Commission Implementing Regulation (EU) 2026/1854 of 27 July 2026 imposing a provisional anti-dumping duty on imports of sodium benzoate originating in the People’s Republic of China

• (144) The Commission noted that the distortions described in the updated Report are characteristic for the Chinese economy. The evidence available shows that the facts and features of the Chinese system as described above as well as in Part I of the updated Report apply throughout the country and across the sectors of the economy. The same holds true for the description of the factors of production as set out above and in Part II of the updated Report.

• (145) The Commission recalls that in order to produce the product concerned, certain inputs are needed. When the producers of the product concerned purchase/contract these inputs, the prices they pay (and which are recorded as their costs) are clearly exposed to the same systemic distortions mentioned before. For instance, suppliers of inputs employ labour that is subject to the distortions. They may borrow money that is subject to the distortions on the financial sector/capital allocation. In addition, they are subject to the planning system that applies across all levels of government and sectors. These distortions were described in detail above, in particular in recitals (68) - (148). The Commission pointed out that the regulatory setup underpinning those distortions is generally applicable, sodium benzoate producers being subject to those rules as any other economic operator in China. The distortions have therefore a direct bearing on the cost structure of the product concerned.

• (146) As a consequence, not only the domestic sales prices of the product concerned are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs (including raw materials, energy, land, financing, labour, etc.) are also affected because their price formation is affected by substantial government intervention, as described in Parts I and II of the updated Report.

• (147) Indeed, the government interventions described in relation to the allocation of capital, land, labour, energy and raw materials are present throughout China. This means, for instance, that an input that in itself was produced in China by combining a range of factors of production is exposed to significant distortions. The same applies for the input to the input and so forth.

• (148) No evidence or argument to the contrary has been adduced by the GOC or the exporting producers in the present investigation.

3.2.4.   Representative country

3.2.4.1.   General remarks

• (149) The choice of the representative country was based on the following criteria pursuant to Article 2(6a)(a) of the basic Regulation:

• — A level of economic development similar to the PRC. For this purpose, the Commission used countries with a gross national income per capita similar to the PRC on the basis of the database of the World Bank [^ntr104-L_202601854EN.000101-E0104],

• — Production of the product under investigation in that country,

• — Existence of relevant readily available data in the representative country,

• — Where there is more than one possible representative country, preference was given, where appropriate, to the country with an adequate level of social and environmental protection.

• (150) As explained in recital (28), the Commission issued two notes for the file on the sources for the determination of the normal value. These notes described the facts and evidence underlying the relevant criteria, and also addressed the comments received by the parties on these elements and on the relevant sources. In the Second Note, the Commission informed interested parties of its intention to consider Türkiye as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a)(a) of the basic Regulation would be confirmed.

3.2.4.2.   A level of economic development similar to the PRC

• (151) In the First Note on production factors, the Commission identified Argentina and Türkiye as countries with a similar level of economic development as the PRC according to the World Bank, i.e. they are all classified by the World Bank as ‘upper-middle income’ countries on a gross national income basis where production of the product under investigation was known to take place.

• (152) According to import statistics of raw materials, imports of the factors of production (‘FOPs’) necessary to produce sodium benzoate were found in Argentina and Türkiye, both of which met the criteria set out in 2(6a)(a), first indent of the basic Regulation. It is also considered likely that sodium benzoate is produced in those two countries.

• (153) THE Commission assessed the existence of market distortions by export and/or import restrictions on the product under investigation, as well as on the raw materials, namely those representing the most important items of cost of manufacturing used for producing the product under investigation.

• (154) With regard to Argentina, the Commission provisionally concluded in the First Note that, among the raw materials listed, the import prices from the rest of the world of benzoic acid – an intermediary product between toluene and the product concerned – are likely affected by the large volume of imports from China. Given the limited import volumes of toluene, caustic soda, cobalt salt and nitrogen, imports of those inputs were considered insufficient to serve as reliable benchmarks for the construction of the normal value. Furthermore, the Commission noted that in October 2022 Argentina imposed anti-dumping duties on sodium benzoate against China (2,4 %) and the Netherlands (32,3 %). The imposition of such measures may have affected the import price of raw materials used for manufacturing the product under investigation.

• (155) With regard to Türkiye, the Commission provisionally concluded in the First Note that, among the raw materials listed, the import prices of benzoic acid from the rest of the world were likely affected by the large volume of imports from China. Given the limited import volumes of cobalt salt, that input was considered insufficient to serve as reliable benchmarks for the construction of the normal value. The Commission therefore concluded that the price of imports of benzoic acid is likely to be distorted by the large volume imported from China.

• (156) In the First Note the Commission analysed whether prices of toluene, caustic soda, activated carbon and nitrogen could be also distorted by significant imports from Russia in the two potential representative countries. The Commission analysed the imported volumes of the raw materials in the two potential representative countries. No imports of toluene from Russia were found, and those of nitrogen and activated carbon were negligible.

• (157) No comments were received arguing against the two countries identified in the First Note regarding the level of economic development. However, the sampled exporting producer Wuhan Youji Industries Co., Ltd. expressed a preference for Türkiye as imports of toluene and caustic soda – the two main factors of production – were far greater in volume into Türkiye than into Argentina.

• (158) In the Second Note, the Commission informed interested parties of its intention to use Türkiye as an appropriate representative country in the present case if the existence of significant distortions pursuant to Article 2(6a) of the basic Regulation would be confirmed.

• (159) In the Second Note, the Commisison also informed interested parties that for the main factors of production, data on imports from China in the representative country would be excluded if the significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation are confirmed in the final disclosure, and that the imports of factors of production from countries listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and of the Council [^ntr105-L_202601854EN.000101-E0105] would also be excluded.

• (160) In response to the Second Note, no party objected to select Türkiye as representative country. However, several parties had claims and suggestions concerning the import data on FOPs as listed in that Note.

• (161) Wuhan Youji stated that the price of imports of benzoic acid into Türkiye was unrepresentative and possibly likely to be distorted by large volumes of imports originating in the PRC.

• (162) The Commission informed in the Second Note that it searched another benchmark price to represent an undistorted value for benzoic acid, following the conclusions in the First Note that the price of imports of benzoic acid is likely to be distorted by the large volume imported from China. However, after the on-the-spot verification (which took place after the Second Note was made available), the Commission concluded that benzoic acid was not sourced externally by any of the sampled exporting producers, as both were upstream integrated and thus purchased toluene instead. Thus, import prices of benzoic acid have not been used in the calculation of the normal value and benzoic acid is not listed in Table 1 below.

• (163) Wuhan Youji highlighted that the price listed in the Second Note for imports of nitrogen (as derived from Global Trade Atlas’ import statistics) did not use the same unit of measurement as Wuhan Youji had reported in its questionnaire reply. Wuhan Youji had reported its consumption of nitrogen in Nominal Cubic Meter, while the price level indicated in the Second Note indicated Cubic Meters as unit of measurement. The Commission confirmed the different units of measurement, which required a conversion when establishing the benchmark for Wuhan Youji.

• (164) Tianjin Dongda submitted that imports of toluene into Türkiye are subject to import licence requirements and thus give rise to market distortions.

• (165) The Commission found no evidence of import prices into Türkiye being distorted. Using the GTA database, it compared import prices of toluene into the rest of the world with the import prices into Türkiye and found that these prices were aligned.

• (166) Tianjin Dongda also considered that the import prices of natural gas into Türkiye, sourced from the Turkish Statistical Institute, showed large variances compared to Eurostat and had a preference for using the latter as a source for natural gas.

• (167) The Commission considered that data from the Turkish Statistical Institute is the appropriate and undistorted source for prices of natural gas in Türkiye and considered such source reliable for the purpose of establishing a normal value. Tianjin Dongda did not provide any concrete evidence capable of putting the reliability of such data into question.

• (168) The complainant claimed that the HS Code for crude benzene (a by-product when manufacturing the product concerned) in the Second Note was erroneous and that it should be HS Code 2707 10 rather than HS Code 2902 20 .

• (169) Following the on-spot verification, the Commission recognized the erroneous HS Code listed in the Second Note and accepted the claim. However, in the absence of any imports of crude benzene under HS Code 2707 10 into Türkiye shown from GTA extraction, the Commission used import prices from/to the rest of the world, excluding China, as the source for the benchmark price.

3.2.4.3.   Existence of readily available data in the representative country

• (170) In the First Note, the Commission could not identify any producer of the product under investigation in Argentina and Türkiye for which financial data were readily available. It therefore sought after companies producing benzoic acid, which is derived from toluene and used as main raw material of sodium benzoate. However, the Commission could not identify any producer of benzoic acid established in both countries for which financial data were readily available. The Commission thus considered companies active in the sector of manufacturing of organic chemicals, falling under NACE code 2014 [^ntr106-L_202601854EN.000101-E0106]. Two companies were identified in Argentina, however there were no financial data available for them. Thirty-five companies active in the sector of manufacturing of organic chemicals were identified in Türkiye, out of which eleven showed a reasonable level of profitability for a period partially overlapping with the investigation period.

• (171) In the Second Note, the Commission concluded that it found no readily available financial data in either of the two countries for any producer of sodium benzoate. However, it found financial data for thirty-eight producers within the same category of manufacture as sodium benzoate, i.e. NACE Code C2014 (‘Manufacture of other organic basic chemicals’) in Türkiye.

• (172) The Commission analysed the readily available financial data of the thirty-eight Turkish companies and found that twenty-six of them had incomplete data and one was in a loss-making situation. It therefore considered only the eleven companies with a positive profit margin. The financial data pertaining to these eleven producers were listed in Annex III to the Second Note [^ntr107-L_202601854EN.000101-E0107]. The Commission informed interested party in the Second Note that none of these eleven producers are active in the production of the product concerned.

• (173) The level of SG&A and Profit collected from the eleven profitable producers in Türkiye is laid down in recital (208) below.

• (174) Interested parties were invited to comment on the appropriateness of Türkiye as a representative country and the eleven companies listed in Annex III to the Second Note, as producers in the representative country as well as other elements of the Note.

• (175) In response to the Second Note, Wuhan Youji and Tianjin Dongda objected to the inclusion of certain of the eleven producers included in the selection listed, as according to their intelligence, the business activities of these companies were not related to the product under investigation.

• (176) However, in the absence of readily available financial data relating to producers of the product under investigation, the Commission had no choice but to use readily available financial data of business activities that, beyond the product under investigation, included business activities falling under NACE Code C2014.

Level of social and environmental protection

• (177) As explained above the Commission initially considered two potential representative countries: Argentina and Türkiye. As explained in recital (154), Argentina was found not to be an appropriate representative country in this case because of lack of readily available financial data and inadequate level of import of raw materials. It follows that Türkiye was the only appropriate representative country.

• (178) Having established that Türkiye was the only available appropriate representative country, based on all of the above elements, there was no need to carry out an assessment of the level of social and environmental protection in accordance with the last sentence of Article 2(6a)(a) first indent of the basic Regulation.

3.2.4.4.   Conclusion

• (179) In view of the above analysis, Türkiye met the criteria laid down in Article 2(6a)(a), first indent of the basic Regulation in order to be considered as an appropriate representative country.

3.2.5.   Sources used to establish undistorted costs

• (180) In the First Note, the Commission listed the factors of production such as raw materials, energy and labour used in the production of the product under investigation by the exporting producers and invited the interested parties to comment and propose publicly available information on undistorted values for each of the factors of production mentioned in that note.

• (181) The Commission did not receive any objection to the list of factors of production in its the First Note.

• (182) Subsequently, in the Second Note, the Commission stated that, to construct the normal value in accordance with Article 2(6a)(a) of the basic Regulation, it would use GTA (for import prices) into Türkiye to establish the undistorted cost of most of the factors of production, notably the raw materials.

3.2.5.1.   Factors of production

• (183) Considering all the information submitted by the interested parties and collected during the verification visits, the following factors of production and their sources have been identified in order to determine the normal value in accordance with Article 2(6a)(a) of the basic Regulation:

Table 1

Factors of production of product under investigation

Factor of Production	Commodity codes	Souce of data	Value (CNY)	Unit of measurement
Raw Materials	Raw Materials	Raw Materials	Raw Materials	Raw Materials
Toluene	2902 30	Global Trade Atlas (GTA)[^ntr108-L_202601854EN.000101-E0108]	7,00	Kg
Caustic soda, in aqueous solution	2815 12	Global Trade Atlas (GTA)	2,14	Kg
Nitrogen	2804 30	Global Trade Atlas (GTA)	0,41	Nm3
Activated carbon	3802 10	Global Trade Atlas (GTA)	16,37	Kg
Labour	Labour	Labour	Labour	Labour
Labour	[N/A]	Turkish Statistical Institute[^ntr109-L_202601854EN.000101-E0109]	89,64	Working hours
Energy	Energy	Energy	Energy	Energy
Electricity	[N/A]	Turkish Energy Market Regulatory Authority[^ntr110-L_202601854EN.000101-E0110]	0,66	kWh
Steam	[N/A]	Turkish Statistical Institute	501,61	ton
Natural Gas	[N/A]	Turkish Statistical Institute	4,63	m3
Water	[N/A]	Investment Office of the Presidency of the Republic of Türkiye[^ntr111-L_202601854EN.000101-E0111]	5,12	m3
By-product	By-product	By-product	By-product	By-product
Crude benzene	2707 10	Global Trade Atlas (GTA)	8,75	Kg

[^ntr109-L_202601854EN.000101-E0109]: http://www.turkstat.gov.tr => Press releases => select Producer Price Index.

[^ntr110-L_202601854EN.000101-E0110]: epdk.gov.tr => Press releases => select Electricity Market board decisions.

• (184) The Commission included a value for manufacturing overhead costs in order to cover costs not included in the factors of production referred to above. To establish this amount, the Commission used the verified data reported by the sampled exporting producers and added research and development costs for the investigation period as they were incurred and accounted by the exporting producers.

Raw materials

• (185) To establish the undistorted price of raw materials as delivered at the gate of a representative country producer, the Commission used as a basis the weighted average import price to the representative country as reported in the GTA to which import duties and transport costs were added.

• (186) An import price in the representative country was determined as a weighted average of unit prices of imports from all third countries excluding the PRC and countries which are not members of the WTO, listed in Annex 1 of Regulation (EU) 2015/755 of the European Parliament and the Council [^ntr112-L_202601854EN.000101-E0112].

• (187) The Commission decided to exclude imports from the PRC into the representative country as it concluded in Section 3.2.1 that it is not appropriate to use domestic prices and costs in the PRC due to the existence of significant distortions in accordance with Article 2(6a)(b) of the basic Regulation.

• (188) Given that there is no evidence showing that the same distortions do not equally affect products intended for export, the Commission considered that the same distortions affected export prices.

• (189) For a number of factors of production, the actual costs incurred by the sampled exporting producers represented a negligible share of total raw material costs in the investigation period. As the value used for these had no appreciable impact on the dumping margin calculations, regardless of the source used, the Commission decided to include those costs into consumables, as explained in recital (197).

• (190) The Commission expressed the transport cost incurred by the sampled exporting producers for the supply of raw materials as a percentage of the actual cost of such raw materials and then applied the same percentage to the undistorted cost of the same raw materials in order to obtain the undistorted transport cost. The Commission considered that, in the context of this investigation, the ratio between the exporting producers’ raw material and the reported transport costs could be reasonably used as an indication to estimate the undistorted transport costs of raw materials when delivered to the company’s factory.

Labour

• (191) Labour is a factor of production representing between 4 % to 7 % of total cost of production. The Commission used the statistics published by the Turkish Statistical Institute [^ntr113-L_202601854EN.000101-E0113] to determine the wages in Türkiye using the detailed information on wages in the producing sector for 2022, for the economic activity for NACE code 2014 – manufacturing of basic organic chemicals, in which the production of sodium benzoate falls, according to NACE Rev.2 classification [^ntr114-L_202601854EN.000101-E0114].

• (192) The average monthly value has been duly adjusted for inflation using the domestic producer price index as published by the Turkish Statistical Institute [^ntr115-L_202601854EN.000101-E0115] to adapt to the investigation period, going from 1 October 2024 to 30 September 2025. The hourly rate for the investigation period obtained after indexation amounts to 89,64 CNY/hour.

Electricity

• (193) The Commission intends to use the electricity price statistics published by the EMRA, Energy Market Regulatory Authority of Türkiye [^ntr116-L_202601854EN.000101-E0116] in its regular press releases. The Commission intends to use the average industrial electricity prices in the corresponding consumption band in kWh covering the investigation period. The Commission established the cost for electricity for the investigation period at 0,66 CNY/kWh.

Natural gas

• (194) The Commission used the average natural gas prices in m³ duly adjusted for inflation using the Producer Price Index published by the Turkish Statistical Institute [^ntr117-L_202601854EN.000101-E0117] to adapt to the investigation period. The price is adjusted for VAT of 18 %, as the quoted price is VAT included. The Commission established the price for natural gas for the investigation period at 4,63 CNY/m³.

Steam

• (195) The Commission established the benchmark for steam on the basis of the benchmark calculated for natural gas, considering that the unit for steam is GigaJoule (GJ). One GJ is converted into m³ gas based on the general accepted content of mmbtu (million metric British thermal units) in 1 GJ [^ntr118-L_202601854EN.000101-E0118], and the general accepted content of natural gas in 1 mmbtu [^ntr119-L_202601854EN.000101-E0119]. The consumption of steam by the exporting producer is expressed in tonnes, so the Commission converted the equivalent of 1 GJ into tonnes [^ntr120-L_202601854EN.000101-E0120]. The Commission also noted a clerical mistake in the conversion formula from GJ into tonnes which had resulted in an incorrect steam benchmark price in the Second FOP Note and it therefore put on file a revised version of the Annex V to the second FOP Note, correcting the mistake. By applying the benchmark for natural gas, the Commission established a benchmark of 501,61 CNY/ton for steam, as presented in Table 1 above.

Water

• (196) The Commission established the benchmark by using the average cost of water in Türkiye as published by the Presidency of the Republic of Türkiye Investment Office. This cost includes the cost of wastewater disposal.

Consumables

• (197) Due to the negligible weight in the total cost of production, some of the factors of production were considered consumables. These factors of production include the packaging materials.

• (198) The Commission calculated the percentage of the consumables in the total cost of production and applied this percentage to the recalculated cost of production based on benchmarks.

By-product

• (199) The Commission identified crude benzene as a by-product obtained from the production of the product under investigation which can be sold without further processing. The Commission used the import statistics from the GTA database as benchmark of crude benzene with HS code 2707 10 . The Commission established an undistorted import price of 8,75 CNY/Kg for benzene.

Manufacturing overhead costs, SG&A costs and profits

• (200) 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 ('SG&A') 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.

• (201) For establishing an undistorted and reasonable amount for SG&A costs and profit, the Commission relied on the financial data extracted from Orbis database for the year 2024 for the eleven Turkish producers as referred to in recital (173). SG&A costs expressed as a percentage of the Costs of Goods Sold (‘COGS’) and applied to the undistorted costs of production, amounted to 25,56 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 11,22 %.

• (202) The manufacturing overheads incurred by the cooperating exporting producers are 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.

• (203) The exporting producers’ respective costs for Research and Development, as provided in the questionnaire reply were added to the manufacturing overheads, as it was not explicit apparent from the published accounts of the eleven producers in Türkiye that those costs were had been included in their respective SG&A.

Calculation

• (204) 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.

• (205) 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 sampled exporting producers. These consumption rates were verified during the verification. The Commission multiplied the usage factors by the undistorted costs per unit observed in the representative country.

• (206) Once the undistorted manufacturing cost established, the Commission applied the manufacturing overheads, SG&A costs, profit and depreciation as noted in recital (201). They were determined on the basis of the financial statements of the companies as explained in recital (31).

• (207) Then the Commission added manufacturing overheads and depreciation, to the undistorted cost of manufacturing to arrive at the undistorted costs of production.

• (208) To the costs of production established as described in the previous recital, the Commission applied SG&A and profit from the eleven Turkish producers referred to in recital (172). SG&A expressed as a percentage of the Costs of Goods Sold (‘COGS’) and applied to the undistorted costs of production, amounted to 25,56 %. The profit expressed as a percentage of the COGS and applied to the undistorted costs of production, amounted to 11,22 %.

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

3.3.   Export price

• (210) The sampled exporting producers exported to the Union directly to independent customers in the Union. One of the exporting producers also exported via unrelated traders located in the PRC.

• (211) The export price for direct sales to independent customers in the Union 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.

3.4.   Comparison

• (212) 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.

• (213) 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 export prices 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.

3.4.1.   Adjustments made to the normal value

• (214) As explained in Section 3.2 above, 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.

• (215) The Commission found no reasons for making any allowances to the normal value, nor were such allowances claimed by any of the sampled exporting producers.

3.4.2.   Adjustments made to the export price

• (216) In order to net the export price back to the ex-works level of trade, adjustments were made on the account of, insurance, handling loading and ancillary expenses.

3.5.   Dumping margins

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

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

Company	Provisional dumping margin
Tianjin Dongda Chemical Group Co., Ltd	75,4  %
Wuhan Youji Industries Co., Ltd.	57,6  %

• (219) For the cooperating exporting producer 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.

• (220) On this basis, the provisional dumping margin of the cooperating exporting producer outside the sample is 63,8 %.

• (221) 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. The level of cooperation was calculated on the basis of the volume of exports of the cooperating exporting producers, sampled and non-sampled, to the Union expressed as proportion of the total imports from the PRC to the Union in the investigation period, that was established on the basis of import statistics from Eurostat for the CN codes listed in recital (18).

• (222) The level of cooperation in this case was low because the exports of the cooperating exporting producers constituted around 65 % of the total imports during the investigation period.

• (223) On this basis, and in order not to reward non-cooperation, the Commission found it appropriate to establish the dumping margin for non-cooperating exporting producer taking the weighted average of the fourteen individual transactions with the highest dumping margins, jointly representing 6,9 % of the export volumes.

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

Company	Provisional dumping margin
Tianjin Dongda Chemical Group Co., Ltd	75,4  %
Wuhan Youji Industries Co., Ltd.	57,6  %
Other cooperating company: Shandong TongTaiWeiRun Food Science Tech Co., Ltd.	63,8  %
All other imports originating in the People’s Republic of China	116,4  %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (225) The like product was manufactured by two producers in the Union during the investigation period. Only one producer came forward and fully cooperated, namely Lanxess Chemical BV. During the investigation period, this producer accounted for more than 60 % of total production in the Union. On this basis, it was concluded that Lanxess represented a major proportion of the total Union production of sodium benzoate. It is therefore considered that Lanxess constitutes the Union industry within the meaning of Articles 4(1) of the basic Regulation.

• (226) As the data relating to the injury assessment was derived from only one Union producer, the figures for the injury analysis are given in ranges for reasons of confidentiality. However, the indexes are based on actual data and not on the ranges.

• (227) The total Union production during the investigation period was established at 23 000 – 25 000 tonnes. The Commission established the figure on the basis of all the available information concerning the Union industry, such as the actual figure on the basis of a verification of the accounting records of the Union producer, Lanxess.

4.2.   Union consumption

• (228) The Commission established the Union consumption on the basis of (i) the verified sales of Lanxess; (ii) the estimated sales of the second Union producer; and (iii) the imports from the country concerned and from all other countries.

• (229) For the Union producer that did not come forward, estimates for Union consumption were done based on data extracted from market reports and by extrapolating ratios coming from data of the collaborating producer. As no other producers of sodium benzoate were identified within the Union industry, both sets of data were found to be representative to estimate the consumption at the level of the Union industry.

• (230) Union consumption developed as follows:

Table 2

Union consumption (tonnes)

	2022	2023	2024	Investigation period
Total Union consumption	[25 000  – 28 000 ]	[28 000  – 31 000 ]	[41 000  – 44 000 ]	[36 000  – 39 000 ]
Index	100	112	162	146
Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.

• (231) The Union consumption developed strongly from 2022 until 2024 and then decreased in the IP. Union consumption increased by 46 % over the period considered.

4.3.   Imports from the country concerned

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

• (232) As sodium benzoate was classified under ‘basket’ TARIC code 2916 31 00 90 until initiation of the current investigation, it was not possible to establish the volume of imports based on import statistics from Eurostat. Instead, import volume was based on data of specialised market intelligence providers of trade statistics to which the complainant has a subscription.

• (233) The source of the data concerning the Chinese imports could not be disclosed at the request of the data provider. The Commission cross-checked the data provided by the complainant with other available statistical sources (Eurostat and Surveillance) and with the sampling and questionnaire replies of the cooperating Chinese exporting producers and found it reliable.

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

Table 3

Import volume (tonnes) and market share

	2022	2023	2024	Investigation period
Volume of imports from the PRC (tonnes)	[7 800  – 9 500 ]	[12 400 – 13 700 ]	[22 500  – 24 800 ]	[20 000  – 22 100 ]
Index	100	159	290	258
Market share (%)	[30  - 33 ]	[43  - 46 ]	[55  - 58 ]	[53  - 56 ]
Index	100	142	179	177
Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.

• (235) Table 3 shows a steep increase in the volume of imports from China throughout 2022-2024 period, which was mirrored by an increase of the corresponding market share, to the detriment of the Union industry. While in 2023 and 2024 the biggest surge in imported quantities were recorded, the imports in the investigation period are still at a level significantly above 2022 levels (higher by 158 %), which demonstrate the expanded footprint reached by the imports from China (53 % - 56 % market share) when compared to the base year 2022 (30 % - 33 %).

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

• (236) The Commission established the prices of imports on the basis of the specialised market intelligence indicated in recital (233). Price undercutting of the imports was established on the basis of verified questionnaire replies of the sampled exporting producers in the PRC and of the cooperating Union Producer.

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

Table 4

Import prices (EUR/ tonne)

	2022	2023	2024	Investigation period
Price of imports from the PRC	[1 600 -1 800 ]	[1 200 -1 400 ]	[1 200 -1 400 ]	[1 100 -1 300 ]
Index	100	78	76	71
Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.	Source: Eurostat, Surveillance, Specialised market intelligence, Sampling and Questionnaire replies of cooperating exporting producers.

• (238) The import prices from the PRC continued to decrease throughout the period concerned, reaching a level representing 71 % of the average import prices in 2022.

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

• (1) the weighted average sales price per product of the Union producer and its related company charged to unrelated customers on the Union market, adjusted to an ex-works level; and

• (2) the corresponding weighted average prices per product of the imports from the sampled cooperating Chinese 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.

• (240) The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary. The result of the comparison was expressed as a percentage of the cooperating Union producer’s theoretical turnover during the investigation period. It showed a weighted average undercutting margin of between 43 % and 46 % by the imports from the country concerned on the Union market. Undercutting was found for 100 % of the imported volumes of the sampled companies.

4.5.   Economic situation of the Union industry

4.5.1.   General remarks

• (241) 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.

• (242) As explained in recitals (226) and (227), the analysis of injury indicators was established based on Lanxess data.

• (243) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic and the microeconomic indicators on the basis of data contained in the complaint and the questionnaire reply of Lanxess.

• (244) 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.

• (245) 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

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

Table 5

Production, production capacity and capacity utilisation

	2022	2023	2024	Investigation period
Production quantity (tonnes)	[24 000 -27 000 ]	[21 000 -24 000 ]	[25 000 -28 000 ]	[23 000 -25 000 ]
Index	100	89	104	94
Production capacity (tonnes)	[32 000 -35 000 ]	[31 000 -34 000 ]	[30 000 -33 000 ]	[29 000 -32 000 ]
Index	100	98	94	92
Capacity utilisation (%)	76	69	85	77
Index	100	91	111	102
Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant

• (247) The level of production was the most severely impacted in 2023 (decrease of 11 % as compared to previous year), when the import prices decreased the most from one year to the other (namely, by 22 % – see Table 4). The production levels continued further to vary around the 2022 levels (ending with a 6 % decrease during the investigation period versus 2022), due to the still low elasticity of the demand, justified by the small weight of sodium benzoate price in the total price of the final products it is incoporated. Nevertheless, the users’ preference for the sodium benzoate produced by the Union industry seems to be at its turning point, due to the continuous decrease in import prices, offering cheaper product alternatives (overall 29 % decrease during the period considered).

• (248) The capacity utilisation was at its lowest in 2023, due to the low production levels explained above. During the investigation period, it did not show meaningful variation when compared to 2022, as production capacity decreased by 8 %.

4.5.2.2.   Sales quantity and market share

• (249) The Union industry’s sales quantity and market share developed over the period considered as follows:

Table 6

Sales quantity and market share

	2022	2023	2024	Investigation period
Total Sales volume on the Union market (tonnes)	[12 000 -13 000 ]	[11 000 -12 000 ]	[12 000 -13 000 ]	[11 000 -12 000 ]
Index	100	93	104	91
Market share (%)	[45 -50 ]	[37 -41 ]	[29 -32 ]	[28 -31 ]
Index	100	83	64	63
Source: Questionnaire reply of the known Union producer, information provided by the complainant.	Source: Questionnaire reply of the known Union producer, information provided by the complainant.	Source: Questionnaire reply of the known Union producer, information provided by the complainant.	Source: Questionnaire reply of the known Union producer, information provided by the complainant.	Source: Questionnaire reply of the known Union producer, information provided by the complainant.

• (250) In 2023, the sales volume decreased by 7 % against 2022 levels, as the Union industry had to face increasing production costs, without being able to pass through this increase to the client prices, simultaneously with the increasing pressure from the decreasing import prices. The most acute decrease in sales volumes occurred, however, during the investigation period, when also the selling prices reached the lowest level of the period under concern. Additionally, the continuous increase in import quantities led to a deterioration of the market share of the Union industry by 37 %, when compared with 2022.

4.5.2.3.   Growth

• (251) Union market consumption increased throughout the period concerned (+46 % – see Table 2). The production and sales of the Union industry (Tables 5 and 6) decreased by 6 % and 9 %, respectively, in contrast with the significant increase in import volumes. This market dynamic led to a sharp deterioraton of the Union industry market share from 45 %-50 % in 2022 to 28 %-31 % in the investigation period. This evolution indicates satisfying the new increasing sodium benzoate demand via imports, rather than via local production, due to more attractive prices.

4.5.2.4.   Employment and productivity

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

Table 7

Employment and productivity

	2022	2023	2024	Investigation period
Number of employees	[49 -54 ]	[50 -55 ]	[53 -59 ]	[55 -60 ]
Index	100	103	110	113
Productivity (tonnes/employee)	[480 -530 ]	[420 -460 ]	[460 -510 ]	[400 -440 ]
Index	100	86	95	83
Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.	Source: Questionnaire reply of the cooperating Union producer, information provided by the complainant.

• (253) Despite the unfavourable situation of the Union industry, the number of employees increased throughout the period concerned, as the Union industry chose to retain their skilled workforce by internalising contractual employees.

• (254) This aspect, corroborated with the variations in production led to the deterioration of the productivity of the workforce, which over the period considered recorded a decrease of 17 %.

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

• (255) All dumping margins were significantly above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was not negligible, given the volume and prices of imports from the country concerned.

• (256) 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

• (257) The weighted average unit sales prices of the Union producer to unrelated customers in the Union developed over the period considered as follows:

Table 8

Sales prices in the Union

	2022	2023	2024	Investigation period
Average unit sales price on the Union market (EUR/tonne)	[2 400 -2 700 ]	[2 300 -2 500 ]	[2 300 -2 500 ]	[2 300 -2 500 ]
Index	100	95	96	94
Unit full cost of production (EUR/tonne)	[2 100 -2 300 ]	[2 500 -2 700 ]	[2 300 -2 500 ]	[2 300 -2 500 ]
Index	100	117	107	109
Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.

• (258) The prices decreased by 5 % in 2023 and varied around this level for the following period to record a 6 % decrease in the investigation period in relation to 2022. The decrease occurred despite the increasing costs, to counteract the significant decrease in the import prices and the considerable increase in the import quantities, in an attempt of the Union producer to keep its market share.

• (259) The unit production cost increased considerably in 2023 and maintained at levels above the one registered in 2022 for the last two years of the period concerned. Overall it recorded and increase of 9 % over the period considered. The increasing costs, in combination with the decreasing importing prices which no longer allowed charging higher prices in order to compensate for the higher costs, led to a deterioration of the profit margins of the Union producer (see Table 11).

4.5.3.2.   Labour costs

• (260) The average labour costs of the Union producer developed over the period considered as follows:

Table 9

Average labour costs per employee

	2022	2023	2024	Investigation period
Average labour costs per employee (EUR)	[112 000 -125 000 ]	[109 000 -122 000 ]	[115 000 -128 000 ]	[110 000 -122 000 ]
Index	100	97	103	98
Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.

• (261) The average employee costs varied slightly around the 2022 levels and recorded a 2 % decrease over the period considered. This reflects the company’s efforts of keeping the cost under control, when facing increasing pressure from market.

4.5.3.3.   Inventories

• (262) Stock levels of the Union producer developed over the period considered as follows:

Table 10

Stocks

	2022	2023	2024	Investigation period
Closing stock (tonnes)	[2 000 -2 300 ]	[1 300 -1 600 ]	[1 700 -2 000 ]	[2 900 -3 200 ]
Index	100	62	81	144
Closing stock as a percentage of production (%)	8,5	5,9	6,6	13,0
Index	100	70	78	154
Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.

• (263) The level of stocks increased significantly during the investigation period, mostly due to the discrepancy between the market realities (decreasing demand for higher priced Union industry product) and the level of production, as the users are not willing to pay a higher price for Union industry products. This was also reflected in the increase in the level of stocks as percentage of the production during the same period. This indicator suggests that the low elasticity of the demand to the price (due to low weight of the sodium benzoate price in the cost of the final products the product under investigation is incorporated) is not holding anymore.

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

• (264) Profitability, cash flow, investments and return on investments of the Union producer developed over the period considered as follows:

Table 11

Profitability, cash flow, investments and return on investments

	2022	2023	2024	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	[11 -13 ]	[-9 - -8 ]	[1 -2 ]	[-4 - -3 ]
Index	100	-68	11	-26
Cash flow (000 EUR)	[11 800 - 13 000 ]	[- 500 - - 400 ]	[2 500 - 2 800 ]	[-1 300 — 1 200 ]
Index	100	-4	21	-10
Investments (000 EUR)	[10 600 -11 700 ]	[3 500 -3 900 ]	[2 900 -3 200 ]	[3 600 -4 000 ]
Index	100	33	27	34
Return on investments (%)	[22 to 26 ]	[-14 to -12 ]	[-7 to -6 ]	[-13 to -11 ]
Index	100	-54	-27	-50
Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.

• (265) The Commission established the profitability of the Union producer 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 ex-works turnover of those sales.

• (266) The profitability was at a healthy level in 2022, but evolved towards significant losses in 2023, when the Union market faced the highest decrease in import prices for the product under investigation. The slightly positive profitability in 2024 was temporary, since, as a result of continuous decreasing import prices, the loss returned during the investigation period. In particular, it was due to the fact that Union producer had the highest quantity produced in the course of the whole period concerned (see recitals (246) to (248) above), thus the manufacturing overheads per unit produced, were lower than in 2023. It was also due a decrease in direct costs per unit produced.

• (267) The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow followed a similar trend to that of profitability, negatively accentuated during the investigation period due to the increase in stock levels.

• (268) The level of investments was closely linked to the registered profitability, decreasing significantly during the period concerned, as the Union producer focused on urgent needs, rather than on development requirements under ordinary course of business, due to the weakening capacity of the business to finance the latter.

• (269) The return on investments is the profit in percentage of the net book value of investments. Closely linked with the profitability numbers, it was at a healthy level in 2022, but took a sharp downturn in 2023 and kept negative in the period that followed.

• (270) The Union producer’s ability to raise capital was seriously impacted as its cash flow and profitability reached unsustainable levels during the investigation period, following a level of production not supported by the market demand realities.

4.6.   Conclusion on injury

• (271) All of the injury indicators except employment for the reasons mentioned in recital (253), showed a deterioration of the situation of the Union industry.

• (272) The volume of imports from the country concerned increased substantially by 158 %, concomitantly with a decrease of the import prices of 29 % over the period concerned, these developments being the main cause that triggered a deterioration of the Union industry situation. The development of the market shares supports the above findings. Specifically, the Chinese market share increased by 77 % in the period considered taking more than 50 % of the EU market, whereas the EU market share decreased by 37 %.

• (273) While the production levels did not vary significantly when compared with the beginning of the period considered, the closing stock as percentage of production demonstrated an increasing sensitivity of the sodium benzoate market demand to the price levels. Thus, the demand for the more expensive Union industry products decreased, while the demand for the cheaper Chinese imports increased, against a background of a significant increase in consumption over the period considered, from which the Union industry, with the exception of year 2024, did not benefit.

• (274) The fact that the production levels did not vary significantly over the period considered reflected the focus of the Union industry to maintain a reasonable capacity utilisation in an attempt to keep fixed costs under control. The market preference for lower prices and the increase in costs led to a loss making situation, which further impacted the cash flows and the Union industry capacity to finance investments.

• (275) Profitability, cash flow and the investments are the most impacted injury indicators by the increased Chinese import volumes in decreasing prices. The product business continuity is at a great risk, considering that the Union industry was forced to operate at a capacity under optimal levels.

• (276) The investigation showed the dumped imports from the countries concerned increased significantly in absolute terms and in terms of market share during the period considered. The Commission also found that the dumped imports undercut the Union industry prices and depressed and/or suppressed prices to a significant extent. The Commission provisionally concluded that the EU Industry suffered inury in terms of volumes, market share and prices.

• (277) 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.

5. CAUSATION

• (278) 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 third countries, export performance and increase in the cost of production.

5.1.   Effects of the dumped imports

• (279) During the period considered, the Union industry lost significant market share on the Union market. The increase of consumption mainly benefitted Chinese imports (at levels 2,6 times higher in the investigation period than in 2022), which forced the Union industry to operate under optimal levels of its capacity utilisation.

• (280) At the same time, Chinese import prices undercut the Union industry prices by more than 44 % during the investigation period. The Chinese import prices supressed and/or depressed the prices of the Union producer, adversely affecting its financial indicators, despite Union producer’s efforts to absorb the increase of the manufacturing costs. This led to unsustainable negative margins for the last 3 years analysed.

• (281) In order to remain competitive and maintain a certain level of production, the Union industry was forced to lower its sales prices to untenable levels, in view of the increase in the cost of production.

• (282) Therefore, the Commission concluded that a significant increase in dumped imports from China at prices that were causing significant negative effects on Union industry prices, caused material injury to the Union producers.

5.2.   Effects of other factors

5.2.1.   Imports from third countries

• (283) During the investigation period, the quantity of imports from other third countries analysed at TARIC basket code level (2916 31 00 90) were estimated as being very marginal the biggest four third-country exporters (UK, USA, India and Israel) represented each under 2 %. Consequently, these imports were not analysed further, as they were neither relevant, nor they would impact the analysis or the causation conclusions.

5.2.2.   Export performance of the Union producer

• (284) The volume of exports of the Union producer developed over the period considered as follows:

Table 12

Export performance of the Union producer

	2022	2023	2024	Investigation period
Export volume (tonnes)	[12 000 -14 000 ]	[10 000 -11 000 ]	[13 000 -15 000 ]	[11 000 -13 000 ]
Index	100	81	107	94
Average export price (EUR/tonne)	[2 600 -2 800 ]	[2 200 -2 400 ]	[2 100 -2 300 ]	[2 100 -2 300 ]
Index	100	87	81	81
Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.	Source: Questionnaire reply of the cooperating Union producer.

• (285) The export volumes decreased by 6 % over the period considered. The export price followed a downward trend, due to intense competition from Chinese exporters on the Union industry’s export markets.The export volume represented 52 % of total Union industry’s sales of the like product in the investigation period. The exports sales, recorded decreasing prices, which were made to satisfy, and not to lose, the global demand of multinational clients.

• (286) In view of the higher volume of sales on the third country markets, declining export performance of the Union producer might have contributed to injury, but did not attenuanate the genuine and substantial causal link between the Chinese dumped imports and the material injury found. It rather demonstrated that the Union industry was confronted with dumping pressure for the product under investigation not only on the domestic market, but on other markets as well.

5.2.3.   Increase in cost of production

• (287) There has been an increase in the cost of production by 9 % in the period considered because of an increase in some direct costs such energy and labour costs per unit and an increase of the allocated fixed costs due to decreased production volumes.

• (288) The Commission considers that the increases in costs have a limited impact on causation, because the Union producer could have passed on the cost increases to its clients by increasing the prices sufficiently to non-injurious levels if there was not the pressure exerted by the Chinese imports in such great volumes and low prices.

5.3.   Conclusion on causation

• (289) In light of the above considerations, the Commission provisionally established a genuine and substantial causal link between the material injury suffered by the Union industry and the dumped imports from China. As a result of the significant increase of dumped imports from China, the Union industry was precluded from setting prices and production volumes at sustainable levels, which resulted in a strong deterioration of its economic situation.

• (290) The timing and scale of these negative developments showed a clear causal link between the dumped imports and the material injury suffered by the Union industry.

• (291) The Commission examined alternative factors that could have contributed to the injury suffered by the Union industry. These included imports from other third countries, the export performance of the Union industry and increase in the cost of production. However, none of these were found to weaken the genuine and substantial causal link between dumped Chinese imports and the material injury suffered by the Union industry.

• (292) 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 genuine and substantial causal link between the dumped imports and the material injury. The injury consists notably of reduced market share, profitability, productivity, return on investments, cash flows and capacity utilisation.

6. LEVEL OF MEASURES

• (293) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

6.1.   Injury margin

• (294) 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.

• (295) 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 under investigation, 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 %.

• (296) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. The basic profit was set at [11 % - 13 %] reflecting the historical profitability of the Union industry in 2022, a year before the surge of imports in the Union market.

• (297) The Union producer provided evidence that its 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 and concluded that the provided internal documentation and communications showed that the company did not carry out certain investments due to the situation on the Union market. 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 EU Industry and verified by the Commission with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was [3,7-4,5] %.

• (298) Such percentage was added to the basic profit mentioned in recital (296), leading to a target profit of [14,7-16,8] % for the like product, produced by the Union producer.

• (299) 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). The Union producer provided evidence of having incurred environmental compliance costs. Based on the evidence available, which was supported by the company’s reporting tools and forecasts, the Commission established an additional cost of [4,6-5,3] EUR/tonne, which was reflected in the non-injurious price for the product produced by the Union producer.

• (300) On this basis, the Commission calculated a non-injurious price of [2 710-3 130] EUR/tonne for the like product of the Union industry by applying the target profit margin mentioned in recital (298) to the cost of production of the Union producer during the investigation period and then adding the adjustments under Article 7(2d) on a type-by-type basis.

• (301) 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 China, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the Union producer 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.