CPF 2021 ER: Copper pipe fittings
Expiry review determination

Exclusions

[24] The CITT excluded the following CPF from its injury findings:

• 4 cast drainage lead 8 oz. closet flange
• 4 cast drainage 14 oz. lead closet flange and
• Copper-iron high-pressure alloy fittings manufactured with UNS C19400 grade copper alloy and with safe working pressure up to 1,740 psi

Additional product information^{Footnote 16}

[25] Solder joint copper pipe fittings are used to connect copper pipes, tubes or other fittings to one another. The methods of joining copper fittings include soldering, silver brazing and epoxy or similar gluing techniques. The connections are made by fitting two pieces together and heating the ends of the tubing and fitting, and filling the gap between the two with melted solder which solidifies on cooling to form a strong, leak proof connection. The fittings can also be used to connect copper tubing to other metal systems by use of threaded fittings. However, at least one end of a fitting is always soldered. Finally, the connection can also be made using epoxy or similar gluing methods.

[26] Solder joint copper pipe pressure fittings may be used in conveying liquids (e.g. potable water), gases and air under pressure in residential, industrial, commercial and institutional buildings. Copper pipe pressure fittings are also used in a variety of air-conditioning and refrigeration (ACR) applications. The types of fittings used in air conditioning applications are typically identified by reference to their outside diameters, whereas the same fittings used in non-air conditioning applications such as plumbing and heating are typically identified by reference to their inside or “nominal” diameters. Apart from the reference to diameter, a fitting for an air conditioning application is the same as a fitting for a non-air conditioning application.

[27] Solder joint copper pipe drainage, waste and vent (DWV) fittings are used primarily to convey waste from buildings to sewers and for venting purposes under low-pressure conditions.

[28] Female and male adaptors are used to connect a copper tube to an iron pipe or a water heater. Other adapters include ferrules that are used to join a copper tube to a cast-iron pipe in older installations. Bushings are used to reduce the diameter of other fittings. Couplings are used to join tubes of either the same size or two different sizes to make longer runs through buildings. Elbows are used to change the direction of a copper tube. Flanges and unions are used to provide a connection that can be either unscrewed or unbolted for maintenance or repairs. Tees are used to allow a copper line to be split into two separate lines. There are pressure tees and drainage tees; TY’s (90°) and Y’s (45°). Traps are used to trap water to prevent sewer gases from coming back into a building. Cleanouts are used to provide access to drainage systems in case of blockage; and caps are removable plugs used to permit inspection and access for the purpose of clearing an obstruction.

[29] Solder joint pipe fittings manufactured in Canada and the United States are made to the standards of the ASME (American Society of Mechanical Engineers) / ANSI (American National Standards Institute) and to the standards of the MSS (Manufacturers Standardization Society).

Cello Products Inc.

[34] Cello commenced operations in 1946 in Cambridge, Ontario, as a supplier of cast copper alloy solder joint pipe fittings. Wrought copper and wrought copper alloy solder joint pipe fittings were added to the product line in the 1960s. Cello was incorporated in 1983 and its products are made for pressure and drainage, waste and vent applications. Cello’s domestic production mix for CPF has not changed materially during the POR.^{Footnote 18}

Imports

[37] Total import volumes increased by 9.1% between 2018 and 2020.^{Footnote 23}

[38] Since the dumping period of investigation (POI) of the original investigation (April 1, 2005 to March 31, 2006), CPF imports from the named countries as a percentage of total imports have declined significantly. During the original investigation, imports of CPF by volume from the US, Korea, and China represented 32%, 24%, and 23% of total imports respectively, and the combined CPF imports from the named countries accounted for 79% of the total CPF imports.^{Footnote 24} In contrast, during the POR, CPF imports from the US, Korea, and China represented 2%, 0.1%, and 48% of total imports respectively. The combined CPF imports accounted from the named countries by volume represented approximately 50% of total CPF imports, and an even smaller proportion of the total apparent market, thereby demonstrating that the sources of imports for CPF have shifted since the original investigation.

[39] The market share of imports from named countries gradually decreased from 2018 to 2021.

[40] Imports from other countries by volume increased from 2018 to 2020. Furthermore, in terms of market share, imports from other countries by volume increased from 2018 to 2021.^{Footnote 25}

Parties contending that continued or resumed dumping is likely

[52] Cello made representations through its Canadian Producer ERQ response, as well as in its case brief, in support of its position that the dumping of CPF from the US, Korea and China is likely to continue or resume should the CITT’s orders be rescinded. Consequently, Cello argues that the anti-dumping measures should remain in place.

[53] The main arguments made by the Cello can be summarized as follows:

• Commodity nature of CPF
• Inability of CPF exporters in the named countries to compete at non-dumped prices
• Shifting import patterns from named countries to non-named countries
• Excess production capacity of CPF producers in the named countries and
• Weak market conditions and demand forecasts in the named countries

[54] Before presenting country-by-country arguments, there are several arguments that relate to multiple countries, as discussed below.

Commodity nature of CPF

[55] Cello states that regardless of what country CPFs stem from, whether from Canada, the named countries, or non-named countries, CPFs are an interchangeable commodity. Peter Howell, Cello's Vice-President of Sales and Marketing, indicates that: "a 2-3% price difference will routinely cause me to lose a sale and customers switch suppliers for pennies”. Furthermore, he notes that based on his knowledge, observation, and market intelligence, imported CPFs continue to have a significant presence in the Canadian market.^{Footnote 28}

[56] Cello references the CITT’s Orders and Reasons, dated March 2, 2012, for Expiry Review No. RR-2011-001 to further bolster their claim:

[57] Furthermore, Cello highlights that the CITT also made similar remarks in Copper Pipe Fittings 2:

[58] Cello indicates that due to the commodity nature of CPFs and the fact that pricing is a major factor, if the orders are rescinded, subject goods from named countries will have to compete with low-priced imports from non-named countries and consequently the market would quickly deteriorate.^{Footnote 31}

Inability of CPF exporters in the named countries to compete at non-dumped prices and shifting import patterns from named countries to non-named countries

[59] Utilizing data from Statistics Canada, Cello contends that both the US and Korea now play limited roles in the Canadian market, as the two countries have largely been unable to regain market share since the CITT’s findings were made. Cello attributes this to the fact that normal values in place have made it increasingly challenging for the US and Korea to compete against low-priced imports stemming from new sources, such as Vietnam and Thailand.^{Footnote 32}

[60] Cello states that the CBSA’s enforcement data indicates that the majority of Chinese imports are dumped, as shown by the SIMA duties collected in recent years and that China continues to play a significant role in the Canadian marketplace.^{Footnote 33}

[61] Cello mentions that the amount of SIMA duties collected during the previous expiry review’s POR (January 1, 2013 to January 31, 2016) was approximately $4.3 million. When comparing that to the SIMA duties collected between 2018 and 2020, the amount sits higher at approximately $6.7 million. Cello contends that this is solid evidence that continued dumping is a reality from the named countries and that exporters in the named countries are unable to compete at normal values.^{Footnote 34}

[62] Cello also highlights shifting import patterns in the market. Cello makes reference to the CITT’s findings made on May 25, 2018, where the CITT found that the dumping and subsidizing of CPF from Vietnam caused injury to the Canadian producer. After the CITT’s findings were made, imports from Vietnam were quickly replaced by new sources. Cello indicates that this highlights the commodity nature of CPFs and how trade measures can be quickly evaded by switching import sources.^{Footnote 35} Cello also provides examples of the procurement behaviour of various Canadian importers which supports this claim.^{Footnote 36}

[63] Cello contends that Canadian importers seek out new exporters who are not subject to trade measures and that this phenomenon is not new but has in fact has been seen in the Canadian marketplace since the original findings.^{Footnote 37}

[64] The following country-specific arguments begin with the US, followed by Korea, and China.

United States

Inability of CPF exporters in the US to compete at non-dumped prices

[65] Cello points out that none of the major US exporters of CPF provided responses to the CBSA’s Exporter ERQ. Cello states that this should be viewed as the US exporters’ recognition of their inability to compete in the Canadian market with the current normal values in place, and does not demonstrate a lack of interest in the Canadian market by the US exporters.^{Footnote 38}

[66] Cello contends that despite the fact that all three major US exporters participated in the latest re-investigation and have been issued updated normal values, the volume of imports from the US remains small compared to the historical role they once played in the Canadian market. Cello iterates that this supports their position that US exporters cannot compete in Canada at normal values, especially given the volume of low priced imports stemming from non-named countries.^{Footnote 39}

[67] Cello points out that SIMA duties totaling $2.4 million were collected on subject goods from the US during the POR which illustrates the US exporters’ inability to compete at non-dumped prices.^{Footnote 40} The CBSA notes that $2.4 million is the total value for duty, and $1.1 million of SIMA duties were collected on subject goods from the US during the POR.

Excess production capacity of CPF producers in the US

[68] Cello contends that without any ERQ responses from the major US exporters, the best information available regarding production capacity is historical data. Cello refers to the CBSA’s Statement of Reasons for the 2016 CPF Expiry Review:

Weak market conditions and demand forecasts in the US

[69] Peter Howell, Cello's Vice-President of Sales and Marketing, indicates that demand for CPF is strongly correlated and largely dependent on the amount of non-residential construction activity. He states that there is little indication of an increase in demand for non-residential construction in the US.^{Footnote 42} Cello refers to a market research study which indicates that non-residential construction has declined in recent years in the US, and that it is forecasted to further decline throughout 2022.^{Footnote 43}

[70] Overall, Cello indicates there is no sign that the economic conditions in the US are likely to result in an increased demand for CPF.

Korea

Inability of CPF exporters in Korea to compete at non-dumped prices

[71] Cello indicates that the CBSA has not received any responses to the Exporter ERQ from Korean exporters. However, for the past ten years, Cello states that JungWoo has been the only Korean producer that has been exporting to Canada, as well as the only Korean producer exporting during the POR. JungWoo has actively participated in all re-investigations and has obtained normal values, indicating a continued interest in the Canadian market.^{Footnote 44}

[72] Cello points out that Korean imports have held an immaterial position in the Canadian market during the POR and that SIMA duties have continuously been assessed on the limited imports. Cello contends that this is evidence of Korean exporters’ inability to compete in the Canadian marketplace at normal values.^{Footnote 45}

[73] Furthermore, Cello indicated that Poongsan Industrial Corporation (“Poongsan”), another Korean producer, held a meaningful position in the Canadian market prior to the CITT’s findings but then left the Canadian market once normal values were imposed. Cello believes that it is reasonable to assume that Poongsan would begin exporting to Canada once again at dumped prices, should the orders be rescinded.^{Footnote 46}

Excess production capacity of CPF producers in Korea

[74] Cello indicates that the CBSA has not received any responses to the Exporter ERQ from Korean exporters, resulting in a lack of information on-hand concerning Korean production capacity.^{Footnote 47} However, Cello notes that when considering historical data, Korean producers have had significant excess capacity which could easily be diverted to the Canadian market. Cello refers to the CBSA’s Statement of Reasons for the 2016 CPF Expiry Review:

[75] Cello also refers to the CITT’s Orders and Reasons for the 2016 CPF Expiry Review, where the CITT made several observations regarding excess capacity for both Korea and China, which Cello believes remains true today:

Weak market conditions and demand forecasts in Korea

[76] Cello references a Bloomberg article in which the Government of Korea forecasts that GDP growth for 2021-2022 will be 2.1%, which lags behind that of the 2017-2019 rate of 2.8%.^{Footnote 50} Moreover, Cello speaks on the forecasted construction outlook which boasts a 3.2% output, far below the 25% output in 2017.^{Footnote 51}

[77] Overall, Cello indicates there is no sign that the economic conditions in Korea are likely to result in an increased demand for CPF.

China

Inability of CPF exporters in China to compete at non-dumped prices

[78] Cello states that Canadian importers continue to procure CPFs at dumped prices. Moreover, Cello highlights that during the original CPF investigation in 2006, only two Chinese exporters responded out of the 90 exporters identified, and that throughout the current POR, only one Chinese exporter obtained normal values.^{Footnote 52} Furthermore, Cello points out that during the current expiry review, only Howhi in China responded to the Exporter ERQ.^{Footnote 53}

[79] Cello contends that during the POR, SIMA duties collected on Chinese imports were a noteworthy $5 million, demonstrating a relentless practice of continued dumping even while normal values were in place.^{Footnote 54} Cello indicates that within the past 15 years, a large volume of CPFs have been exported to Canada from non-named countries at low prices and that without normal values in place, Chinese exporters would compete to regain market share by setting prices below that of other import sources.^{Footnote 55}

Excess production capacity of CPF producers in China

[80] Cello states that despite the limited information provided by Chinese exporters and the GOC during the current expiry review, in the CBSA’s Statement of Reasons for the 2016 CPF Expiry Review, the CBSA previously noted; “the immense production capacity of exporters of CPF in China”.^{Footnote 56}

[81] Cello contends that throughout the POR, Howhi has retained enough under-utilized production capacity to overwhelm the relatively small Canadian market.^{Footnote 57}

[82] Cello refers to the CBSA’s Statement of Reasons for the 2016 CPF Expiry Review:

Weak market conditions and demand forecasts in China

[83] Cello contends that the demand of CPFs in China is weak. Cello makes reference to the Bank of America’s GDP growth forecast for China, in which the Bank of America lowered its GDP growth forecasts for 2021, 2022 and 2023. The Bank of America trimmed its GDP growth forecasts for China to 8.0% from 8.3% for 2021, to 5.3% from 6.2% for 2022 and to 5.8% from 6.0% for 2023.^{Footnote 59}

[84] Cello states that due to the CPF production capacity in China, even the most optimistic forecasts for China would be inadequate to absorb the excess production capacity, and given the relatively small size of the Canadian market, any additional volume would have a large impact on Cello.^{Footnote 60}

Parties contending that continued or resumed dumping is unlikely

[88] The CBSA received a response from one party who contended that resumed or continued dumping of subject goods is unlikely should the orders be rescinded. However, due to confidentially reasons, the party and their related arguments cannot be disclosed.

United States

[105] One exporter from the US, Sid Tool, provided a response to the Exporter ERQ. No exporters in the US filed case briefs or reply submissions.

Continued dumping of CPF from the US while the CITT orders were in effect

[106] During the POR, US exports accounted for approximately 4.7% by quantity and 7.6% by value of the imports of CPF from the named countries.^{Footnote 70} Moreover, during the POR, US exports accounted for approximately 2.4% by quantity and 4.1% by value of the imports of CPF from all sources.^{Footnote 71}

[107] Information on anti-dumping duties collected during the POR is presented in the Enforcement Data section. A total of approximately 96,900 kg of CPF from the US entered the Canadian market during the POR. Importations of certain CPF from the US have resulted in the assessment of anti-dumping duties of approximately $1.1 million during the POR.^{Footnote 72} The significant collection of duties demonstrates an apparent inability for US exporters to compete in the Canadian market at non-dumped prices. It is also an indication that exporters in the US have a continued interest in the Canadian market.

[108] On June 28, 2019, the CBSA concluded a re-investigation to update the normal values and export prices of CPF from the US, Korea, and China, and amounts of subsidy of CPF from China. The three major exporters from the US, Elkhart, Mueller, and Nibco, participated in the re-investigation and received updated normal values.^{Footnote 73}

[109] On September 28, 2020, the CBSA concluded a normal value review to update the normal values and export prices of CPF exported to Canada from the US by Nacobre USA. Nacobre USA participated in the normal value review and received normal values.

[110] The number of US exporters participating in recent proceedings suggests that there is a continued interest in the Canadian market.

Shifting import patterns from named countries to non-named countries

[111] Aforementioned evidence on the record shows that the market share of the imports of CPF from non-named countries increased during the POR. Since CPF are a commodity based product, price is a major factor in the purchasing decision. Importers in Canada appear to be purchasing CPF from non-named countries because of lower prices. For example, imports of subject goods from the US from 2018 to 2020 ranged from an average annual low of $25.97 per kg in 2018 to a high of $29.42 per kg in 2019, while imports from other countries during the same period ranged from an average annual low of $12.21 per kg in 2019 to a high of $16.76 per kg in 2018.^{Footnote 74} The average price from non-named countries is significantly lower.

[112] If the orders were rescinded, US exporters may lower prices to compete against these low-priced imports. In order to maintain or secure additional market share, US exporters would likely continue or resume dumping in Canada.

Large production capacity of CPF producers in the US and ongoing relationships with Canadian importers

[113] In light of the limited participation from US producers and exporters of subject goods, the CBSA relied on information from the most recent expiry review regarding production capacity of US producers.

[114] The CBSA previously noted:

[115] The size of the US production capacity is all the more significant when compared to the small size of the overall Canadian market for CPF.

[116] Evidence on the record shows that certain Canadian importers have maintained ongoing relationships with US exporters who have imported CPF in every year during the POR. Furthermore, the CBSA previously noted in the 2016 expiry review that certain US exporters have long-standing relationships with Canadian importers.^{Footnote 76}

Weak market conditions and demand for CPF in the US

[117] The US budget deficit recently widened to USD $1.8 trillion as a result of spending to stabilize the economy from the impacts of COVID-19. Another notable effect of COVID-19 is the increased levels of unemployment in the US which has resulted in consumer spending plummeting.^{Footnote 77}

[118] In the US, non-residential construction, an indicator linked to CPF demand, has declined in recent years and is expected to decline further this year.^{Footnote 78} However, even when there is increased construction activity in the US, it does not seem to necessarily translate to increased domestic CPF sales for US producers. In the most recent expiry review, the CBSA previously noted:

[119] Based on the above statement, it is reasonable to deduce that domestic sales of CPF of US producers suffered even during a period which boasted an upward trend in construction spending and housing starts during the 2016 Expiry Review’s POR.

[120] During the current POR, the non-residential construction sector in the US has actually declined and is expected to decline further this year.^{Footnote 80}

[121] Overall, the modest economic outlook in the US demonstrates that demand for CPF in the US is not likely to expand in the near future. US CPF producers may rely heavily on export markets as non-residential construction in the US declines.

[122] The CBSA believes that the weak market conditions and demand for CPF in the US is likely to lead to continued or resumed dumping by US exporters.

Determination regarding likelihood of continued or resumed dumping—United States

[123] Based on the information on the record in respect of the: commodity nature of CPF; shifting import patterns from named countries to non-named countries; changes in market conditions in Canada; continued dumping of CPF from the US while the CITT orders were in effect; large production capacity of CPF producers in the US and ongoing relationships with Canadian importers; and weak market conditions and demand for CPF in the US, the CBSA has determined that the rescission of the orders is likely to result in the continuation or resumption of dumping of CPF from the US.

Korea

[124] No exporters in Korea provided a response to the Exporter ERQ or filed case briefs or reply submissions.

Apparent inability of CPF exporters from Korea to sell to Canadian importers at non-dumped prices while the CITT orders were in effect

[125] During the POR, Korean exports accounted for approximately 0.3% (by both quantity and value) of the imports of CPF from the named countries.^{Footnote 81} Moreover, during the POR Korean exports accounted for approximately 0.1% by quantity and 0.2% by value of the imports of CPF from all sources.^{Footnote 82}

[126] Information on anti-dumping duties collected during the POR is presented in the Enforcement Data section. A total of approximately 5,400 kg of CPF from Korea entered the Canadian market during the POR. Importations of CPF from Korea have resulted in the assessment of anti-dumping duties of approximately $21,600 during the POR.^{Footnote 83} Imports of subject goods from Korea have declined substantially since anti-dumping duties were first imposed. However, low volumes continued to be imported during the POR. The small volume of imports since the anti-dumping duties were imposed indicates that it is difficult for Korean CPF to compete in the Canadian market at non-dumped prices.

[127] On June 28, 2019, the CBSA concluded a re-investigation to update the normal values and export prices of CPF from the US, Korea and China, and amounts of subsidy of CPF from China. Only one exporter from Korea, JungWoo, participated in the re-investigation and received updated normal values.^{Footnote 84} The minimal exporter participation suggests that there was low incentive to provide information to the CBSA as the exporters are unable to sell to Canadian importers at non-dumped prices.

Shifting import patterns from named countries to non-named countries

[128] As noted earlier, there has been a shift in imports into Canada from the named countries to imports from non-named countries. Evidence on the record shows that the market share of the imports of CPF from non-named countries have increased during the POR. Importers in Canada appear to be purchasing CPF from non-named countries because of lower prices. For example, imports of subject goods from Korea from 2018 to 2020 ranged from an average annual low of $18.42 per kg in 2020 to a high of $47.80 per kg in 2018, while imports from non-named countries during the same period ranged from an average annual low of $12.21 per kg in 2019 to a high of $16.76 per kg in 2018.^{Footnote 85} The average price from non-named countries is significantly lower.

[129] If the orders were rescinded, Korean exporters may lower prices to compete against these low-priced imports. In order to secure additional market share, Korean exporters would likely continue or resume dumping in Canada.

Large production capacity of CPF producers in Korea and ongoing relationships with Canadian importers

[130] In light of the lack of participation from Korean producers and exporters of subject goods, the CBSA relied on information from the most recent expiry review regarding production capacity of CPF producers in Korea.

[131] The CBSA previously noted:

[132] The number of producers of CPF in Korea is all the more significant when compared to the small size of the overall Canadian market for CPF.

[133] Furthermore, evidence on the record shows that Korean exporters have maintained ongoing relationships with certain Canadian importers who have imported CPF from Korea in every year during the POR.

Weak market conditions and demand for CPF in Korea

[134] There is also information on the record that indicates that forecasted demand for CPF in Korea is weak. The Korean government recently forecasted lower GDP growth in 2021-2022 than in 2017-2019.^{Footnote 87}

[135] Recently, Korea’s economy has been under pressure over a spike in COVID-19 cases, delaying domestic consumption. Personal and corporate bankruptcies increased by more than 10% in 2020.^{Footnote 88} The Bank of Korea is forecasting economic growth of 4% this year.^{Footnote 89}

[136] The construction output in Korea declined 0.8% year-on-year in October 2021, following a downward 9.9% drop in the previous month. This was the thirteenth consecutive month of falling construction activity.^{Footnote 90} Moreover, the construction output forecast is trending downward.^{Footnote 91}

[137] Overall, the modest economic outlook in Korea demonstrates that demand for CPF in Korea is not likely to expand in the near future. Korean CPF producers may rely heavily on export markets as the domestic market in Korea slows down.

Determination regarding likelihood of continued or resumed dumping—Korea

[138] Based on the information on the record in respect of the: commodity nature of CPF; shifting import patterns from named countries to non-named countries; changes in market conditions in Canada; imposition of anti-dumping measures by authorities of Canada in respect of similar goods (copper tube); apparent inability of CPF exporters from Korea to sell to Canadian importers at non-dumped prices while the CITT orders were in effect; large production capacity of CPF producers in Korea and ongoing relationships with Canadian importers; and weak market conditions and demand for CPF in Korea, the CBSA has determined that the rescission of the orders is likely to result in the continuation or resumption of dumping of CPF from Korea.

China

[139] One exporter from China, Howhi, provided a response to the Exporter ERQ. No exporters in China filed case briefs or reply submissions.

Continued dumping of CPF from China while the CITT orders were in effect

[140] During the POR, Chinese exports accounted for over 90% (by both quantity and value) of the imports of CPF from the named countries.^{Footnote 92} Moreover, during the POR Chinese exports accounted for approximately 48.1% by quantity and 49.2% by value of the imports of CPF from all sources.^{Footnote 93}

[141] Information on anti-dumping duties collected during the POR is presented in the Enforcement Data section. A total of approximately 1.9 million kg of CPF from China entered the Canadian market during the POR. Importations of CPF from China have resulted in the assessment of anti-dumping and countervailing duties of approximately $5.0 million during the POR.^{Footnote 94} The significant collection of duties demonstrates an apparent inability for Chinese exporters to compete in the Canadian market at non-dumped prices. It is also an indication that exporters in China have a continued interest in the Canadian market.

[142] On June 28, 2019, the CBSA concluded a re-investigation to update the normal values and export prices of CPF from the US, Korea and China, and amounts of subsidy of CPF from China. Only two exporters from China, Hailiang and Howhi, participated in the re-investigation and received updated normal values.^{Footnote 95} The minimal exporter participation suggests that there was low incentive to provide information to the CBSA as the exporters are unable to sell to Canadian importers at non-dumped prices.

Shifting import patterns from named countries to non-named countries

[143] As noted earlier, there has been a shift in imports into Canada from the named countries to imports from non-named countries. Evidence on the record shows that the market share of the imports of CPF from non-named countries have increased during the POR. Importers in Canada appear to be purchasing CPF from non-named countries because of lower prices. For example, imports of subject goods from China from 2018 to 2020 ranged from an average annual low of $13.65 per kg in 2020 to a high of $15.71 per kg in 2018, while imports from non-named countries during the same period ranged from an average annual low of $12.21 per kg in 2019 to a high of $16.76 per kg in 2018.^{Footnote 96} The average prices from non-named countries and from China are within a similar range.

[144] If the orders were rescinded, Chinese exporters may have to maintain lower prices to compete against these low-priced imports. In order to maintain or secure additional market share, Chinese exporters would likely continue or resume dumping in Canada.

[145] Furthermore, as noted in the Copper Tube Expiry Review in 2018, Hailiang is an exporter of particular concern. In response to the CITT’s findings on CPF from China, it began exporting from its related company in Vietnam. Following the CITT’s finding on CPF from Vietnam, Hailiang shuttered its Vietnamese plant and opened a new plant in Thailand. Additionally, in the Copper Tube Expiry Review, market intelligence showed that Hailiang’s copper tube from Thailand was already being imported into Canada at very low prices.^{Footnote 97} As such, Hailiang has a history of dumping. If the CITT’s orders are rescinded, it is likely that Hailiang will revert to exporting from its much larger production facilities in China.

Large production capacity and export-orientation of CPF producers in China and ongoing relationships with Canadian importers

[146] There are a large number of CPF producers in China. The CBSA has previously noted that there may be over 1,227 exporters located in China. Out of the 1,227 exporters of CPF in China, 126 exporters have annual revenue of more than US$ 100 million.^{Footnote 98} While there is limited information on the production capacity and capacity utilization of each of these companies in China, there is indication that there is immense production capacity in China, in comparison to the relatively small Canadian market.^{Footnote 99}

[147] Howhi accounts for a portion of imports of CPF from China during the POR, and demonstrates a continued interest in the Canadian market which is shown by the fact that Howhi indicates Canada as one of its principal markets.^{Footnote 100}

[148] During the POR, Howhi indicates that it has increased its production capacity of CPF since 2018 due to new facilities opened and asset acquisition.^{Footnote 101}

[149] In addition to Howhi, the CBSA has previously noted Hailiang as one of world's largest manufacturers of CPF and copper tubes. Hailiang maintains substantial production capacity in China. Hailiang also has ongoing relationships with importers in Canada, and has demonstrated a continued interest in the Canadian market.^{Footnote 102}

[150] Based on the large production capacity available and export orientation of CPF producers in China, there is significant incentive for producers to pursue export sales at low prices in order to increase capacity utilization.

[151] Moreover, evidence on the record shows that Chinese exporters have maintained ongoing relationships with certain Canadian importers, who have imported CPF from China in every year during the POR.

Weak market conditions and demand for CPF in China

[152] Information on the record indicates that forecasted demand for CPF in China is weak. The Bank of America recently reduced China’s GDP growth forecast for 2022 and 2023.^{Footnote 103}

[153] GDP from construction in China is expected to modestly trend upward.^{Footnote 104} However, the Bank of America also references the growing concern of liquidity issues of China Evergrande Group (“Evergrande”), China’s largest property developer. Evergrande’s liquidity crisis could damage China’s economy as it is a systemically important company. Due to the Evergrande crisis, the already slowing Chinese economy may be affected even further.^{Footnote 105}

[154] The International Monetary Fund’s (IMF) growth outlook for China is marked down slightly. The IMF also mentions large-scale disorderly corporate debt defaults and restructuring, for instance in China’s property sector, that could lead to market volatility.^{Footnote 106}

[155] The overheating real estate property market represents a significant threat to economic and social stability in China.^{Footnote 107}

[156] Moreover, according to the data released on December 16, 2021 by the National Bureau of Statistics of China, China’s real estate climate index has been predominantly in downward trend when looking at the first eleven months of 2021. For the index, figures above 100 indicate economic growth while readings below 100 indicate a slowdown in the Chinese real estate industry. The index stood at approximately 101.45 in January 2021 and has continuously decreased month-over-month ending up at approximately 100.51 in November of 2021. This decrease indicates a slowdown in the Chinese real estate industry.^{Footnote 108}

[157] Overall, the modest economic outlook in China demonstrates that demand for CPF in China is not likely to expand in the near future. Chinese CPF producers may rely heavily on export markets as the domestic market in China slows down.

Imposition of anti-dumping measures concerning Chinese copper pipe and tube in the US

[158] The US currently has anti-dumping measures in place on copper pipe and tube from China.

[159] In the US, anti-dumping duties have been imposed on Chinese copper pipe and tube imports, with attachments such as CPF, since 2010.^{Footnote 109} Due to Canada’s close proximity to the US, Chinese CPF exports can easily be diverted to Canada.

[160] On December 2, 2016, the US International Trade Commission (USITC) extended its orders in the five-year sunset review concerning copper pipe and tube, with attachments such as CPF, from China. The USITC found that the revocation of the anti-dumping orders would likely lead to a continuation or recurrence of material injury to the domestic industry within a reasonably foreseeable time.^{Footnote 110}

[161] On January 16, 2020, the USITC conducted an administrative review concerning copper pipe and tube, with attachments such as CPF, from China, and concluded that the goods were dumped.^{Footnote 111}

[162] Moreover, Howhi states that the growth rate of exports to the US did not meet their expectations.^{Footnote 112}

[163] With the continuation of the US measures, Canada is exposed to diversion risk for available volumes of Chinese CPF.

Determination regarding likelihood of continued or resumed dumping—China

[164] Based on the information on the record in respect of the: commodity nature of CPF; shifting import patterns from named countries to non-named countries; changes in market conditions in Canada; imposition of anti-dumping measures by authorities of Canada in respect of similar goods (copper tube); continued dumping of CPF from China while the CITT orders were in effect; large production capacity and export-orientation of CPF producers in China and ongoing relationships with Canadian importers; weak market conditions and demand for CPF in China; and imposition of anti-dumping measures concerning Chinese copper pipes and tubes in the US, the CBSA has determined that the rescission of the orders is likely to result in the continuation or resumption of dumping of CPF from China.

Parties contending that continued or resumed subsidizing is likely

[165] Cello made representations through its Canadian Producer ERQ response as well as in its case brief in support of its position that subsidizing from China is likely to continue or resume in the event the present orders are rescinded. Consequently, Cello argues that the countervailing measures should remain in place.

[166] The main factor identified by Cello is the continued subsidizing while the orders were in effect.

Continued subsidizing of CPF while the orders were in effect

[167] Cello noted that the GOC failed to cooperate in this expiry review. As such, Cello referred to the fact that in the final determination, the CBSA found that 91% of subject goods from China were subsidized at a rate of 51%. The CBSA identified various subsidy programs that Chinese exporters of subject goods would be entitled to benefit from. Cello claims that CPF producers continue to benefit from the subsidy programs identified in the CBSA’s original CPF investigation.^{Footnote 113}

Parties contending that continued or resumed subsidizing is unlikely

[168] The CBSA received a response from one party who contended that resumed or continued subsidizing of subject goods from China is unlikely if the orders are rescinded. However, due to confidentiality reasons, the party cannot be disclosed.

Determination regarding likelihood of continued or resumed subsidizing—China

[200] Based on the information on the record in respect of the continued subsidizing while the orders were in effect; imposition of countervailing measures by authorities of Canada in respect of similar goods (copper tube); large production capacity and export-orientation of CPF producers in China and ongoing relationships with Canadian importers; and weak market conditions and demand for CPF in China, the CBSA has determined that the rescission of the orders is likely to result in the continuation or resumption of subsidizing of CPF from China.