 2022 after the high demand in 2021. As the shipping crisis was abating at the same time, the Chinese imports started increasing, both in absolute terms and in market shares, which resulted in the precipitous drop of Union sales volumes.

(299) Market shares also reflect such market reality. In the absence of Chinese dumped imports during the surge in demand in 2021, the Union industry gained 4 percentage points in market share. In the shrinking market of 2022 and the investigation period, with ever increasing volumes of dumped imports from China, the Union industry first lost 4 percentage points in market share in 2022, and further 2 percentage points in the investigation period.

4.5.2.3.

Growth

(300) As explained above, due to special circumstances caused by Covid-19 pandemic (stay-at-home economy due to lockdowns in part of 2020 and in 2021, and the shipping crisis in 2021), Union industry was able to profit from peak demand in 2021 with Chinese imports decreasing that year. This temporarily slowed the decline of the Union industry which, albeit in the shrinking market of 2022 and the investigation period, lost significant market share in favour of Chinese imports.

4.5.2.4.

Employment and productivity

(301) Employment and productivity developed over the period considered as follows:

Table 7

Employment and productivity

Source:

Macro-questionnaire provided by the complainant.

202020212022Investigation periodNumber of employees5105491548384787Index100969594Productivity (tonne/FTE)159172154117Index1001089774

(302) Union industry steadily decreased its workforce throughout the period considered, as its production and sales volumes decreased.

(303) Productivity developed in line with the changes in production and employment. It decreased by 26 % over the period considered, with a temporary increase in 2021, thanks to the increase in Union industry’s production and sales due to above mentioned exceptionally favourable conditions in that year.

4.5.2.5.

Magnitude of the dumping margin and recovery from past dumping

(304) All dumping margins were above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the country concerned.

(305) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

4.5.3.

Microeconomic indicators

4.5.3.1.

Prices and factors affecting prices

(306) The weighted average unit sales prices of the two Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 8

Sales prices in the Union

Source:

Verified questionnaire replies of the sampled Union producers.

202020212022Investigation periodAverage unit sales price in the Union on the free market (EUR/ tonne)2277243230762990Index100107135131Unit cost of production (EUR/ tonne)2010220330253442Index100110151171

(307) Table 8 above shows that the period of 2021 onwards was a period of continuous costs increases, driven mainly by increasing costs of the principal raw materials and energy. This was particularly pronounced in 2022 and the investigation period, when global inflationary pressures increased significantly. The complainant claimed that, even though the Russian invasion of Ukraine in February 2022 caused a large increase in energy costs in the Union, the main factor which influenced the increase in costs of production is the rise in costs of the main raw material, titanium ores.

(308) This observed increase in cost of production was thus met by an increase in prices in 2021 and 2022, when the Union industry was still able to keep their sales prices above their costs of production. As the Table 8 above shows, however, the gap between the cost of production and the sales price was narrowing more and more each year. Finally, in the investigation period, despite further significant cost increase compared to 2022, the Union producers could not only no longer keep their sales prices above their cost of production, but even had to decrease their prices compared to 2022 to retain some market share.

(309) Despite the demand for TiO2 being indeed the lowest in the investigation period, imports from several sources (such as UK and Mexico, see Table 12 below) managed to increase their prices compared to 2022, while the prices of imports from other sources decreased only slightly. The most pronounced drop in prices, and at the same time the most pronounced increase in market shares came from Chinese imports, which thus clearly exerted significant pressure on the Union industry to decrease their own prices.

4.5.3.2.

Labour costs

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

Table 9

Average labour costs per employee

Source:

Verified questionnaire replies of the sampled Union producers.

202020212022Investigation periodAverage labour costs (EUR/FTE)63811672616856267756Index100105107106

(311) Average labour cost per employee increased by 6 % over the period considered.

4.5.3.3.

Inventories

(312) Stock levels of the three sampled Union producers developed over the period considered as follows:

Table 10

Inventories

Source:

Verified questionnaire replies of the sampled Union producers.

202020212022Investigation periodClosing stocks (tonnes)74928498586094549762Index100678166Closing stocks as a percentage of production9,35,98,28,9Index100648996

(313) The level of inventories in absolute terms and as a percentage of production decreased by 33 % and 36 %, respectively, in 2021 due to favourable conditions where the Union industry was able to increase their sales volumes and market share. As the market began shrinking in 2022, volume of inventories increased again and not all the foreseen production was sold. In the investigation period the inventories decreased again as the production volumes were being reduced too. Since sales volumes were decreasing with the shrinking market in both 2022 and the investigation period, inventories as percentage of production began increasing again, reaching in the investigation period almost the same level that they were at in 2020.

4.5.3.4.

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

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

Table 11

Profitability, cash flow, investments and return on investments

Source:

Verified questionnaire replies of the sampled Union producers.

202020212022Investigation periodProfitability of sales in the Union to unrelated customers (% of sales turnover)7,9 %9,8 %5,1 %–11,7 %Index10012565-148Cash flow (EUR)924616061248929413767112-4293138Index1001354-46Investments (EUR)37870922363145343954271243030210Index10096104114Return on investments53 %41 %2 %-67 %Index100795-127

(315) The Commission established the profitability of the three 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.

(316) As shown in Table 8 above, the gap between Union industry’s sales prices and their costs of production was narrowing in each year of the period considered, whereas in the investigation period the Union industry even had to decrease their sales prices below the increasing cost of production. This shows that while price suppression was present during the period considered, it turned into price depression in the investigation period.

(317) The imbalance of the increasing cost and supressed prices translated into the erosion in profitability over the period considered, with year 2021 again being the exception, as explained below.

(318) The increase in profitability in 2021 is furthermore explained by the fact that, even though net profit on a unit sale in 2021 (EUR 229, the difference between unit sales price and unit cost of production) was lower than net profit on a unit sale in 2020 (EUR 268), the cash flow still rose because of an increase in sales volumes.

(319) As the Union industry’s sales were decreasing in 2022 and the investigation period, and its prices kept being suppressed in 2022 and depressed in the investigation period, its profitability fell by 4,8 percentage points in 2022 and by further 16,8 percentage points in the investigation period, turning sharply to the negative.

(320) Investments decreased by -4 % in 2021, before apparently increasing by +8 % in 2022 and further +10 % in the investigation period. However, this trend of increase is misleading, and the Commission was able to verify that this apparent increase in 2022 and the investigation period can be squarely attributed to one investment of around 10 million EUR for capacity expansion, spread across 2022 and the investigation period, which one Union producer had previously committed to make and could not reasonably cancel. As the producer demonstrated, the planning, groundwork, and ordering of equipment was all made before the period concerned. Once the equipment was delivered, it had to be installed, because it would have been more expensive to leave it unused and exposed to the elements. Without this investment, the overall investment figures of the sampled Union producers would be showing a declining trend similar to other main injury indicators.

(321) The return on investments is the profit in percentage of the net book value of investments. In light of the developments described above, it was continuously decreasing throughout the period considered, falling from a healthy +53 % in 2020 to a deep negative -67 % in the investigation period.

(322) The ability of the Union industry to raise capital had been severely affected by the erosion of the profitability as well as of the cash flow incurred over the period considered.

4.5.4.

Conclusion on injury

(323) All the main injury indicators showed a negative trend during the period considered and, although the situation of the Union industry temporarily improved in 2021, the injury indicators declined in 2022 and then sharply declined in the investigation period.

(324) The production volume of the Union industry decreased by 31 % and its sales volume decreased by 25 % between 2020 and the investigation period. This decrease was more significant than the decrease of the Union consumption, which decreased by 22 % during the period considered. Consequently, the market share of the Union industry dropped from 49 % in 2020 to 47 % in the investigation period with a temporary increase in 2021 and beginning of 2022.

(325) At the same time, Chinese imports increased in volume by 17 % during the period considered and the Chinese market share increased from 15 % in 2020 to 22 % in the investigation period. Imports from China temporarily dropped by 5 % in volume due to the shipping crisis between 2020 and 2021. Being temporarily shielded from cheap imports from China, and with increasing demand during the Covid-19 pandemic, the Union industry could increase its sales quantities and sales prices, achieving unexpectedly high profits in 2021. However, this positive trend was due to exceptional circumstances, and it was reversed by the investigation period, when the sales quantities of the Union industry dropped significantly (by 38 percentage points between 2021 and the investigation period) and its profitability plummeted (from 10 % in 2021 to -12 % in the investigation period).

(326) In addition, the Union industry was faced with a significant increase in the cost of production, which rose by 71 % over the period considered. The increase in cost was driven mainly by higher costs of the principal raw materials and energy. The Union industry, however, could not increase their sales prices sufficiently to offset this major cost increase. Their sales prices increased only by 31 % over the period considered. The prices peaked in 2022, but markedly decreased in the investigation period, despite the costs of production continuing to rise. As a result, the Union industry became loss making in the investigation period. Similar negative effects are seen in cash flow and return on investment.

(327) As already explained in recital (316) above, the Commission concluded that Chinese dumped imports were exerting price suppression on the Union industry throughout the period considered, and price depression in the investigation period.

(328) In conclusion, although the extraordinary circumstances in 2021 allowed the Union industry to perform well, in the shrinking market of 2022 and the investigation period, Chinese imports were increasing and gaining market share, supressing the Union industry’s prices, while its costs of production was increasing. This is particularly evident in the investigation period, when the prices of Chinese imports decreased by one quarter compared to 2022.

4.5.4.1.

Comments by the parties

(329) Several parties contested the existence of injury to the Union industry.

(330) China National Coatings Industry Association (CNCIA), an association representing exporting producers, claimed that there was no injury to the Union industry, citing certain segments of annual reports of several Union producers, notably Cinkarna, one of the non-sampled Union producers. CNCIA thus claimed that: (i) Cinkarna maintained maximum production levels according to its 2022 annual report, (ii) Kronos and Cinkarna increased their total value of sales in 2021 and 2022, (iii) Cinkarna, Tronox, and Venator reported increases in prices and/or revenue in 2022 compared to prior years, (iv) Cinkarna reported increasing profit and EBITDA in 2022 compared to 2021, and (v) Cinkarna planned to double its level of investments in 2023.

(331) The Commission noted on the outset that, while different producers might be performing better or worse to a varying degree, performance of one producer (Cinkarna), highlighted in points (i), (iv), and (v) above, is not necessarily indicative of the performance of the whole Union industry. This is precisely the reason why the Commission selects a representative sample of the Union producers, to draw conclusion on the microeconomic indicators on the basis of this sample. Moreover, the Commission’s analysis is focused solely on the economic indicators related to the product under investigation which requires a more granular analysis than simply looking at the general figures in the annual report of the Union producer. If an interested party would be of the opinion that the proposed sample would not have been representative for the Union industry as a whole because one of the companies included in the sample is performing much worse than the rest due to any specific circumstances, or vice versa, such party should express its opposition to the proposed sample of Union producers at the start of the investigation, which CNCIA did not do.

(332) Similarly, the Commission noted that the assessment under points (ii) and (iii) above are partial, taking into account only some of the injury indicators without considering them in the context of the total situation of the Union industry and the Union market, as the Commission does when reaching its conclusions in anti-dumping investigations. As demonstrated in Table 8 above, average unit sales prices of the Union industry did increase both in 2021 and in 2022. This increase in prices was, however, prompted by the need to maintain profitability in light of production costs rising in tandem. Furthermore, the Commission indeed found that the overall value of sales of the Union industry did increase in 2022 compared to 2021. This does not equate, however, to improved performance on the market as CNCIA suggested, since total sales volumes were decreasing. Examining in isolation the total value of sales in a given year is thus not informative.

(333) The Commission thus concluded that the elements highlighted by CNCIA, listed in recital (330) above, albeit factually true, do not invalidate the Commission’s conclusions on the situation of the Union industry as a whole.

(334) CNCIA further pointed out that in its decision on terminating the anti-dumping investigation on imports of tartaric acid originating in China

Commission Implementing Decision (EU) 2016/176 of 9 February 2016 terminating the anti-dumping proceeding concerning imports of tartaric acid originating in the People’s Republic of China and produced by Hangzhou Bioking Biochemical Engineering Co. Ltd (OJ L 33, 10.2.2016, p. 14).

, the Commission found no injury even though the Union industry’s market share in that case fell by 21 %, compared to only 2 percentage point drop in this case. As stated in recital (332) above, the Commission considers all the injury indicators holistically, in the context of the overall situation of the Union industry and the Union market, which are naturally different in each investigation, so final conclusions are made on the case-by-case basis. The Commission noted in that regard that CNCIA is focussing only on one element of the aforementioned investigation, while the decision to terminate was actually predicated on multiple factors, most notably the profitability of the Union producers

Ibid., recitals (140) and (141).

. In any case, the specific circumstances of that case have no bearing on the circumstances in the present investigation.

(335) CNCIA additionally claimed that the drop in production observed after 2021 can be attributed to the closure of plants described in recitals (294) and (295) above. As is evident from the macro-questionnaire submitted by the complainant, however, almost all of the Union producers’ production volumes decreased both in 2021 and 2022 year-on-year, and not just in those three plants. The Commission thus rejected this claim as unfounded.

(336) A user, PPG Industries Europe Sarl (PPG), further claimed that there is no price suppression, because Venator decided to increase prices globally, including in the Union, at the beginning of 2024 due to the need to start the process of recovering margins to sustainable levels, citing Venator’s press release from February 2024

Venator Press Release, Venator Announces Transformative Business Plan and Intends to Shut Down TiO2 Production in Duisburg, Germany, 1 February 2024, available at: https://www.venatorcorp.com/%7E/media/Files/V/Venator/press-releases/press-release-fv-eng.pdf (last visited on 29 May 2024).

. This is, however, not relevant in the context of the above analysis, as these claims by Venator were made after the investigation period, whereas all the above analysis and assessments are backward-looking, into the investigation period and the three prior years. Furthermore, no conclusion on price suppression can be drawn from the mere fact that one Union producer announced price increases. The Commission thus rejected this claim.

(337) On the basis of the above, the Commission concluded at this stage that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

1. CAUSATION

(338) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: imports from other third countries, export performance of the Union producers, and other factors, like global decline in consumption following the Covid-19 pandemic, forecasted improvement in market conditions, rising cost of production, and ban on the use of food-grade TiO2 in the Union.

5.1.

Effects of the dumped imports

(339) As explained in recital (271) above, Union consumption increased during the Covid-19 pandemic, whereby the lockdowns in the Union prompted people to renovate their homes, which resulted in increased demand for TiO2 in 2020 and especially in 2021. Such pronounced demand uptake was followed by an equally pronounced drop in demand observed in 2022 and the investigation period. While this drop was mainly driven by de-stocking following bulging demand in 2020 and 2021, it was further exacerbated by the general inflationary pressures which started in 2022 and likely the fears of market instability caused by Russian invasion of Ukraine.

(340) As shown in Table 3, Chinese imports maintained a strong presence in the Union within such market and increased in volume by 17 % from 2020 to the investigation period. Even in the shrinking market observed in 2022 and the investigation period, this resulted in a significant 50 % increase of Chinese market share from 2020 to the investigation period. This trend was only temporarily reversed in 2021: the volume of imports from China and their market share decreased that year by 5 % and 9 %, respectively, which can be attributed to the shipping crisis, reducing volumes of goods coming from China. Coupled with the peaking demand in 2021, this provided a brief respite to the Union industry allowing it to significantly increase its sales volumes and temporarily regain market share (see Table 6 above).

(341) However, as soon as the shipping crisis began to abate in 2022, Chinese imports started increasing again, increasing by 10 % in volume terms in 2022 and additional 12 % in the investigation period, to the detriment of Union producers, and of imports from other third countries (see Table 12 below). This is clearly reflected in market shares, where the increasing market share of Chinese imports coincides perfectly with the market share of Union producers and third country imports both going down both in 2022 and in the investigation period.

(342) Import prices from China also reflect the above market realities. Chinese landed prices remained below Union industry’s prices throughout the period considered, except in 2021 when the shipping crisis and cost of shipping from China to Europe reached their peak. Furthermore, Chinese landed prices were even below Union industry’s average cost of production both in 2020 and the investigation period, while in 2022 they were basically at the same level. Had the shipping costs not exploded in 2021 and 2022, Chinese landed prices could have easily remained below Union industry’s unit cost of production throughout the period considered.

(343) Even as they were, the Chinese prices clearly caused price suppression to Union industry prices throughout the period considered (see recital (284)) and price depression in the investigation period (see recital (286)).

(344) In addition, as already mentioned in recitals (282) and (283), the Commission established a weighted average undercutting margin of between 14 % and 15,3 % by the imports from the sampled exporting producers on the Union market in the investigation period, coinciding in time with the increasingly deteriorating situation of the Union industry.

(345) The analysis of the injury indicators in recitals (269) to (337) shows that the economic situation of the Union industry worsened especially towards the end of the period considered and this coincided with a significant increase of dumped imports from the country concerned, which were found to undercut the Union industry prices during the investigation period. Those imports, in any event, caused significant price suppression throughout the period considered and price depression in the investigation period, as the Union industry was not able to increase its prices in line with the increase of cost of production, and even had to decrease the prices below the cost of production in the investigation period.

(346) In view of the above considerations, the Commission provisionally established that there is a causal link between the material injury suffered by the Union industry and the dumped imports from China within the meaning of Article 3(6) of the basic Regulation. Such injury had both volume and price effects.

5.2.

Effects of other factors

(347) Several interested parties claimed that any injury to the Union industry during the period considered was not caused by the Chinese exports but by other factors. These include global decline in consumption following the Covid-19 pandemic, rising cost of production, and ban of the use of food-grade TiO2 in the Union.

(348) The Commission analysed if and to what extent those factors contributed to the injury.

5.2.1.

Cyclicality of the TiO2 market

(349) Several parties claimed that the drop in demand observed in 2022 and the investigation period was nothing more than the result of the usual downturn in the cyclical TiO2 market.

(350) First, to support this claim, one user provided the Commission with TZMI market intelligence data

TZMI report November 2021, available upon subscription.

from November 2021 with both historical trends and predictions for the future.

(351) The Commission noted in that regard that the market intelligence data mentioned in recital (350) concerns aggregate global consumption trends, so it might not accurately reflect the demand situation on the Union market specifically. This conclusion is reinforced by the fact that, as was already shown in the complaint, Union demand showed stable growth in 2020 and 2021, with an increase of 4 % year-on-year in each of the years. In addition, as the Table 2 above shows, the Union demand, while indeed dropping by 12 % in 2022, had a more pronounced drop of further 14 % in the investigation period. Neither of these developments are fully in line with TZMI global forecasts mentioned in recital (350).

(352) Second, two users, Munksjö and Felix, similarly claimed in their questionnaire replies that the TiO2 market is highly cyclical, and that the alleged injury to the Union industry is merely a result of the shrinking market in the investigation period. Munksjö submitted a data sheet from three different market intelligence sources (ICIS, EUWID, and TZMI), showing the evolution of TiO2 prices in the Union market for the last fifteen years, and claiming that this shows that the Union TiO2 market has gone through three cycles of shrinkage and expansion since 2008 until Q4 2023.

(353) The Commission noted that this data indeed shows that the TiO2 prices on the Union market had three peaks in the past fifteen years, in Q1 2012, Q2 2018, and Q2 of 2022. Each of those periods of higher prices was of slightly different length and was naturally followed by a decline in prices. The overall trend, however, is one of price increase.

(354) With all the above in mind, and having analysed all the information at its disposal, the Commission made the following conclusions on the situation on the Union TiO2 market.

(355) First, while there indeed might be global cyclicality in TiO2 demand, there is no evidence to suggest that it is unique to the TiO2 market and would merit special consideration as all markets regularly go through phases of contraction and expansion.

(356) Second, even if TZMI’s global demand predictions may have been generally accurate, these have shown not to be fully in line with actual developments observed in the Union market, at least for the period considered.

(357) Third, from all the data available to the Commission, one cannot draw a pattern showing with utter certainty when an upturn or a downturn will take place in the Union market and consequently conclude that contraction was bound to happen in 2023.

(358) The Commission thus concluded that, even if the global market trends broadly accurately predicted there would be an increase in Union demand in 2020 and 2021 and a later decrease, the Union TiO2 market was affected by specific and extraordinary circumstances during the period considered, which dictated the evolution of demand. As already mentioned in recital (271) above, the Commission concluded that the stay-at-home economy prompted by Covid-19 lockdowns led to an increase in demand for TiO2 in 2020, and especially 2021. Thus, even if there was going to be an increase in Union demand in 2020, the Covid-19 pandemic amplified it, and caused the demand to rise in 2021 as well. After such a big demand uptick, any drop in consumption that follows would naturally also be pronounced, while this drop (in 2022 and the investigation period) was further exacerbated by (a) the general inflationary pressures which started showing in 2022 and were present throughout the investigation period and likely by (b) the fears of market instabilities caused by Russian invasion of Ukraine in February 2022.

5.2.2.

Demand in the Union market

(359) On the other hand, some parties claimed that the deteriorating situation of the Union industry was due precisely to significantly decreased demand in the aftermath of Covid-19 pandemic and inflationary pressures of 2022 identified above.

(360) The Commission noted in that regard that the Union market did experience a pronounced decrease in demand, driven by both de-stocking after the high demand period during the Covid-19 pandemic and general inflationary pressures (see in recital (358)). Such shrinking market would have surely resulted in decrease of sales volumes of the Union industry, regardless of the existence of dumped imports from China.

(361) However, under normal conditions of competition, in such a shrinking market sales volumes of all the market participants would have all gone down more-less equally. Yet, in the present case, imports from all other third countries (excluding China) and the Union industry’s sales (as shown it tables 6 and 12 above) are almost all decreasing both in 2022 and the investigation period, while only the Chinese imports are increasing in those years (as shown in Table 3 above), pointing again to the conclusion that, just as the shipping prices started going down in 2022, Chinese producers were able to continue selling their product in the Union market at dumped prices, gaining market share to the detriment of other players.

(362) With regard to the decrease in consumption, CNCIA pointed out that in the Commission Decision of 27 June 2012 regarding imports of certain concentrated soy protein products originating in the PRC

Commission Decision of 27 June 2012 terminating the anti-dumping proceeding concerning imports of certain concentrated soy protein products originating in the People’s Republic of China (OJ L 168, 28.6.2012, p. 38).

, the Commission found an 8 % decrease in consumption as sufficient to break the causal link. They submitted that, considering the 14 percentage points drop in consumption in the investigation period compared to 2022, the Commission should now reach the same conclusion.

(363) The Commission pointed out in that regard that the referenced case was not terminated because a decrease in demand attenuated the causal link between established dumping and material injury, but rather because no material injury was found in the first place. The argument was therefore dismissed as void

Ibid., recitals (129)–(139).

.

(364) CNCIA furthermore claimed that the decrease in sales in 2022 can also be explained by the Union’s decision to ban in that year the use of TiO2 in food for human consumption (additive E171)

Commission Regulation (EU) 2022/63 of 14 January 2022 amending Annexes II and III to Regulation (EC) No 1333/2008 of the European Parliament and of the Council as regards the food additive titanium dioxide (E 171) (OJ L 11, 18.1.2022, p. 1).

, pointing to Tronox 2022 annual report that references this is as one cause for the decrease in sales.

(365) According to the information available to the Commission, specialty applications of TiO2 make up around 4 % of the total market, and applications in food for human consumption are an even smaller part of that share. The Commission thus concluded that any effect that this ban may have had on sales of the Union producers was negligible.

5.2.3.

Imports from third countries

(366) The volume of imports from other third countries developed over the period considered as follows:

Table 12

Imports from third countries

Source:

Eurostat and verified questionnaire of the sampled Union producers.

Country202020212022Investigation periodUnited KingdomVolume (tonnes)187211108085140773101465Index100587554Market share15 %9 %13 %11 %Average price2238254231043114Index100114139139MexicoVolume (tonnes)9374712021310234773036Index10012810978Market share8 %9 %9 %8 %Average price1504151418692388Index100101124159USAVolume (tonnes)63383994648121559948Index10015712895Market share5 %8 %7 %6 %Average price2146232129542925Index100108138136Other third countries (except China)Volume (tonnes)97372940455951665654Index100976167Market share8 %7 %5 %7 %Average price1935220128922781Index100114149144Total of all third countries except ChinaVolume (tonnes)441713421807383850300102Index100958768Market share36 %33 %34 %31 %Average price2002212127102827Index100106135141

(367) The Commission noted on the outset that, even though imports from United Kingdom represented the biggest share of imports into the Union from another third country (after China), according to the information available to the Commission, the only producers in the United Kingdom are two facilities owned by the Union industry. These imports are therefore not in competition with the Union industry on the Union market and also their price is higher than the Chinese import prices. Therefore, these imports do not contribute to the injury of the Union industry.

(368) Volume of imports from all other third countries has been declining throughout the period considered at an increasing rate: 5 % decrease in 2021, 8 % in 2022 and 9 % in the investigation period.

(369) Import volumes from notably USA and Mexico can be seen to be following the same trends as described for Union industry sales – an increase in imports in exceptionally high demand year of 2021, and then subsequently decreasing in 2022 and the investigation period. At the same time, both USA’s and Mexico’s market shares, after temporarily rising in 2021, began decreasing in 2022 and the investigation period. Imports from all other third countries also lost market share in the investigation period compared to 2022.

(370) Interested parties claimed that the reason for injury to Union industry were low priced Mexican imports, rather than Chinese imports. The Commission established above a weighted average undercutting margin of between 14 % and 15,3 % by the imports from the sampled exporting producers on the Union market in the investigation period. The Commission observed that the import price from Mexico were indeed low. However, they increased significantly during the investigation period in comparison with previous years and were higher than the import prices from China.

(371) By contrast, the Commission established that the landed prices of totality of Chinese imports decreased significantly, that is by 25 % between 2022 and the investigation period and undercut the Union industry’s prices by 18,2 % in the investigation period.

(372) The Commission then examined the significance of imports from China and Mexico in the total Union market. As tables 3 and 12 above show, the total volume of imports from China in the investigation period are three times larger than those from Mexico. Furthermore, Mexican imports lost market share in the investigation period, compared to 2022, as did the totality of imports from all other third countries (excluding China). In contrast, Chinese imports are the only ones that gained market share in the investigation period.

(373) The Commission therefore concluded that imports from Mexico as well as from any other third country did not attenuate the causal link established between the dumped Chinese imports and the injury suffered by the Union industry.

5.2.4.

Export performance of the Union industry

(374) The volume of exports of the sampled Union producers developed over the period considered as follows:

Table 13

Export performance of the Union producers

Source:

Macro questionnaire provided by the complainant for export volume and verified questionnaire replies of the sampled Union producers for average price

202020212022Investigation periodExport volume (tonnes)223194225958177595151869Index1001018068Average price (EUR/tonne)2371251433963092Index100106143130

(375) Similarly to production volumes and domestic sales, export volumes of the Union industry increased in 2021, although this increase was less pronounced than for domestic sales, before dropping significantly in 2022 and the investigation period. Export prices also followed the same trend as prices on the Union market, increasing in 2021 and 2022 before falling in the investigation period, but remaining significantly above 2021 levels.

(376) Union industry achieved higher prices on the export markets than in the Union market throughout the period considered. However, even despite this, the Union industry was not able to keep the export price of their product above their cost of production in the investigation period and had to decrease export prices in that year too.

(377) The complainant has claimed that unfair trade practices of the Chinese exporting producers in all markets are making it hard to compete also in the export markets and are the reason for such suboptimal export performance. Other interested parties retorted that there is no evidence to substantiate that claim.

(378) The complaint contained evidence of announcement of the closure of Chemours plant in Taiwan in 2023 and the complainant submitted additional evidence during the investigation, showing that two TiO2 producers in Japan, Sakai Chemicals and Ishihara Sangyo, announced plant closures in 2026 and 2027, respectively. All those facilities are in close geographical proximity to China, making it likely that Chinese exports have had undue influence on their performance in their domestic or reginal markets. Furthermore, relevant authorities in Brazil have initiated their own antidumping investigation against Chinese TiO2. The Commission thus found that it cannot be excluded that Chinese exports are hindering Union industry’s competitive position in other markets similarly to the Union market.

(379) Furthermore, the Commission has found that the profitability of export sales followed the development of profitability of the Union sales almost to the same percentage point throughout the period considered while export sales make around 25 % of total sales of the sampled Union producers.

(380) The Commission thus concluded that export performance was not the cause of injury to the Union industry.

5.2.5.

Rising cost of production

(381) Several parties have claimed that rising cost of production are the cause of injury to the Union industry.

(382) While Union industry’s costs of production were increasing in 2021, and particularly 2022 and the investigation period, Union industry was able to increase its prices in 2021 and 2022 to maintain profitability. It was only forced to decrease prices below their COP in the investigation period, when, in the shrinking market, the Chinese imports dropped in prices significantly while increasing in volume, thus gaining market shares in the Union.

(383) Interested parties again pointed to the case Soy Protein from China, where the increase in main raw material broke the causal link. The Commission pointed out however, that in the case at hand, the increase in cost of production was global due to global inflationary pressures and affected all the market players to a similar extent, as evidenced by the fact that prices of imports from all other third countries (except China) increased significantly in 2022 and even further in the investigation period. Notably, the prices of the main raw material, ilmenite ore, which represents around one third of the total cost of production, increased globally by around 80 % in 2022 compared to 2020 levels, and only slightly decreased in the investigation period.

(384) The Commission thus concluded that the rising costs of production did not contribute to the injury suffered by the Union industry in the investigation period.

5.2.6.

Market intelligence predicting recovery

(385) On 3 April 2024, AkzoNobel submitted further claims on lack of causality, relying on the report on the global situation of the TiO2 market, published in February 2024 by a market intelligence agency, TZMI. The report suggests that TiO2 market is recovering and predicts price increases in the Union market and increases in profitability of Union producers.

(386) The Commission noted in that regard that, even though the report suggests improvement in market conditions in Europe, the report still labels them as weak across several metrics it analyses. Furthermore, as concerns prices in Europe and predictions of improved profitability of Union producers in their domestic market, the report itself acknowledges that its projections on price levels that Union industry will be able to achieve are, at least partially, made under the assumption of the positive outcome of this investigation.

(387) Thus, even if this report would predict future performance of the Union industry with full accuracy, it is, essentially, making that prediction in the scenario of the restored level playing field on the Union market, and cannot be thus used as a counterargument for the Commission not to take a decision on which that prediction is itself, at least partially, based.

5.3.

Conclusion on causation

(388) As the parties rightly point out, several factors made the situation of the Union industry challenging. First, 2022 and the investigation period were marked by an exceptional decrease in demand for TiO2 on the Union market. Second, both of those years saw a significant increase in costs of energy on the Union market and cost of ilmenite increased globally. Third, import prices from Mexico were lower than Chines prices in the first three years of the period considered.

(389) None of this invalidates the fact however, that (i) as opposed to other third countries, imports from China were increasing in volume throughout the period considered (with a temporary slowdown due to exceptional circumstances in 2021, (ii) Chinese imports were coming into Europe at dumped prices, (iii) in the shrinking market of 2022 and the investigation period, Chinese imports were gaining market shares at the expense of the market share of the Union industry and of other third countries’ imports, and (iv) in the investigation period, when the prices of imports from all other countries were broadly staying the same as in 2022, the price of Chinese imports decreased dramatically, by one quarter of what they were in 2022, exerting significant price suppression and depression to the Union industry.

(390) In that vein, the Commission considered the arguments made by the parties on factory closures in the Union. In the complaint, the complainant claimed that the three TiO2 plants were closed in the Union due to pressure exerted by Chinese imports and that more closures could have been expected without exceptionally favourable conditions of Covid-19 pandemic. Several interested parties retorted against this, claiming that there was no evidence supporting this conclusion, and that the closures were due to other circumstances and not attributable to alleged dumped imports from China. The parties pointed to the public statements made by the companies, which attribute the curtailment of production or plant closures to unfavourable conditions on the market, such as reduced demand, rising costs of production, and generally poor economic conditions, while Venator’s (one of non-sampled Union producers) Scarlino plant specifically was facing issues in obtaining regulatory approvals.

(391) In a similar vein, the interested parties highlighted further statements from business reports of Union producers (Kronos, Police, Venator, Cinkarna), which recognised the decrease in demand and increase in cost of production as reasons for the challenging situation the Union industry finds itself in. Parties claimed that that this proves that imports from China cannot overall be held responsible for the injury suffered by the union industry.

(392) The Commission notes in that regard that, while Venator Scarlino plant was indeed prevented from operating at full capacity due to pending regulatory approvals, from the cited statements of both Kronos and Venator, it is apparent that the decisions on the level and continuation of production are being made in consideration of generally challenging market conditions. As the entire above analysis shows, these clearly include the dumped imports from China exerting pressure on the market, while a number of the cited reports themselves reference also the presence of cheap imports from China as one of the challenges

See, for example, Unaudited Business Report of Cinkarne Celje in the period January-September 2023, p. 16, available at: https://www.cinkarna.si/uploads/Objave/2023/Unaudited_Business_Report_Of_Cinkarne_Celje_for_The_Period_Jan_Sep_2023.pdf (last visited on 28 May 2024); Consolidated quarterly report of the Grupa Azoty Zakłady Chemiczne Police Group for Q1 2023, p. 56, available at: https://zchpolice.grupaazoty.com/upload/4/files/2023/Grupa_Azoty_Police_Skonsolidowany_Raport_za%20_I_kwartal_2023_clean.docx_f....pdf (last visited on 28 May 2024); Consolidated quarterly report of the Grupa Azoty Zakłady Chemiczne Police Group for Q3 2023, p. 58, available at: https://zchpolice.grupaazoty.com/upload/4/files/2023/IR/3Q/EN/Grupa_Azoty_Police_Skonsolidowany_Raport_za%20_III_kwartal_2023.docx_clean....pdf (last visited on 28 May 2024).

.

(393) The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The effect of shrinking demand, rising cost of production, and imports from other third countries, notably Mexico, on the Union industry’s negative developments in terms of sales volumes, prices, and profitability was only partial.

(394) On the basis of the above, the Commission concluded at this stage that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury. The injury consists mainly of loss of market share, price undercutting and suppression and falling profitability, return on investment and cash flow.

1. LEVEL OF MEASURES

(395) The complainant claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation in the complaint.

(396) Thus, in order to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation.

(397) Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin.

6.1.

Injury margin

(398) The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

(399) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

(400) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition.

(401) PPG and CNCIA both opposed the target profit proposed in the complaint (10,2 %) as too high. PPG claimed that none of the years during the investigation period were adequate to establish basic profit, due to exceptional economic situation in every year, recalling Commission’s own conclusions in the anti-dumping investigation on imports of certain polyethylene terephthalate originating in China

Commission Implementing Regulation (EU) 2023/2659 of 27 November 2023 imposing a provisional anti-dumping duty on imports of certain polyethylene terephthalate originating in People’s Republic of China (OJ L, 2023/2659, 28.11.2023, ELI: http://data.europa.eu/eli/reg_impl/2023/2659/oj), recital 275.

. They further claimed that, since the Union industry was able to sell at prices above their cost of production throughout the period considered, basic profit should be established as an average profit of all four years. CNCIA further claimed that the Commission should apply the same basic profit it applied in the anti-dumping investigation on imports of electrolytic manganese dioxides originating in China

Commission Implementing Regulation (EU) 2023/2120 of 12 October 2023 imposing a provisional anti-dumping duty on imports of electrolytic manganese dioxides originating in the People’s Republic of China (OJ L, 2023/2120, 13.10.2023, ELI: http://data.europa.eu/eli/reg_impl/2023/2120/oj).

, since EMD is an inorganic compound, just like TiO2.

(402) The Commission noted that the claim about Union producers’ sales prices may have been accurate for the period considered used in the complaint, but it was no longer relevant in the investigation period used by the Commission. As demonstrated above, Union industry’s sales prices were well below their cost of production in the investigation period. Any profitability which would be established taking account Union industry’s performance in that year would thus not reflect the profitability needed to recover full costs.

(403) As concerns the claim by CNCIA, just because EMD and TiO2 are both inorganic chemicals does not mean that their producers operate in similar markets or that their performance would be comparable and no evidence was provided to the Commission to suggest that they would be.

(404) The Commission noted that, during the period considered, the market share of Chinese imports was the lowest in 2021 and profitability and cash flow were the most positive in that year. However, the decrease in Chinese imports observed in that year was, as explained above, due to exceptional circumstances of the shipping crisis. Coupled with soaring demand prompted by Covid-19 lockdowns, the performance of the Union industry was exceptionally positive in this year. The Commission thus concluded that 2021 would not qualify as a representative year for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

(405) Furthermore, just like 2021, the year 2020 was also affected by the favourable circumstances of increased consumption due to the stay-at-home economy during Covid-19 lockdowns, even if to a lesser extent. On the basis of the information available at this stage, the Commission concluded that 2020 would not qualify as a representative year for providing a basic profit in accordance with Article 7(2c) of the basic Regulation either.

(406) Finally, the rise in imports from China and the sharp downturn of the Union industry which started in 2022 and continued in the investigation period would not qualify either of those years as representative for providing a basic profit in accordance with Article 7(2c) of the basic Regulation.

(407) In search of a period where normal conditions of competition would prevail, the Commission intended to examine the profitability achieved during the last ten years. The sampled Union producers provided data on the profitability for three years prior to the period considered. However, the Commission did not receive data on profitability relating only to the sales of TiO2 to unrelated customers in the Union from all three sampled Union producers for those years. It was therefore not possible to establish a profitability that would relate to the sales of the product under investigation to unrelated customers in the Union on the basis of the information currently available to the Commission.

(408) Since there is no evidence that a profitability higher than 6 % could be achieved under normal conditions of competition, the Commission set the basic profit at 6 %, in accordance with Article 7(2c) of the basic Regulation.

(409) Two Union producers provided evidence that their level of investments, research and development (R&D) and innovation during the period considered would have been higher under normal conditions of competition. The Commission verified this information based on investment plans and refused and postponed projects, demonstrating that that these investments were genuinely planned. Indeed, the claims of both Union producers were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R&D and innovation (IRI) expenses under normal conditions of competition, as provided by the Union industry and verified by the Commission, with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was 0,09 %.

(410) Such IRI differential of 0,09 % was added to the basic profit of 6 % mentioned in the recital (398), leading to a target profit of 6,09 %.

(411) In accordance with article 7(2d) of the basic Regulation, as a final step, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure pursuant to Article 11(2). Based on the evidence available, the Commission established an additional cost of 60,68 EUR/t.

(412) On this basis, the Commission calculated a non-injurious prices of [3400–3800] EUR/t and [3600–4000] EUR/t for the like product of the Union industry by adding the above-mentioned target profit margin (see recital (410) above) to the cost of production of the three Union producers during the investigation period and then adding the adjustments under Article 7(2d) on a type-by-type basis.

(413) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers in country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the three Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

(414) The injury elimination level for other cooperating companies and for all other companies is defined in the same manner as the dumping margin for these companies (see recitals (255)–(259)).

CountryCompanyDumping margin (%)Injury margin (%)The People’s Republic of ChinaLB group39,753,4Anhui Gold Star group14,453,0Other cooperating companies35,053,3All other companies39,753,4

(415) In the present case, the complainants claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation. Thus, in order to conduct the assessment on the appropriate level of measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry in the absence of distortions under Article 7(2a) of the basic Regulation. Then it examined whether the dumping margin of sampled exporting producers would be higher than their injury margin (see recitals (417)–(418) below).

6.2.

Examination of the margin adequate to remove the injury to the Union industry

(416) As explained in the Notice of Initiation, the complainant provided the Commission sufficient evidence that there are raw material distortions in the country concerned regarding the product under investigation. According to the evidence in the complaint, ilmenite, which accounts for 25 % of the cost of production of the product under investigation, is subject to captive mining in China. In addition, there is no VAT export refund for ilmenite in China. Both of those measures are listed in Article 7(2a), 2nd subparagraph of the basic Regulation as raw material distortions. Therefore, in accordance with Article 7(2a) of the basic Regulation, this investigation examined the alleged distortions to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury.

(417) However, as the margins adequate to remove injury are higher than the dumping margins, the Commission considered that, at this stage, it was not necessary to address this aspect.

(418) Following the above assessment, the Commission concluded that it is appropriate to determine the amount of provisional duties in accordance with Article 7(2) of the basic Regulation.

6.3.

Conclusion on the level of measures

(419) Following the above assessment, provisional anti-dumping duties should be set as below in accordance with Article 7(2) of the basic Regulation:

CompanyProvisional anti-dumping dutyLB group39,7 %Anhui Gold Star group14,4 %Other cooperating companies35,0 %All other companies39,7 %

1. UNION INTEREST

(420) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation.

(421) The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, unrelated importers, traders and users.

7.1.

Interest of the Union industry

(422) It is recalled that the Union industry consists of eleven producers, whose sales and profitability deteriorated significantly during the second half of the period considered, with a consequent negative impact on its market share, inventory level, investments, return on investment and cash flow. The Commission concluded at this stage that the Union industry suffered material injury caused by the dumped imports from the country concerned (see recital (337) above).

(423) If provisional measures are not imposed it is likely that, as a result of the price pressure from the dumped imports, the weak profitability and other financial indicators will force the Union industry to cease production of TiO2. However, following the imposition of anti-dumping provisional measures, it is expected that the sales volumes and prices of the Union industry on the Union market will rise, thus improving profitability and other financial indicators of this industry and preventing closure.

(424) It is therefore clear that provisional anti-dumping measures would be in the interests of the Union industry.

7.2.

Interest of unrelated importers and traders

(425) The unrelated importer mentioned in recital (10) eventually did not submit a questionnaire reply. The Commission received no questionnaire replies from importers and traders.

(426) On this basis, the Commission has provisionally concluded that the imposition of anti-dumping measures is not likely to have a negative effect on the situation of importers and traders in the Union.

7.3.

Interest of users

(427) In total 23 users and user associations participated in this investigation opposing the imposition of duties. Out of those, six users submitted questionnaire replies. The rest submitted comments.

(428) The main use of TiO2 is for the paints and coatings sector, representing above 60 % of the market, with architectural and industrial paints making for around 55 % of total demand, and industrial inks for around 5 %. The second largest segment of the market is plastics industry at around 25 %, then paper at 12 % and specialty applications at 4 %. Questionnaire replies were received from the users active in paint and coating, graphic inks, laminate paper, and plastics sectors. All six replies were verified on spot at the premises of the users.

7.3.1.

Users who submitted questionnaire replies

(429) The likely effects of the measures would be different on users, depending on the segment of the downstream market in which they operate. The Commission analysed separately the situation of users of TiO2 for more special applications like laminate paper and graphic inks (these users also submitted product scope claims) and users of TiO2 in its main application in paints, coatings, and plastics.

(430) First, out of the six users whose questionnaire replies the Commission verified, the laminate paper producers will be the most affected by potential measures. TiO2 represents around [25–35] % in their total cost of production, and they source around [10–40] % of their TiO2 from China. Both users also demonstrated that they were operating with low or negative profitability in the investigation period. The Commission estimated that if duties are imposed, and all other things remaining equal, their profitability would decrease by about [2–3] percentage points. As indicated in recital (52) above, however, these two users source a large majority of their TiO2 from other sources than China and the Commission thus concluded that the two users have sufficient alternative sources of supply.

(431) Second, Flint Group, a graphic inks producer, provided evidence demonstrating that products containing TiO2 generate only a limited part of its total turnover, while Chinese TiO2 represents only a partial share in the costs of production of those products. Due to the complexity of Flint’s corporate structure and the fact they produce a large number of ink formulas which contain some TiO2 in a number of plants in the Union, Flint could not provide accurate figures of the profitability of its TiO2-related business segment. Flint did demonstrate, however, a healthy profitability at the level of the total company in the investigation period.

(432) Based on the information available, the Commission concluded that, if anti-dumping duties were imposed, and all other things remaining equal, its profitability in the TiO2-related segment of the business would likely decrease by less than one percentage point,

The Commission calculated a proxy profitability for the TiO2-related business segment on the basis of the difference between Flint’s reported cost of production and revenue of the products containing TiO2. The Commission then simulated the increase in those costs of production by increasing the value of TiO2 sourced from China by the average anti-dumping margin and calculated a new proxy profit on that basis. The percentage difference of the two proxy profits was applied to the actual reported profitability in TiO2 segment of the business to estimate the impact of the duties on the profit.

given the low share of TiO2 in total turnover and cost of production. In addition, the company would remain profitable. The Commission could not determine the impact on the overall group profitability, but the effect would be even less pronounced. The Commission therefore concluded that Flint Group would not be significantly affected by the duties.

(433) Third, two other users, AkzoNobel and Sherwin-Williams Italy SRL (Sherwin-Williams), are two of the big paints and coating manufacturers. Paints and coating manufacturers are the biggest users of TiO2 in terms of volume. The impact of duties on the performance of this category of users would be much less pronounced. AkzoNobel filled in the questionnaire at the level of all entities present in the Union. Chinese TiO2 represents a negligible share in their total cost of production, and they were profitable in the investigation period. Sherwin-Williams provided the questionnaire reply for two entities which would be the most affected by the duties, and for the entire Union business. Chinese TiO2 represents only a minor share of total cost of production of these two entities combined. While profitability on their products containing TiO2 was low in the investigation period, both Sherwin-Williams entities demonstrated a healthy overall profitability. The total turnover of those two plants represents a small share of total Union turnover of Sherwin-Williams, which was profitable in the investigation period. The Commission thus concluded that both users, even if they would not be able to pass such cost increase to consumers, would be able to absorb the measures.

(434) Finally, Schulman Plastics, a large Union producer of plastics and related materials, provided the questionnaire reply for one of its plants, focused on production of MW, which will be the most affected by the duties out of the companies assessed in this section. This plant sources only a part of their TiO2 from China, but TiO2 represents a vast majority of its total cost of production. Its profitability in the MW business in the investigation period was healthy, while the total plant was performing even better that just the MW business. While its profitability will surely be the most affected of all users due to its cost structure, the Commission estimated that, even if it would not be able to pass such cost increase to its customers, it would still remain profitable.

(435) As show in this section, majority of the users that provided questionnaire replies would remain profitable even when taking into account the provisional anti-dumping duties. Moreover, other sources of supply were available to them. The Commission thus concluded that users will overall not be disproportionately adversely affected by the measures. Two users (Felix and Sherwin-Williams) were operating at a loss in the TiO2 segment of the business in the investigation period, together employing around 1000 people. However, for the reasons explained in recitals (430) and (433) above, the Commission did not consider that their situation will be seriously deteriorated by the imposition of measures. Conversely, if Union producers go out of business, this will eliminate a large part of supply for all the users.

7.3.2.

Other users

(436) Several users, user associations and CNCIA made written submissions, in which they claimed that imposition of duties would be against Union interest.

(437) First, the users claimed that there is a limited number of TiO2 producers in the Union and their capacities are not sufficient to fulfil the Union demand. Therefore, diverse sources of supply are needed and the presence of Chinese TiO2 imports on the market is necessary to allow for normal functioning of the market. One user claimed that downstream industries often face periods of extreme shortage of TiO2, where they were all put under allocation and could receive only limited amount of their demand for TiO2 from the Union producers. On top of that, it was claimed that Chinese imports will become an essential source of supply to the Union due to plant closures in the Union. They furthermore claimed that anti-dumping duties would eliminate supplies from China and make the users even more vulnerable to supply shortages experienced in 2021/2022.

(438) The Commission reminded in that regard that the purpose of anti-dumping duties is not to close off the Union market to imports from the country concerned, but rather to tackle unfair market practices and restore the level playing field, precisely allowing for the normal functioning of the market. Even if imports from China would disappear completely, however, there are multiple sources of supply from numerous other third countries, guaranteeing stability of supply. Furthermore, the Union producers demonstrated during the investigation that several investments aimed at capacity expansion are planned, pending normalisation in the market conditions. As concerns supply shortages in 2021 and 2022, the Commission noted that supply issues in those years were caused precisely by the length of supply chains, which were thus heavily disrupted by the shipping crisis. Consequently, it is the loss of capacity in the Union that would potentially worsen any similar supply shortages caused by the shocks to the global economy in the future. The Commission thus dismissed the above arguments as unfounded.

(439) Second, certain interested parties claimed that price increases of TiO2 would be bad for general inflation in the Union, and particularly damaging to the important construction sector, as it is a key downstream industry for producers of paints and varnishes. The users claimed that costs in construction sector remain on the rise, and it is hard hit by the economic crisis as it is.

(440) The Commission noted in that regard that no participants from the construction sector registered as interested parties in this investigation to object to the imposition of duties. Furthermore, no evidence was provided to quantify the effect the imposition of duties would have on the construction sector. The Commission thus dismissed this argument as unfounded.

(441) Third, several interested parties claimed that users and downstream industries cannot pass on further cost increases to their customers, without providing any supporting evidence. The Commission was thus unable to verify the veracity of this claim. It seems unlikely, however, that in a general inflationary environment, where prices are increasing across the board, users could not increase their prices to offset the minor impact that the anti-dumping duties might have on their cost of production. The Commission thus dismissed this claim.

(442) Fourth, a number of users have further claimed that they export most of their production (such as ceramics) and, as they rely heavily on TiO2 in their production, any increase in the cost of TiO2 resulting from this investigation will put them in a competitive disadvantage compared to their competitors operating outside the Union and increase the risk of offshoring downstream production.

(443) These users did not, however, provide supporting verifiable information (such as questionnaire replies) which would allow the Commission to determine the weight of Chinese TiO2 in their cost structure and accurately assess the impact on their performance in the Union. The Commission thus rejected this claim.

(444) Fifth, several other users, producers of masterbatches, claimed that competitors outside the Union will be able to get Chinese TiO2 at much lower cost and will be able to sell their products to the Union more competitively. Their product contains over [75–80] % TiO2, so they claimed that a 50 % price differential will render them totally uncompetitive and may force them to shut down facilities in the Union. Downstream industries will also become less competitive in domestic and export markets.

(445) The Commission noted in that regard that USA already has anti-dumping duties in place against Chinese TiO2, while Brazil has initiated an anti-dumping investigation of its own in April 2024. Other markets, therefore, are already taking measures to correct the distortive practices of Chinese dumped imports. The Commission also considered that, even if diversion of trade of TiO2 from China to other third markets would take place and would make downstream industries less competitive, this would still have a less negative effect on those industries than disappearance of the Union TiO2 producers, exposing downstream industries to supply shortages and worse supply shocks.

7.4.

Conclusion on Union interest

(446) On the basis of the above, the Commission concluded that there were no compelling reasons to conclude that it was not in the Union interest to impose provisional measures on imports of TiO2 originating in China at this stage of the investigation.

1. PROVISIONAL ANTI-DUMPING MEASURES

(447) On the basis of the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

(448) Provisional anti-dumping measures should be imposed on imports of TiO2 originating in country concerned, in accordance with Article 7(2) of the basic Regulation. The Commission concluded that the appropriate level to remove injury should be the dumping margin.

(449) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

CompanyProvisional anti-dumping dutyLB group39,7 %Anhui Gold Star group14,4 %Other cooperating companies35,0 %All other companies39,7 %

(450) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities.

(451) Imports of the product concerned 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.

(452) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to all other companies.

(453) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(454) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

1. REGISTRATION

(455) As mentioned in recital (3), the Commission made imports of the product concerned subject to registration. Registration took place with a view to possibly collecting duties retroactively under Article 10(4) of the basic Regulation.

(456) No decision on a possible retroactive application of anti-dumping measures can be taken at this stage of the proceeding.

1. INFORMATION AT PROVISIONAL STAGE

(457) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them (pre-disclosure).

(458) One of the sampled exporting producers submitted a comment referring to the method of establishing of the SG&A of a related trader. Contrary to what is suggested by the exporting producer and in line with the Commission standing practice, SG&A of a related trader does not include expenses such as Carriage and Duty, Warehousing and Insurance in relation to the dumping calculations for the said exporting producer. In addition, three users, Plastika Kritis SA, Felix, and Munksjö submitted comments on pre-disclosure. The Commission observed that none of those comments concerned the accuracy of the calculations and will therefore consider them together with all other submissions after the publication of the provisional measures.

1. FINAL PROVISIONS

(459) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

(460) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is imposed on imports of titanium dioxide, having the chemical formula TiO2, in all forms, as titanium oxides or in pigments and preparations based on titanium dioxide, containing a minimum of 80 % by weight of titanium dioxide calculated on the dry matter, having all types of particle sizes, classified under the Chemical Abstracts Service Registry Number (CAS RN) 12065-65-5 and 13463-67-7, currently falling under CN codes ex28230000 and 32061100 (TARIC codes 2823000010 and 2823000030) and originating in People’s Republic of China.

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

CompanyProvisional anti-dumping dutyTARIC additional code

LB group:

LB GROUP CO., LTD.

HENAN BILLIONS ADVANCED MATERIAL CO., LTD.

LB LUFENG TITANIUM INDUSTRY CO., LTD.

LB SICHUAN TITANIUM INDUSTRY CO., LTD.

LB XIANGYANG TITANIUM INDUSTRY CO., LTD.

39,7 %89CB

Anhui Gold Star group:

Anhui Gold Star Titanium Dioxide (Group) Co., Ltd.

ANHUI GOLD STAR TITANIUM DIOXIDE TRADING COMPANY LIMITED

14,4 %89CCOther cooperating companies listed in Annex35,0 %see AnnexAll other imports originating in the PRC39,7 %8999

1. The application of the individual duty rates specified for the companies mentioned in paragraph 2 shall be conditional upon presentation to the Member States’ customs authorities of a valid commercial invoice, on which shall appear a declaration dated and signed by an official of the entity issuing such invoice, identified by his/her name and function, drafted as follows: I, the undersigned, certify that the (volume) of (product concerned) sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in [country concerned]. I declare that the information provided in this invoice is complete and correct. If no such invoice is presented, the duty applicable to all other companies shall apply.

1. The release for free circulation in the Union of the product referred to in paragraph 1 shall be subject to the provision of a security deposit equivalent to the amount of the provisional duty.

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

Article 2

1. Interested parties shall submit their written comments on this Regulation to the Commission within 15 calendar days of the date of entry into force of this Regulation.

1. Interested parties wishing to request a hearing with the Commission shall do so within 5 calendar days of the date of entry into force of this Regulation.

1. Interested parties wishing to request a hearing with the Hearing Officer in trade proceedings are invited to do so within 5 calendar days of the date of entry into force of this Regulation. The Hearing Officer may examine requests submitted outside this time limit and may decide whether to accept to such requests if appropriate.

Article 3

1. Customs authorities are hereby directed to discontinue the registration of imports established in accordance with Article 1 of Implementing Regulation (EU) 2024/1617.

1. Data collected regarding products which entered the EU for consumption not more than 90 days prior to the date of the entry into force of this Regulation shall be kept until the entry into force of possible definitive measures, or the termination of this proceeding.

Article 4

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