(93) The resulting average export price to global markets found during the review investigation period was 58 % below the normal value established as described in Sections 3.2 and 3.3. Therefore, it was considered likely that, if the current measures were to be repealed, the Chinese exporting producers would start selling to the Union at levels below that normal value.
3.3.5.2. Production capacity and spare capacity in China
(94) Concerning the production capacity and spare capacity in China, due to the non-cooperation of the Chinese producers, findings had to be based on the information provided in the expiry review request. The applicant provided evidence that China production capacity of LAM was estimated to be around 760 million pieces per year (57), which is within the range of production capacity estimated in the previous expiry review investigation (600 to 850 million pieces) (58). The production capacity was estimated to be higher than the actual production which was estimated to around 421 million pieces. The resulting spare capacity is 342 million pieces.
(95) Therefore, production capacity in China is around more than five times bigger than the Union consumption during the review investigation period (ranging 100-150 million pieces in the RIP) and more than four times the Union production during that same period (ranging 150-200 million pieces). Similarly, the spare capacity is roughly twice as big as the Union consumption in the RIP.
(96) In addition, as already established in the previous expiry review (59), given the nature of the manufacturing process in China (mainly labour), the production capacity in China for LAM can be easily increased, inter alia, through the employment of additional workforce with only limited investment in equipment.
(97) Finally, in the absence of any other information, the Commission considered that neither Chinese domestic demand nor worldwide demand will be able to absorb the significant spare capacity available in China.
(98) This confirmed the Commission’s conclusions from the previous expiry review (60) that Chinese producers have sufficient spare capacity to supply the Union market if the measures are allowed to lapse.
3.3.5.3. Attractiveness of the Union market and export prices to third countries
(99) In order to establish the possible development of imports in case measures are repealed, the Commission considered the attractiveness of the Union market with regard to prices. The Union market is attractive in terms of size and prices.
(100) In terms of size, despite the declining consumption of LAM in the Union market, the Union demand for LAM remains substantial and accounts for around 45 % of the world market. The Union market remains the largest worldwide market for LAM.
(101) Moreover, there is only a limited number of other markets where LAM is used. In addition, important markets such as US and Canada remain closed as consumers use other formats of filing. The remaining markets have a much lower size than the Union market and, therefore, they would not be able to absorb the large excess Chinese capacity. In addition, based on the information available, LAM consumption in China is very low and not expected to increase in any significant way. This indicates that it is likely that Chinese exports in large quantities putting the spare capacity into use would be redirected towards the Union, should the measures be allowed to lapse.