Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Seventh Chamber)

24 September 2019 (*)

(Dumping — Imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406.4 mm, originating in China — Definitive anti-dumping duty — Injury — Price undercutting — Causal link)

In Case T‑500/17,

Hubei Xinyegang Special Tube Co. Ltd, established in Huangshi (China), represented by E. Vermulst and J. Cornelis, lawyers,

applicant,

v

European Commission, represented by T. Maxian Rusche and N. Kuplewatzky, acting as Agents,

defendant,

supported by

ArcelorMittal Tubular Products Roman SA, established in Roman (Romania),

Válcovny trub Chomutov a.s., established in Chomutov (Czech Republic),

and

Vallourec Deutschland GmbH, established in Düsseldorf (Germany),

represented by G. Berrisch, lawyer, and B. Byrne, Solicitor,

interveners,

APPLICATION under Article 263 TFEU for annulment of Commission Implementing Regulation (EU) 2017/804 of 11 May 2017 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406.4 mm, originating in the People’s Republic of China (OJ 2017 L 121, p. 3), in so far as it concerns the applicant,

THE GENERAL COURT (Seventh Chamber),

composed of V. Tomljenović, President, E. Bieliūnas and A. Marcoulli (Rapporteur), Judges,

Registrar: S. Bukšek Tomac, Administrator,

having regard to the written part of the procedure and further to the hearing on 27 March 2019,

gives the following

Judgment

 Background to the dispute

1        On 13 February 2016, following a complaint lodged by the Defence Committee of the Seamless Steel Tubes Industry of the European Union, the European Commission published a notice initiating an anti-dumping proceeding concerning imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406.4 mm originating in the People’s Republic of China (OJ 2016 C 58, p. 30).

2        The investigation of dumping and related injury covered the period from 1 January to 31 December 2015 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2012 to the end of the investigation period (‘the period considered’).

3        The applicant, Hubei Xinyegang Special Tube Co. Ltd, established in China, which produces and exports certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406.4 mm, originating in China (‘the product under consideration’) to the European Union, was selected for inclusion in the sample of the exporting producers.

4        On 11 November 2016, the Commission adopted Regulation (EU) 2016/1977 imposing a provisional anti-dumping duty on imports of the product under consideration (OJ 2016 L 305, p. 1, ‘the provisional regulation’).

5        On 11 May 2017, the Commission adopted Implementing Regulation (EU) 2017/804 imposing a definitive anti-dumping duty on imports of the product under consideration (OJ 2017 L 121, p. 3; ‘the contested regulation’).

6        The contested regulation is based inter alia on Article 9(4) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ 2016 L 176, p. 21; ‘the basic regulation’).

7        Article 1 of the contested regulation provides for the imposition of a definitive anti-dumping duty on imports of the product under consideration. The anti-dumping duty in the case of the products produced by the applicant is 54.9%.

 Procedure and forms of order sought

8        By application lodged at the Court Registry on 7 August 2017, the applicant brought the present action.

9        On 30 October 2017, the Commission lodged the defence.

10      By document lodged at the Court Registry on 14 November 2017, ArcelorMittal Tubular Products Roman SA, Válcovny trub Chomutov a.s. and Vallourec Deutschland GmbH, members of the Defence Committee of the seamless steel tubes industry of the European Union, requested leave to intervene in support of the form of order sought by the Commission.

11      On 16 December 2017, the applicant lodged the reply.

12      By order of 24 January 2018, the President of the Seventh Chamber of the General Court granted ArcelorMittal Tubular Products Roman, Válcovny trub Chomutov and Vallourec Deutschland leave to intervene in support of the form of order sought by the Commission.

13      On 30 January 2018, the Commission lodged the rejoinder.

14      On 22 March 2018, the interveners lodged the statement in intervention.

15      On 10 April 2018, the applicant and the Commission submitted their observations on the statement in intervention.

16      On a proposal from the Judge-Rapporteur, the Court (Seventh Chamber) decided to open the oral part of the procedure and, by way of measures of organisation of procedure, as provided for in Article 89 of its Rules of Procedure, put written questions to the Commission. The Commission gave answers to those questions within the prescribed period.

17      The parties presented oral argument and answered the questions put to them by the Court at the hearing on 27 March 2019.

18      At the hearing, the Commission was allowed a period of time to enable it to provide certain information. The applicant was requested to submit written observations in that regard, which it did within the prescribed period.

19      The oral part of the procedure was closed on 17 May 2019.

20      The applicant claims that the Court should:

–        annul the contested regulation in so far as the applicant is concerned;

–        order the Commission to pay the costs.

21      The Commission and the interveners contend that the Court should:

–        dismiss the application;

–        order the applicant to pay the costs.

 Law

22      The applicant puts forward four pleas in law in support of its action.

23      The first plea alleges infringement of Article 3(2) and (3) of the basic regulation and Articles 3.1 and 3.2 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103, ‘the Anti-dumping Agreement’), which is contained in Annex 1A to the Agreement establishing the World Trade Organisation (WTO) (OJ 1994 L 336, p. 3). The second plea alleges infringement of Article 3(6) of the basic regulation and Article 3.5 of the Anti-dumping Agreement. The third plea alleges a manifest error of assessment in the establishment of a causal link, for the purposes of Article 3(6) and (7) of the basic regulation. The fourth plea alleges a breach of the ‘obligation of due diligence and proper administration’.

 First plea: infringement of Article 3(2) and (3) of the basic regulation and Articles 3.1 and 3.2 of the Anti-dumping Agreement

24      The applicant notes that, in the contested regulation, the Commission found that price undercutting margins ranged from 15.2 to 29.1%. Those margins were calculated by comparing the weighted average sales prices of Union producers with those of imports by product type and, more specifically, by product control number (PCN). That comparison was done only for the year 2015, the final year of the period considered. The Commission’s method did not, however, make it possible to establish what the effect was of imports in one market segment on products in other segments, or on products of Union producers for which there were no Chinese imports. According to the applicant, 40% of the sales made by the sampled Union producers and 70% of the total sales of the Union industry were not taken into consideration for the determination of price undercutting. Recalling the relevant legal provisions and referring to the judgment of 5 April 2017, Changshu City Standard Parts Factory and Ningbo Jinding Fastener v Council (C‑376/15 P and C‑377/15 P, EU:C:2017:269), and the report of the WTO Appellate Body in the dispute ‘China — Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes (‘HP-SSST’) from Japan’ (WT/DS 454/AB/R and WT/DS 460/AB/R, report of 14 October 2015) (‘the Appellate Body’s HP-SSST report’), the applicant claims that the method adopted by the Commission is unlawful. Besides the fact that the Commission’s method related only to 2015 and did not enable price undercutting to be established for the Union industry’s product as a whole, it did not make it possible to conduct a dynamic analysis of prices or a full assessment of the effects of differences between product types. The applicant notes, in particular, that it was appropriate, if not necessary, for the Commission to conduct an analysis of price undercutting by market segment. The Commission did not examine the effect of the various factors in the present case on the relationship between the prices of Chinese imports and the prices of products sold by the Union producers.

25      The applicant adds that the Commission, having conducted a comparison by type of product, should have determined whether there was price undercutting on products sold by the Union industry for which there were no matching Chinese imports. This is particularly important since different market segments exist with substantial price differences. The products produced or sold by the Union industry as a whole must therefore be considered. Moreover, the applicant states that there is a difference between determining the injury and calculating the injury margin.

26      With regard to the arguments put forward by the interveners, the applicant states that, even though the facts underlying the present case and those that gave rise to the Appellate Body’s HP-SSST report are different, that report contains findings and statements that have general application. The interveners’ attempt at limiting the relevance of the WTO Appellate Body’s findings in that case cannot therefore succeed. Moreover, contrary to what the interveners state, the applicant (and the Chinese producers’ association) requested that the existence of separate market segments should be taken into consideration in order to determine the existence of injury and of a causal link.

27      The Commission contends that the basic regulation requires only that a link should be established between the dumped imports and the prices of the like product in the European Union. In that regard, those differences were taken into account using PCN-by-PCN analysis. That is the most appropriate method to reflect not only market segments, but also individual PCN characteristics. It also made it possible to take into account differences between market segments and to make a dynamic comparison. Neither the basic regulation nor the case-law of the European Union Courts, or the WTO’s decision-making practice, require assessment of the impact of imports in one particular segment on Union sales prices of products in other market segments, as advocated by the applicant. In addition, the Chinese imports were in the three segments referred to by the applicant in its pleadings, and undercutting had been found in each segment. The injury calculation cannot include product types that are sold by Union producers, but not by Chinese producers. Therefore, only comparable product types can be compared, that is to say, products that share the same PCNs. It cannot be assumed moreover that certain Chinese product types would injure Union industry product types in a different market segment. Furthermore, the method suggested by the applicant would have led to a less favourable outcome for the latter since the Union industry’s product range included many high-end product types. In any event, determination of price undercutting for 60% of the sales made by the sampled Union producers is representative. Lastly, as regards the fact that the Commission’s analysis related only to the year 2015, the basic regulation requires only that the determination of dumping, and thus of injury, be performed for the investigation period. In any case, since the price undercutting analysis involves verification of concrete sales transactions, it can only be carried out for the investigation period. As regards the judgment of 5 April 2017, Changshu City Standard Parts Factory and Ningbo Jinding Fastener v Council (C‑376/15 P and C‑377/15 P, EU:C:2017:269), referred to by the applicant, it concerns a different question. There is no scope for application by analogy in the present case.

28      The Commission adds that, according to the applicant’s arguments, it was required to make a comparison between the prices of an imported product type and the prices of another product type sold by the Union industry. Such an approach is not viable since it would mean that the injury margin calculation would contain a comparison that is not performed for the dumping margin calculation. It is unclear to the Commission, moreover, how the applicant would have benefited from that type of comparison. As for the Appellate Body’s HP-SSST report, referred to by the applicant, it does not support the latter’s position. Also, the approach advocated by the applicant does not square with the very purpose of the undercutting calculation, which is to quantify the price competition between imports and sales of the Union industry. As regards the dynamic comparison of prices, pointed to by the applicant, the Commission states that its analysis took place as part of an overall investigation of the effect of imports.

29      The interveners give more details about the Appellate Body’s HP-SSST report. In particular, the WTO Appellate Body did not state that the authorities should carry out a price undercutting analysis by category or on a PCN-by-PCN basis for the entire period considered. Such a request, in respect of the period considered, would have entailed a very significant burden for the undertakings involved in the proceeding. In any event, it was demonstrated in the contested regulation that there had been massive price undercutting over the entire period considered. Moreover, the Commission established a correlation between the prices of Chinese imports and the prices of the Union industry. The applicant’s arguments concerning the ‘lack of a dynamic assessment’ are therefore unfounded. Furthermore, the WTO Appellate Body did not state that the authorities were to establish market shares and prices on a per segment basis. It merely stated that, given the evidence on the file, the authorities should have taken it into account. However, the evidence in the present case is fundamentally different. In particular, the Union producers and the sampled Chinese exporting producers had sales in the three segments concerned. Lastly, neither the applicant nor the Chinese producers’ association requested the Commission to conduct the assessment produced in the context of the present action. Nor did they refer in that regard to the Appellate Body’s HP-SSST report.

30      First, it should be borne in mind that, under Article 3(2) of the basic regulation, a determination of injury is to be based on positive evidence and is to involve an objective examination, inter alia, of the volume of the dumped imports and the effect of the dumped imports on prices in the Union market for like products. Moreover, Article 3(3) of the basic regulation provides inter alia that, with regard to the effect of the dumped imports on prices, consideration is to be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree. Articles 3.1 and 3.2 of the Anti-dumping Agreement contain provisions which are substantially the same.

31      Second, Article 1(1) of the basic regulation provides that ‘an anti-dumping duty may be imposed on any dumped product whose release for free circulation in the Union causes injury’. That provision, which forms part of Article 1, entitled ‘Principles’, lays down the essential rule for imposing anti-dumping duties, under which it is not sufficient that the imported goods are dumped, as it is also necessary that their release for free circulation should cause injury. It is precisely for determining whether there has been injury that the basic regulation provides, in Article 3(2) and (3), that an objective examination of the effect that imports have on the prices of like products on the Union market must be made and that, to that end, consideration is to be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which would otherwise have occurred, to a significant degree (judgment of 30 November 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council and Commission, T‑107/08, EU:T:2011:704, paragraph 58).

32      In that context, it should be pointed out that determining the effect of dumped imports on prices in the Union market for like products, under Article 3(2) of the basic regulation, is an exercise different from that intended to establish the existence of a causal link between the dumped imports and the injury suffered by the Union industry, referred to in Article 3(6) of the basic regulation. The determination provided for in Article 3(2) of the basic regulation is intended to establish the effect of the dumped imports on prices in the Union market for like products. That determination involves an examination of the relationship between the prices of the dumped imports and those of like products of the Union industry. The determination provided for in Article 3(6) of the basic regulation is intended, for its part, to establish the link between the dumped imports and the injury, considered as a whole, of the Union industry. However, even though those two determinations differ in their purpose, the evidence of the existence of injury, including the evidence relating to the effect of imports on prices in the Union market for like products, is taken into account in the Commission’s analysis of the causal link, which is referred to in Article 3(6) of the basic regulation. Thus, there is a relationship between the determination of price undercutting and, more generally, of the effect of the dumped imports on prices in the Union market for like products, under Article 3(2) and (3) of the basic regulation, and the establishment of a causal link, under Article 3(6) of the basic regulation (see, to that effect, judgment of 30 November 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council and Commission, T‑107/08, EU:T:2011:704, paragraph 59).

33      Third, it must be noted that Article 3 of the basic regulation, relating to the determination of injury, does not lay down any particular method with regard to the determination of price undercutting. Moreover, the analysis of price undercutting and, more generally, the effect of the dumped imports on prices in the Union industry for like products involves an appraisal of complex economic situations.

34      In those circumstances, judicial review of the Commission’s assessment must be limited to verifying whether the procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there has been a manifest error in the appraisal of the facts or a misuse of powers. That limited judicial review does not however mean that the EU judicature must refrain from reviewing the institutions’ interpretation of information of an economic nature. In particular, the General Court must not only establish whether the evidence put forward is factually accurate, reliable and consistent but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it (judgment of 29 January 2014, Hubei Xinyegang Steel v Council, T‑528/09, EU:T:2014:35, paragraph 53).

35      The scope of the judicial review carried out by the General Court corresponds, moreover, to the condition laid down in Article 3(2) of the basic regulation according to which a determination of injury is to be based on positive evidence and is to involve an objective examination, inter alia, of the effect of the dumped imports on prices in the Union market for like products.

36      Fourth, Article 3(8) of the basic regulation provides that the effect of the dumped imports is to be assessed in relation to the production of the Union industry of the like product. Under Article 1(4) of the basic regulation, the expression ‘like product’ is to be understood as a product which is identical, that is to say, alike in all respects, to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.

37      In the present case, it is apparent from the contested regulation that the Commission determined the price undercutting of the Chinese imports, in relation to prices of the Union industry, by conducting a PCN-by-PCN comparison, where appropriate by making adjustments. That PCN-by-PCN method of comparison is not disputed, as such, by the applicant. It resulted in the determination of price undercutting margins of between 15.2 and 29.1% (recitals 69 and 70 of the contested regulation).

38      It is also common ground that all the Chinese imports were able to be analysed in the context of the determination of price undercutting (recital 69 of the contested regulation). This point has not been disputed by the applicant.

39      The first plea is based, in essence, on two parts, relating (i) to the reference year chosen by the Commission to determine price undercutting and (ii) to the method used to compare the prices of dumped imports with those of products sold by the Union industry.

40      As a preliminary point, it is necessary to rule on the admissibility and scope of the first plea.

 Admissibility and scope of the first plea

41      The Commission raises the question, in its pleadings, of the applicant’s legal interest in bringing proceedings in relation to a change of methodology in the determination of price undercutting. In particular, the Commission takes the view that it is not established that the change of methodology advocated by the applicant would be favourable to it.

42      For their part, the interveners highlight the relationship between the first and the second plea and submit that those pleas can result in the annulment of the contested regulation only if both succeed. The second plea could be rejected, regardless of the outcome of the first plea. Consequently, there is no need to rule on the arguments put forward in support of the first plea. The interveners moreover state that, even if the breach of Article 3(2) and (3) of the basic regulation alleged by the applicant in the first plea is established, such breach does not suffice to render the imposition of the duties unlawful. The applicant has failed to demonstrate that that breach renders erroneous and unlawful the Commission’s conclusion regarding the causation analysis, and more specifically the attribution analysis.

43      As regards the Commission’s arguments, it should be recalled that an action for annulment brought by a natural or legal person is admissible only in so far as that person has an interest in having the contested act annulled. Such an interest requires that the annulment of that act must be capable, in itself, of having legal consequences and that the action may therefore, through its outcome, procure an advantage to the party which brought it. The proof of such an interest, which is evaluated at the date on which the action is brought and which is an essential and fundamental prerequisite for any legal proceedings, must be adduced by the applicant (judgment of 18 October 2018, Gul Ahmed Textile Mills v Council, C‑100/17 P, EU:C:2018:842, paragraph 37). By analogy, the same is true of an interest in raising a plea in law (judgment of 28 February 2017, Canadian Solar Emea and Others v Council, T‑162/14, not published, EU:T:2017:124, paragraph 68).

44      In that regard, it should be noted that the analysis of price undercutting is made in the context of the determination as to whether there has been injury and, in particular, of the effect of the dumped imports on prices in the Union industry for like products. It should also be noted that, in recital 92 of the contested regulation, in a section relating to injury, the Commission found that ‘the Union industry has lost sales volumes and market share, while the imports from China have undercut the Union prices, thereby putting a pressure on the prices’, that ‘the sales prices have decreased’ and that, ‘most importantly, the industry has become loss-making: profitability has deteriorated during the period considered, reaching the worst result in the [investigation period]’. The Commission makes particular reference, in that recital, to price undercutting, which is a legal concept provided for in Article 3(3) of the basic regulation (see, to that effect, judgment of 25 October 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, T‑192/08, EU:T:2011:619, paragraphs 65 and 165). It follows that the Commission did in fact establish a link between the price undercutting of the dumped imports and the development of the Union industry’s prices.

45      By its first plea the applicant submits, in essence, that the Commission failed to take account of all the relevant factors in its analysis of price undercutting and, more generally, of the effect of the dumped imports on prices in the Union industry for like products. If the applicant’s arguments were to be accepted, that would mean that the Commission’s findings were not based on all the relevant data and that, as a result, it had not carried out an objective examination of the effect of the dumped imports on prices in the Union market for like products, in breach of Article 3(2) and (3) of the basic regulation. Such a breach, which would call into question the very basis of the Commission’s finding as to the effect of the dumped imports on prices in the Union market for like products, could result only in annulment of the contested regulation in so far as it concerns the applicant, since it has legal consequences in that regard.

46      In the light of those factors, it must be held that the first plea is admissible.

47      As regards the interveners’ arguments, it should be noted that, admittedly, as the applicant indeed itself states, the second plea is closely linked to the first plea. However, determining the effect of the dumped imports on prices in the Union market for like products, which is part of the determination of whether there has been injury, is an exercise different from that intended to establish the existence of a causal link between the dumped imports and the injury suffered by the Union industry, referred to in Article 3(6) of the basic regulation, even though there is a relationship between the two determinations (see paragraph 32 above). Consequently, the first plea is capable of justifying, on its own, annulment of the contested regulation in so far as it concerns the applicant and must therefore be examined.

 The first part of the first plea, relating to the reference year chosen by the Commission to determine price undercutting

48      As is apparent from recital 18 of the provisional regulation, the investigation of dumping and injury covered the period from 1 January to 31 December 2015 and the examination of trends relevant for the assessment of injury covered the period from 1 January 2012 to the end of the investigation period. In that context, it is common ground that the Commission determined the price undercutting margins by reference to the investigation period, namely 2015.

49      In that regard, in the first place, it is stated in Article 6(1) of the basic regulation that, ‘for the purpose of a representative finding, an investigation period shall be selected which in the case of dumping shall, normally, cover a period of no less than 6 months immediately prior to the initiation of proceedings’. It follows that only the determination of dumping is the subject of specific provisions, which relate to the duration of the investigation period, under the basic regulation. It should moreover be borne in mind that the rules for determining the reference period to be taken into account for antidumping investigations set out in that provision are a guide and not mandatory (see judgment of 28 January 2016, CM Eurologistik and GLS, C‑283/14 and C‑284/14, EU:C:2016:57, paragraph 65 and the case-law cited).

50      In the second place, nothing in the contested regulation provides that the calculation of price undercutting must be carried out in the context of a specific period. Moreover, no evidence has been adduced by the applicant to permit the inference that the period used by the Commission to determine price undercutting was not representative in the present case.

51      In the third place, since the purpose of the analysis of price undercutting is inter alia to determine the effect of the dumped imports on prices in the Union market for like products and since the determination of the dumping is based on data from the investigation period, there is nothing to permit the inference that the Commission erred in deciding to calculate that undercutting on the basis of that period. It should be noted, in particular, that the calculation of price undercutting is based on specific data provided by the exporting producers which participated in the investigation, in particular for the purposes of determining their dumping margins, which were calculated on the basis of the investigation period.

52      In the light of all those factors, it must be held that the Commission did not err in deciding to analyse price undercutting on the basis of the investigation period, namely 2015.

 The second part of the first plea, relating to the method used by the Commission to compare the prices of the dumped imports and those of the products sold by the Union industry

53      As a preliminary point, as regards the Appellate Body’s HP-SSST report on which the applicant relies in support of the first plea, it should be recalled that, although the interpretations of the Anti-Dumping Agreement by the WTO’s Dispute Settlement Body cannot bind the Court in its assessment as to whether the contested regulation is valid (judgment of 11 July 2017, Viraj Profiles v Council, T‑67/14, not published, EU:T:2017:481, paragraph 89), there is nothing to prevent the Court from referring to them, where provisions of the basic regulation have to be interpreted (judgment of 25 October 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, T‑192/08, EU:T:2011:619, paragraph 36).

54      It should also be noted that the provisions of Article 3(2) and (3) of the basic regulation are substantially the same as those of Articles 3.1 and 3.2 of the Anti-dumping Agreement, which were the subject of a special interpretation in the Appellate Body’s HP-SSST report.

55      In that context, it should be borne in mind that Article 3(3) of the basic regulation provides that, ‘with regard to the effect of the dumped imports on prices, consideration shall be given to whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Union industry, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which would otherwise have occurred, to a significant degree’.

56      The consideration of whether there has been significant price undercutting by the dumped imports as compared with the price of a like product of the Union industry means that a comparison must be made between those two prices. The Commission’s examination is moreover carried out in the context of the determination of the effect of the dumped imports on prices in the Union market for like products provided for in Article 3(2) of the basic regulation.

57      In addition, as was noted in paragraph 32 above, the evidence of the existence of injury, including the evidence relating to the effect of the imports on prices in the Union market for like products, is taken into account in the Commission’s analysis of the causal link, which is referred to in Article 3(6) of the basic regulation. Accordingly, the comparison made by the Commission under Article 3(3) of the basic regulation must serve as a basis for its analysis as to whether there is a causal link between the dumped imports and the injury suffered by the Union industry.

58      It follows that the examination carried out by the Commission under Article 3(3) of the basic regulation must make it possible to assess the interaction which exists, during the investigation period, between the prices of dumped imports and those of the Union industry (see the Appellate Body’s HP-SSST report, points 5.159 and 5.160).

59      In the present case, first, it should be pointed out that the Commission noted the existence of three market segments relating to the product under consideration. Thus, the Commission stated in recital 108 of the contested regulation that the different market segments related to (i) oil and gas, (ii) construction and (iii) power generation.

60      However, even though the Commission noted the existence of three market segments, it is common ground that it did not take account of that segmentation in determining whether there had been injury and, in particular, in the analysis of price undercutting. Thus, the injury indicators and, in particular, the analysis of price undercutting refer to the product under consideration as a whole, without any distinction being drawn between the three segments identified by the Commission in the contested regulation.

61      In that regard, first of all, it should be noted that, as is apparent from recital 24 of the contested regulation, not all types of products are directly interchangeable on the demand side, even though it is common ground moreover that producers may adapt their production facilities in order to switch their supplies. The Commission specified in recital 27 of the contested regulation that that difficulty of interchangeability on the demand side related to certain requirements in terms of standards and raw materials, as was observed by the association of Chinese exporting producers, which also highlighted the lack of interchangeability of product types between the different market segments (recital 22 of the contested regulation). That is true, for example, of the types of products in the power generation segment, the manufacture of which involves, according to the Commission’s replies to the measures of organisation of procedure, massive use of high-alloy steels, whereas the manufacture of product types in the other segments involves the use of non-alloy steel.

62      Next, it should be observed that the use of different raw materials in the manufacture of product types also has an effect on price variation between the market segments. Thus, in recital 24 of the contested regulation, the Commission referred to ‘the differences in costs and prices arising from alloy and high-alloy steel’. Those price variations were confirmed by the Commission in its replies to the measures of organisation of procedure, in particular with regard to the power generation segment, in relation to which the average price of the product types was more than double that of the product types in the other segments. Such a price difference between the market segments is a relevant factor to be taken into account for the purposes of the analysis of price undercutting (see the Appellate Body’s HP-SSST report, point 5.181).

63      Moreover, it should be pointed out that, as the Commission confirmed in its replies to the measures of organisation of procedure, 75.1% of imports of the products manufactured by the sampled Chinese exporting producers related to the construction segment. The General Court has already held that, where dumped imports are concentrated in a specific segment, it is logical, and indeed essential for an accurate result of the investigation, that that segment be assessed separately (see, to that effect, judgment of 28 October 2004, Shanghai Teraoka Electronic v Council, T‑35/01, EU:T:2004:317, paragraph 129). The taking into account of the segmentation of the market of the product under consideration for the purposes of analysing the injury, which was already observed by the General Court in the latter case, is not indeed unusual, as is evidenced by the parties’ reference, at the hearing, to the proceeding which led to the adoption of Commission Implementing Regulation (EU) 2018/1579 of 18 October 2018 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain pneumatic tyres, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People’s Republic of China and repealing Implementing Regulation (EU) 2018/163 (OJ 2018 L 263, p. 3). In that case, the Commission had taken account of the segmentation of the market for the purposes of analysing injury, in particular in relation to price undercutting.

64      In addition, the Commission stated, in recital 8 of the provisional regulation, that the largest company of the sampled Union producers had a different business model ‘because it relies for more than 60% of its sales on the oil and gas business’ and that, furthermore, ‘its profitability has deteriorated consistently over the entire period considered, which is another important difference from the other Union producers’. The Commission also observed, in recital 109 of the provisional regulation, that, ‘as the largest company in the sample it has a strong influence on the injury picture’. Those findings were not called into question in the contested regulation.

65      Lastly, it should be borne in mind that, in the contested regulation, the Commission established a link between the analysis of the price undercutting of the dumped imports and the development of the Union industry’s prices (see paragraph 44 above). However, as is apparent from recital 90 of the contested regulation, the development of the Union industry’s prices was determined globally, without any distinction being drawn between the different market segments.

66      By failing to take account of the segmentation of the market of the product under consideration in its analysis of price undercutting and, more generally, of the effect of the dumped imports on prices in the Union market for like products, the Commission did not base its analysis on all the relevant data in the case at issue.

67      In view of the difficulty of interchangeability of the products on the demand side, the price variation between the market segments, the fact that the largest company of the sampled Union producers operated mainly in the oil and gas sector and that the imports of the sampled exporting producers were concentrated in the construction segment, the Commission should at the very least have ensured that the decrease in the prices of the Union industry did not come from a segment in which the Chinese imports had a weak presence or a level of undercutting — on the assumption that it exists — which could not be considered ‘significant’ within the meaning of Article 3(3) of the basic regulation. That conclusion is without prejudice to the use by the Commission, as in the present case, of a PCN-by-PCN method of comparison, where that method forms part of an analysis which takes account of the market segmentation.

68      Second, and moreover, the applicant rightly submits that, in the analysis of price undercutting, the Commission did not take into account a certain volume of the product under consideration produced by the sampled Union producers. The Commission stated, in its replies to the measures of organisation of procedure, that 17 product types out of the 66 sold by the sampled Union producers, accounting for 8% of the sales volume of those producers, had not been taken into account in the analysis of price undercutting, since those products had not been exported by the sampled Chinese exporting producers.

69      In that respect, it should be observed that it is true that the Commission was not in a position to calculate a price undercutting margin for those products to the extent that there was no matching type of imported product.

70      However, as the Commission stated in its replies to the measures of organisation of procedure, the prices of those 17 product types were, by definition, ‘not undercut by the sampled Chinese export sales’.

71      In that regard, it must be recalled that Article 3(2) and (3) of the basic regulation are aimed at determining, in particular by the analysis of price undercutting, the effect of the dumped imports on prices in the Union market for like products. The concept of like product is defined in Article 1(4) of the basic regulation, Article 3(8) of that regulation providing that the effect of the dumped imports is to be assessed in relation to the production of the Union industry of the like product. There is nothing to indicate that the analysis provided for in Article 3(2) and (3) of the basic regulation may not take account of a certain volume of the like product which is not the subject of price undercutting (see the Appellate Body’s HP-SSST report, point 5.180).

72      In particular, the Commission confirmed in its replies to the measures of organisation of procedure that the data set out in recitals 90 and 91 of the contested regulation, in particular the average unit selling prices and the profitability of sales in the Union to unrelated customers, had been calculated on the basis of all the product types sold by the sampled Union producers.

73      It should also be recalled that the Commission established a link, in recital 92 of the contested regulation, between the analysis of the price undercutting of the dumped imports and the development of the Union industry’s prices (see paragraph 44 above).

74      The link thus established by the Commission is necessarily based on an incorrect factual basis, since it was established without taking account of the 17 product types, out of the 66 sold by the sampled Union producers, which were not the subject of price undercutting. In that context, and in the absence of a specific statement of reasons in that regard in the contested regulation, it cannot be ruled out that the 17 types of products in question, accounting for 8% of the sales volume of those producers and perhaps more in terms of value given the variation in prices between segments, contributed, to a not insignificant degree, to the decrease in the prices of the sampled EU producers. It should also be noted that, in recital 92 of the contested regulation, the Commission appears to have established a link between the decrease in the Union industry’s prices and the deterioration of that industry’s profitability.

75      The fact, put forward by the Commission in its observations lodged following the hearing, that the 17 product types in question were not included in the calculation of the injury margin cannot alter that conclusion. The calculation of the injury margin, which is intended to determine the level of the anti-dumping measures to be applied, pursues a different purpose from that of determining whether there has been injury in the light, inter alia, of the effect of the imports on prices in the Union market for like products.

76      In the light of all those factors, it must be held that the Commission failed to take account of all the relevant data in the case at issue in the analysis of the price undercutting and of the effect of the dumped imports on prices in the Union market for like products, in breach of Article 3(2) and (3) of the basic regulation.

77      That conclusion cannot be called into question by the evidence put forward by the Commission after the hearing that, if calculations had been made on the basis of the data available during the investigation, (i) price undercutting would have been established for the three market segments concerned and (ii) the sales of the sampled Union producers would have been concentrated in the construction segment.

78      That evidence, put forward at a late stage in the proceedings before the Court, has no bearing on the fact that an analysis by segment was not carried out for the purposes of adopting the contested regulation and does not therefore form part of its statement of reasons. The Commission cannot properly rely, in support of the contested regulation, on reasons which were not contained in that regulation and were raised by it only after the bringing of the action (see, to that effect, judgment of 21 March 1996, Farrugia v Commission, T‑230/94, EU:T:1996:40, paragraph 36 and the case-law cited).

79      In particular, it should be pointed out that, apart from the fact that there was no determination of price undercutting by market segment, the Commission did not highlight in the contested regulation the fact that sales of the sampled EU producers were concentrated in the construction sector, even though the association of Chinese exporting producers submitted specifically that the imports from China were concentrated in that sector, while the Union producers were more involved in the segments of oil and gas and of power generation (recital 104 of the contested regulation).

80      In any event, the evidence put forward by the Commission after the hearing has no bearing on the fact that it did not take into account a certain volume of the product under consideration marketed by the sampled Union producers whose prices were not undercut as a result of the dumped imports.

81      In the light of the foregoing considerations, it is necessary to uphold the first plea and annul the contested regulation in so far as it concerns the applicant.

 Second plea: infringement of Article 3(6) of the basic regulation and Article 3.5 of the Anti-dumping Agreement

82      The applicant contends that infringement of Article 3(2) and (3) of the basic regulation, relied on in the first plea, also leads to infringement of Article 3(6) of the same regulation. That interpretation is confirmed by the Appellate Body’s HP-SSST report, which clarified the relationship between the different paragraphs of Article 3 of the Anti-dumping Agreement. In particular, the applicant notes that the Commission based its causation analysis on an erroneous finding of price undercutting. The applicant adds that, contrary to what the Commission contends, legal argumentation is not lacking in the second plea.

83      The Commission argues that the applicant’s claim should have been substantiated by legal arguments. The alleged link between infringement of Article 3(2) and (3) of the basic regulation and infringement of Article 3(6) of that regulation cannot absolve the applicant from the obligation to satisfy the requirements of the Rules of Procedure, in particular those set out in Article 76(d) of those rules. Accordingly, the Commission contends that the second plea should be rejected as inadmissible.

84      The interveners contend that it was for the applicant to demonstrate, by addressing the specific findings set out in the contested regulation, that the alleged errors regarding the manner in which the Commission had performed the price undercutting calculation rendered the conclusions on causation ineffective. The applicant has not, however, done that.

85      It is necessary at the outset to reject the plea of inadmissibility raised by the Commission on the basis of Article 76(d) of the Rules of Procedure. It is clear from the application that the applicant puts forward a legal argument based on the alleged link between, on the one hand, the determination of price undercutting and, more generally, of the effect of the dumped imports on prices of like products in the Union, under Article 3(2) and (3) of the basic regulation, and, on the other hand, the establishment of a causal link, under Article 3(6) of that regulation.

86      As to the substance, it should be recalled that the evidence of the existence of injury, including that relating to the effect of the imports on prices in the Union market for like products, is taken into account in the Commission’s analysis of the causal link, which is referred to in Article 3(6) of the basic regulation. Thus, there is a relationship between the determination of price undercutting and, more generally, of the effect of the dumped imports on prices in the Union market for like products, under Article 3(2) and (3) of the basic regulation, and the establishment of a causal link, under Article 3(6) of the basic regulation (see, to that effect, judgment of 30 November 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council and Commission, T‑107/08, EU:T:2011:704, paragraph 59).

87      Moreover, it should be noted that the Commission refers on several occasions, in the recitals of the contested regulation relating to the causal link, to the determination of the price undercutting carried out in the context of the injury analysis (see, in particular, recitals 109, 117 and 121 of the contested regulation). The Commission furthermore stated, as regards the largest company of the sample of Union producers, ‘[that t]here is thus a causal link between the dumped imports from China, undercutting the Union prices, and the injury suffered by the Union producer’ (recital 130 of the contested regulation). The Commission also considered, in recital 109 of the provisional regulation, that, ‘as the largest company in the sample it has a strong influence on the injury picture’.

88      Since it was found in the first plea that the Commission had not taken into account all the relevant data for the purposes of determining price undercutting and of the effect of the imports on prices in the Union market for like products, it must also be held that the Commission’s conclusion as to the existence of a causal link, for the purposes of Article 3(6) of the basic regulation, is based on an incomplete factual basis. In that regard, the interveners’ arguments that the applicant has failed to demonstrate to what extent the Commission’s conclusions on the causal link are ineffective must be rejected. It is for the General Court, in the context of its review, to ensure inter alia that the Commission has taken into consideration all the relevant data in the case at issue. Since that was not the case with regard to the determination of price undercutting and of the effect of the dumped imports on prices of like products of the Union, that error necessarily has an effect on the relevant data that had to be taken into account in the analysis of the causal link, under Article 3(6) of the basic regulation.

89      Consequently, the second plea must also be upheld.

90      In the light of all the foregoing considerations, the contested regulation must be annulled, in so far as it concerns the applicant, and there is no need to examine the other pleas in law raised in support of the action.

 Costs

91      Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those of the applicant, in accordance with the form of order sought by the latter.

92      Pursuant to Article 138(3) of the Rules of Procedure, the interveners must be ordered to bear their own costs.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1.      Annuls Commission Implementing Regulation (EU) 2017/804 of 11 May 2017 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron (other than cast iron) or steel (other than stainless steel), of circular cross-section, of an external diameter exceeding 406.4 mm, originating in the People’s Republic of China in so far as it concerns the products produced by Hubei Xinyegang Special Tube Co. Ltd;

2.      Orders the European Commission to bear its own costs and to pay those incurred by Hubei Xinyegang Special Tube;

3.      Orders ArcelorMittal Tubular Products Roman SA, Válcovny trub Chomutov a.s. and Vallourec Deutschland GmbH to bear their own costs.

Delivered in open court in Luxembourg on 24 September 2019.

*      Language of the case: English.

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