Statement of reasons—Expiry review determination: Carbon steel welded pipe 2 (CSWP2 2023 ER)

Exclusions

• 1 mm thick carbon steel tubing (SPCC-1, 25.6 mm in outside diameter), double coated (first coated with acrylonitrile butadiene styrene, then with polyvinyl chloride); and
• non-galvanized, ASTM A53, Grade B, Schedule 80 pipe, with an inside diameter of 1 ¼ inches to 1 ½ inches, in 22-ft. lengths, with the inside weld scarfed, originating in/or exported from the Republic of Korea, and produced with AISI C1022M steel with a carbon content of 0.18 percent to 0.23 percent and a manganese content of 0.80 percent to 1.00 percent

[36] For purposes of this expiry review investigation, CSWP also refers to goods produced in Canada that meet the above product definition.

Additional product information

[37] CSWP, also commonly referred to as standard pipe, covers a wide range of pipe products generally used in plumbing and heating applications for the low-pressure conveyance of water, steam, natural gas, air, and other liquids and gases. CSWP, or standard pipe, may also be used in air conditioning systems, in sprinkler systems for fire protection, as structural support for fencing, as piling, as well as for a variety of other mechanical and light load-bearing applications.

[38] The size of CSWP is generally specified by two values: a nominal pipe size (NPS) and a schedule. The NPS relates roughly to the inside diameter of the pipe while the schedule relates to the wall thickness. For a given NPS, the wall thickness will increase as the schedule number increases. For example, CSWP with an NPS of 1 inch (NPS 1) and made to ASTM A53, Schedule 40 requirements will have an outside diameter of 1.315 inches and a wall thickness of 0.133 inch while the same pipe meeting the requirements of ASTM A53, Schedule 80 will have an outside diameter of 1.315 inches and a wall thickness of 0.179 inch.

[39] Although CSWP is generally produced to industry standards such as ASTM A53, ASTM A135, ASTM A252, ASTM A589, ASTM A795, ASTM F1083, Commercial Quality and AWWA C200-97, it may also be produced to foreign standards such as BS1387 or to proprietary specifications as is often the case with fencing pipe. While standard pipe may be manufactured to any of the standards mentioned above, the ASTM A53 specification is the most common as it is considered to be the highest quality and is suitable for welding, coiling, bending and flanging.

[40] Standard pipe may be sold with a lacquer finish, or a black finish as it is sometimes referred to in the industry. It may also be sold in a galvanized finish which means it has been treated with zinc. Both types of finish are intended to inhibit rust although the galvanizing process will deliver a superior result. Galvanized pipe will sell at a premium to black standard pipe because of this, and the fact that zinc costs much more than lacquer.

Parties contending that continued or resumed dumping is likely: Nova

[62] Nova made representations through its case brief in support of its position that dumping from Chinese Taipei, India, Oman, South Korea, Thailand and the UAE is likely to continue or resume in the event that the present order expires. Accordingly, Nova argues that the measures should remain in place.

[63] The main factors identified by Nova can be summarized as follows:

International market conditions

• Global economic conditions
• Global steel market outlook
• China's impact on the global steel market
• Global excess capacity
• Weak global demand for CSWP
• Global CSWP price volatility

Chinese Taipei's economic conditions and the CSWP market

• Chinese Taipei economic conditions
• Production and overcapacity in Chinese Taipei
• Chinese Taipei demand
• Chinese Taipei CSWP prices
• Chinese Taipei's propensity for dumping
• Chinese Taipei's export orientation

India's economic conditions and the CSWP market

• India's general economic conditions and steel sector policies
• India's steel production and capacity
• India's CSWP production and capacity
• India's Steel and CSWP domestic demand
• India's CSWP prices and propensity to dump
• Propensity to dump CSWP and other steel products
• India's export orientation
• Manu International ERQ response

Oman's economic conditions and the CSWP market

• Oman production and overcapacity (Steel and CSWP)
• Oman demand for steel and CSWP
• Oman's propensity to dump
• Oman's export orientation
• Deteriorating conditions in Oman's main trading partners for CSWP

South Korea's economic conditions and the CSWP market

• South Korea's general economic conditions and steel sector policies
• South Korea's steel production and demand
• South Korea's CSWP capacity
• South Korea's CSWP prices and propensity to dump
• South Korea's export orientation

Thailand's economic conditions and the CSWP market

• Thailand overcapacity
• Thailand's declining domestic steel demand
• Thailand's CSWP prices and propensity to dump
• Thailand's export orientation

UAE's economic conditions and the CSWP market

• UAE steel production and CSWP overcapacity
• UAE's economic outlook and declining demand
• UAE's CSWP prices and propensity to dump
• UAE's export orientation

International market conditions

[64] Nova submits that international market conditions make it likely that large volumes of CSWP will be exported to Canada at low prices over the next two years. The international market is volatile and this situation is expected to continue for the next 12 to 24 months.^{Footnote 28} There is excess capacity in the steel and CSWP industry. In order to spread high fixed costs, Nova argues that CSWP producers are incentivized to increase production and to look for overseas markets to export their goods. At the same time, demand is expected to be weak globally. This situation will make the Canadian domestic industry susceptible to continued or resumed dumping if the order expires. These conditions are further explained below.

Global economic conditions

[65] Nova reported that the International Monetary Fund (IMF) anticipates slow economic growth in 2023 and 2024. The effect of high global inflation, ongoing Russia-Ukraine war, and trade disruptions, are negatively impacting the global economy. The IMF noted that global gross domestic product (GDP) is projected to grow by only 3% in 2023 and 2.9% in 2024. Potential problems in China's real estate sector could further add volatility on the global market.^{Footnote 29}

[66] Nova notes that the World Bank has a similar outlook on the global economy. It reported that persistent high inflation and high interest rates could slow the global economy. According to the World Bank, countries in the Association of Southeast Asian Nations (ASEAN) and the Middle East and North Africa (MENA) regions are all forecasted to have negative growth from 2023 through 2024. The World Bank expects that the global GDP will grow by 3% in 2025, but warns that any new adverse situation increases the risk of recession.^{Footnote 30} Many industrial sectors, including CSWP, are facing challenges because of these volatile economic conditions. If the CITT’s order expires at this time, Canadian producers of CSWP would be left without protection and become more vulnerable to imports of dumped goods.

Global steel market outlook

[67] Nova points out that Russia and Ukraine are major steel producers and the effects of the war between them will continue to be felt for some time. Supply chain disruptions, lower steel consumption in Russia, lower export prices, and sanctions add to the overall instability caused by the pandemic and make the global steel market volatile.^{Footnote 31}

[68] Nova adds that high inflation and interest rates in 2022 and 2023 have limited steel demand. Furthermore, according to the World Steel Association (World Steel), steel demand growth is predicted to be 0% in China as the real estate sector remains sluggish. It is expected that future demand for steel would rely less on ASEAN and MENA countries.^{Footnote 32}

[69] Nova suggests that the steel and CSWP industries are interconnected, and as such, trends seen in the steel industry will have an impact on the CSWP industry. Since domestic sales of steel in China and Russia are declining, producers in these countries will likely look for other countries to export their steel products, including CSWP, and push down prices.

China's impact on the global steel market

[70] Nova reports, that historically, China has been one of the main drivers of global steel growth. However, the Organization for Economic Co-operation and Development's (OECD) Steel Committee is concerned about the growing overcapacity, weakening demand for steel and government interventions, which continue to distort steel markets. The OECD also noted that China's real estate crisis contributes to instabilities in the global steel market. Global steel capacity reached 2.5 billion MT in 2023 and is projected to increase significantly in the following years. This increase in capacity is largely driven by investments in China, the ASEAN countries and surrounding regions.^{Footnote 33}

[71] According to the OECD Steel Committee, the Government of China (GOC) promotes and supports steel expansion investments through large subsidies. These incentives have the potential to worsen the issues related to the global steel excess capacity and distort trade.^{Footnote 34}

[72] Additionally, Nova states that steel industries in China and the European Union (EU) are in decline. Citing a S&P Global Platts report, they report that the weak steel demand in China is due to declining property construction, which also affects the consumption of CSWP in China.^{Footnote 35}

[73] Nova suggests that China’s steel overcapacity and declining domestic demand are pushing Chinese producers to look for export markets to sell their steel products. The subject countries are vulnerable to these exportations and now have to find new markets, such as Canada, to sell their own production. If the order expires, the Canadian market would be more susceptible to low-priced imports from the subject countries.

Global excess capacity

[74] According to an OECD Steel Committee report, an additional steel production capacity of 59.9 million MT is scheduled for 2023-2025, with another 106.2 million MT in the planning stages for the same period. Nova submits that excess capacity encourages overproduction and low-priced exports which distort the global market. Steel and CSWP producers will need to find and secure, with low prices, new export markets to sell their production.^{Footnote 36}

[75] Nova points out that while global demand for steel is declining, global capacity keeps increasing. The gap between global steel capacity and production was about 522 million MT in 2021, and 627 million MT in 2022. In 2023, the capacity increased for the fourth year in a row, while the average capacity utilization rate fell to 74.3%.^{Footnote 37}

[76] The OECD reports that steel capacity in the ASEAN region is increasing rapidly and exceeds demand. The MENA region is also seeing significant capacity growth. Nova states that the trends seen in those regions shows the importance of stabilizing the steel markets.^{Footnote 38}

[77] In Europe, steelmaking suffered significantly and contracted in 2022, as the Russia-Ukraine war continues to create uncertainties for the steel industry. Nova notes that, as these markets remain sluggish, producers in subject countries will divert exports to other markets, such as the Canadian market, if the order expires.^{Footnote 39}

[78] Nova submits that the structural imbalance in the steel market will continue to undermine the global CSWP market over the next 2 years. Excess capacity is a problem that has not been addressed properly and current trends are likely going to cancel past efforts at reducing it. Furthermore, in an attempt to spread production costs over a large volume, producers in the subject countries will likely turn to exports to sell their excess capacity. Nova states that as other countries become less profitable, Canada’s market becomes more attractive for these producers.^{Footnote 40}

Weak global demand for CSWP

[79] Nova points out that while there is excess global steel capacity, the current global economic climate is negatively impacting global consumption of steel. Nova makes reference to a report issued in 2023 by the OECD which states that the global steel capacity utilization rate had declined in 2022 to 74.5%. At the same time, the countries with the highest capacity growth have seen their domestic steel demand decline significantly.^{Footnote 41}

[80] According to World Steel, weak demand from certain sectors and steel producers aggressively competing resulted in production levels decreasing by almost 4% from July to August 2023. This followed a trend which started in the previous months and proved World Steel’s projection, that production would increase by 2.3%, to be wrong. The lower than expected steel production level can be attributed to weak demand in the Chinese market, which represents about 57% of global steel output.^{Footnote 42}

[81] Nova states that domestic steel demand in China remained almost the same in 2023 as it was in 2022, at 651.88 million MT. However, during this period, net exports of semi-finished and finished steel increased by 3.1% and crude steel production increased by 2.6%. Nova refers to a report issued by S&P Global Platts which states that while the new property sector in China "fell sharply" in 2023, the GOC tried to offset this situation by investing in infrastructure and energy.^{Footnote 43}

[82] Nova reports that the global construction industry is expected to grow by 2.4% from 2022 to 2037. However, the global economy is still facing many challenges which could negatively impact this projection. Inflation and higher material costs could lower the average annual growth to 1.5% during the same period. Additionally, the supply chain remains vulnerable to disruptions.^{Footnote 44}

[83] Nova submits that the lack of demand in the traditional markets of steel producers located in the subject countries forces them to explore new international markets. If the order expires, it is likely that CSWP and other steel products from the subject countries will be sold into the Canadian market at dumped prices.^{Footnote 45}

Global CSWP price volatility

[84] Nova submits that hot-rolled coil (HRC) prices are a reasonable proxy for CSWP price trends because HRC represents the vast majority of raw material costs for CSWP. Nova reported that the average price of HRC in the US Midwest, Germany, Italy, United Kingdom (UK), India and China increased by 104% in 2021, decreased by 18% in 2022 and decreased by a further 13% in the first 8 months of 2023. This volatility in HRC prices creates uncertainty in the global market and suggests that CSWP prices have followed a similar trend in the subject countries.^{Footnote 46}

[85] Nova contends that, to respond to declining prices and global instability, producers of CSWP in the subject countries will likely ship large volumes of dumped CSWP to Canada if the order expires because of the relatively higher prices in the North American market.^{Footnote 47}

Chinese Taipei's economic conditions and the CSWP market

Chinese Taipei economic conditions

[86] Nova submits that current and future economic conditions in Chinese Taipei and its CSWP industry increase the likelihood of resumed dumping if the order expires. Chinese Taipei's economy entered a technical recession in May 2023. Exports have been declining and this resulted in GDP contracting by 3% year-on-year in the first quarter of 2023. Chinese Taipei's growth for 2023 is forecasted to be the slowest in nearly eight years.^{Footnote 48}

[87] Nova notes that worsening political and economic relations between Chinese Taipei and mainland China are affecting the economy. Impacts from a slowing Chinese economy are felt by Chinese Taipei because a large proportion of China's exports are assembled in Chinese Taipei. Deteriorating relations between the two countries has also led to recent punitive economic actions.^{Footnote 49}

[88] Nova refers to an IMF report which expects that Chinese Taipei's year-on-year real GDP growth will be 0.8% in 2023 and 3% in 2024, compared to 2.4% in 2022. The country's GDP annual growth rate averaged 5.9% from 1983 to 2022.^{Footnote 50}

[89] Nova also reports that higher interest rates in Chinese Taipei are expected to slow down steel demand from the auto and construction industries.^{Footnote 51}

Production and overcapacity in Chinese Taipei

[90] Nova argues that Chinese Taipei's significant steel and CSWP production capacity, increases the likelihood that they will resume dumping in Canada if the CITT’s order expires.^{Footnote 52}

[91] Nova reports that Chinese Taipei's crude steel production declined from 23.2 million MT in 2021 to 20.8 million MT in 2022. Nova points to a Fastmarkets report which shows that producers in Chinese Taipei are planning to reduce their production even more in 2023 due to high electricity costs and low demand.^{Footnote 53}

[92] According to the OECD, Chinese Taipei's total steel capacity in 2022 was 29.4 million MT, which exceeded its steel production of 20.8 million MT by 41%. In 2021, Chinese Taipei's excess capacity for steel increased by 39% from 6.2 million MT in 2021 to 8.6 million MT in 2022.^{Footnote 54}

[93] Nova reports that CSWP production for three producers in Chinese Taipei (Kao Hsing Chang Iron & Steel Corp, Yieh Phui Enterprise Co., Ltd and China Steel Corporation) has increased by 33% from 317,069 MT to 420,915 MT from 2021 to 2022. However, during this time the capacity utilization rate has increased from 55% to 73%.^{Footnote 55}

[94] Nova gathered information from Simdex Metal Tube Manufacturers Worldwide Guide (Simdex)^{Footnote 56} and other publicly available sources, which estimate Chinese Taipei's total CSWP capacity at 927,667 MT in 2023. Of this number, 78% is from subject exporters.^{Footnote 57}

Chinese Taipei demand

[95] Nova notes that in February 2023, Yieh Phui Enterprise Co., Ltd. stated that demand for pipe was weak in the current market. Also, China Steel Corporation, the largest steelmaker in Chinese Taipei and a producer of steel pipes, stated that they had to lower domestic steel prices in July 2023.^{Footnote 58}

[96] Nova highlights, that despite increases in overall production, the volume of domestic sales has either decreased or remained stagnant. Taking Kao Hsing Chang Iron & Steel Corp, Yieh Phui Enterprise Co., Ltd and China Steel Corporation as examples, Nova shows that the total exports of CSWP increased by 135% in 2022 compared to 2021, while domestic sales dropped by 4% during the same period.^{Footnote 59}

[97] Additionally, Chinese Taipei steel mills have had to compete with inflows of low-priced steel products following the imposition of economic sanctions on Russia. Russian steel producers have increased exports to Asia, Chinese Taipei in particular, as a way to reduce excess inventory.^{Footnote 60}

[98] Nova submits that since HRC imports have been declining and exports have been increasing concurrently in 2023. This likely indicates that domestic demand for HRC and CSWP has fallen. In fact, in July 2023, imports of HRC amounted to 30,000 MT, which is 50% lower than when compared to June, and is the lowest monthly volume since January of the same year. At the same time, Chinese Taipei exported approximately 360,000 MT of HRC, a 26.5% month-on-month growth.^{Footnote 61}

Chinese Taipei CSWP prices

[99] Nova points out that the 2023 sunset review in the US found that dumping margins of Chinese Taipei CSWP were significant. This is an indication that Chinese Taipei CSWP producers are likely to resume dumping in Canada if the order expires.^{Footnote 62}

Chinese Taipei's propensity for dumping

[100] Nova provided a list of jurisdictions that have imposed trade restrictions on CSWP and other steel products from Chinese Taipei. Canada, US and Australia have different trade remedies in place. Nova argues that the numerous anti-dumping measures in place against Chinese Taipei steel products suggest that exporters are likely to resume dumping of CSWP into Canada if the order expires.^{Footnote 63}

Chinese Taipei's export orientation

[101] Nova highlights that the deteriorating domestic demand and the effect of the sanctions imposed on Russian steel products increase the likelihood of Chinese Taipei producers dumping CSWP to Canada over the next five years if the order expires.^{Footnote 64}

[102] Nova argues that exports of CSWP from Chinese Taipei appear to be reported under the tariff classification number 7306.30 but also other tariff classification numbers and therefore the total volume is significantly under-reported.^{Footnote 65}

[103] Nova provided data showing that exports from Kao Hsing Chang Iron & Steel Corp, Yieh Phui Enterprise Co., Ltd and China Steel Corporation more than doubled from 2021 to 2022.^{Footnote 66}

Summary: Chinese Taipei

[104] Nova concludes by reaffirming that Chinese Taipei's slow domestic demand for CSWP, increase in CSWP production for exports, softening domestic prices, propensity to dump CSWP into other markets and the existence of other trade measures in place in other jurisdictions increase the likelihood that exporters in Chinese Taipei would resume or continue dumping of CSWP into Canada if the order expires.^{Footnote 67}

India's economic conditions and the CSWP market

India's general economic conditions and steel sector policies

[105] Nova notes that India is the world's second-largest consumer of finished steel products, producer of crude steel and producer of steel pipes and tubes.^{Footnote 68}

[106] Nova states that "Atmanirbhar Bharat", or Self-Reliant India, has played an important role in the development of the steel industry in India in recent years. This plan calls for significant investment and policy supports for the manufacturing sector to create jobs, infrastructure projects, and lower India's trade deficit. Increase in infrastructure spending has been significant under the Modi government. These investments are expected to stimulate growth in the domestic construction industry in 2023.^{Footnote 69}

[107] However, Nova highlights that this level of intervention by the GOI cannot be sustained indefinitely and there are signs that India's economy is beginning to cool off. According to the IMF, India's GDP growth by fiscal year (FY)^{Footnote 70} will be 7.2% in 2022, 6.3% in 2023 and will remain at 6.3% in 2024.^{Footnote 71}

[108] Nova states that many manufacturing sectors in India unexpectedly contracted in FY 2022. This trend is likely to continue because it is anticipated that the economy of major export markets will slow down. Moreover, despite large capital expenditure on infrastructure projects by the government, these schemes have not been able to attract private investments to the level that the government anticipated.^{Footnote 72}

[109] Nova states that India's economy and steel market forecasts are not as strong as expected and much of the government spending will slow in the coming years. Moreover, the lack of domestic private investment shows doubt in India's growth and in the ability of the government to stimulate manufacturing.^{Footnote 73}

India's steel production and capacity

[110] Nova contends that considering India's steel and CSWP capacity and production, and the Indian government's involvement in expanding national steel capacity, the dumping of CSWP is likely to resume and or continue if the order expires.^{Footnote 74}

[111] Nova states that before 2022, India was not a major player in steel production when compared to other Asian steel producers. However, in 2022 Indian steel production rose by 5.5%, while production in China, Japan, South Korea, and Vietnam decreased by 2.2%, 7.4%, 6.5%, and 13.1% respectively. Nova notes that India's crude steel production has increased every year since 2012, except for FY 2020.^{Footnote 75}

[112] Nova provided data showing that India's excess steel capacity in 2023, while lower than in previous years, was significant at 34 million MT.^{Footnote 76}

India's CSWP production and capacity

[113] Nova reports that steel pipe and tube products capacity and production have increased over the same time period, especially since the re-opening of markets after the COVID-19 pandemic. Nova provided a list of some of the largest Indian producers of CSWP and estimated their capacity to be more than 5.2 million MT. This figure does not include all CSWP producers and future plans to increase capacity.^{Footnote 77}

[114] Nova states that growth in steel capacity and production has been driven by policy from the Indian government. One of India's National Steel Policy’s goals is to reach a steel capacity of 300 million MT per year by 2031. Nova highlights that one initiative gives preferential treatment to domestic producers of pipes, among other products, in procurement processes. Introduced in 2021, the government's Production Linked Incentives (PLI) Scheme for Specialty Steel offers financial incentives to steelmakers which committed investment for increasing output of five specialty steel categories. Nova notes that currently CSWP is not part of this scheme, but in 2023 the GOI indicated that the PLI Scheme will be expanded to additional steel products, which may include CSWP. This would further incentivize Indian CSWP producers to increase production.^{Footnote 78}

[115] Nova contends that these policies may contribute to the risks of a global excess capacity crisis. The capacity targets established by the GOI are at odds with the weak global outlook and indicates that India's capacity investments are increasingly at odds with market considerations. These targets anticipate domestic demand growth driven by government policies aimed at doubling per-capita steel consumption by 2030. Nova adds that India's steel production and capacity trends are distorted by policies and show considerable structural imbalances.^{Footnote 79}

India's steel and CSWP domestic demand

[116] Nova states that India's steel consumption growth is forecasted to have a significant decline in 2024 and continue to decline through 2025.^{Footnote 80}

[117] Nova reports that in terms of volume, India’s steel pipe domestic market is split roughly 7:3 between two segments: Electric Resistance Welded (ERW) and Submerged Arc Welded and Seamless (SAWS). The SAWS category includes Helical Submerged Arc Welding pipe and tube (which is commonly used in the same applications as CSWP) as well as seamless and Longitudinally Submerged Arc Welding pipes and tubes (which are more commonly used for high-pressure applications in the oil and gas industry).^{Footnote 81}

[118] While pipe and tube demand in India is expected to grow in FY 2023, the actual consumption levels are only slightly higher than what they were in FY 2020.^{Footnote 82}

[119] Nova argues that growth in domestic demand for both crude steel and CSWP products has been driven by government policy and spending. Major building and civil engineering schemes relating to affordable housing, urban development, and drinking water access are likely to impact CSWP producers. In one project in particular, the Indian government has earmarked INR 3.5 trillion (US$47 billion) toward ensuring piped water supply to every rural household by 2024. That being said, according to World Steel crude steel demand growth will slow rapidly in 2024.^{Footnote 83}

[120] According to Nova, it is unlikely that demand can be maintained without the support of the government. The material requirements for the pipe project previously mentioned includes an estimated steel demand of 11 to 13 million MT, a sizable portion of which is for steel tubes and pipes. However, 67% of the project has already been completed which means that demand for CSWP will likely be lower in the next few years and fall significantly once the project is completed, by 2024-2025. Nova contends that Indian CSWP producers will have to look to export markets such as Canada to sell their excess production at dumped prices and will be able to do so if the order expires.^{Footnote 84}

India's CSWP prices and propensity to dump

[121] Nova states that the wholesale price of steel pipes and tubes in India increased significantly from FY 2021 to FY 2023. This followed domestic price trends for steel products and reflect the rising cost of raw materials.^{Footnote 85}

[122] Nova highlights that recently Indian HRC prices have decreased. Because HRC is a major input in the production of CSWP, it is likely that the price of CSWP in India has also dropped significantly. Steel prices in India are also on a declining trend. Steel prices have continued to decline in FY 2023. According to Nova, this is mostly the result of weak Chinese demand. China's declining domestic demand has led to a rise in export sales, notably in markets like India.^{Footnote 86}

[123] Nova states that falling demand in major steel markets will continue to have a negative effect on Indian CSWP prices for the foreseeable future. Moreover, the Indian Steel Association expects that the GOI will introduce measures to ensure that the steel industry remains competitive globally. Nova argues that such measures could allow Indian producers to keep prices artificially low, contribute to over-production and increase the chances of India dumping CSWP in Canada.^{Footnote 87}

Propensity to dump CSWP and other steel products

[124] Nova argues that India keeps raising its steel pipe and tube capacity even though their domestic demand is slowing down. Furthermore, global overcapacity and weak demand in key export markets add to the risk of India dumping CSWP. This was recently confirmed in dumping cases in Mexico and the US.^{Footnote 88}

[125] Nova refers to an anti-dumping case in Mexico in 2022 as an example. Mexico extended anti-dumping duties on imports of CSWP originating from India. According to the final determination, trade remedy measures and restrictions concerning welded pipe exports from India are in place in several countries. It is also reported that India is looking for export markets for their products.^{Footnote 89}

[126] Nova also notes that in 2023, the US Department of Commerce (DOC) found that the revocation of anti-dumping duty orders on certain CSWP from India would likely lead to a continuation or recurrence of dumping. The DOC estimates that the margin of dumping would likely be up to 87.9% if the finding was allowed to expire.^{Footnote 90}

[127] Nova contends that given the recent findings in the US and Mexico, it is likely that exporters of CSWP in India will resume selling the subject goods at dumped prices in Canada if the order expires. The anti-dumping measures in place against India regarding CSWP and other steel products show that Indian producers have a propensity to dump steel products.^{Footnote 91}

India's export orientation

[128] Nova highlights that India's significant capacity growth and uncertain domestic demand raises the likelihood of CSWP being dumped into Canada over the next 5 years if the order expires.^{Footnote 92}

[129] According to information provided by Nova, CSWP exports increased by 61% to 344,046 MT in FY 2022. In FY 2023, exports decreased by 18% to 281,138 MT. Despite this decrease, the volume of exports remains higher than what it was in FY 2021, at 213,180 MT. It is expected that Indian exports for FY 2024 will be significantly higher than in FY 2023.^{Footnote 93}

[130] Nova argues that India is trying to increase steel exports by stimulating domestic steel production and increasing its capacity. However, weak global demand lowered India's steel exports in FY 2023. According to the Indian Steel Association, as production capacity increases, exports can ensure decent utilization levels for steel producers. They also mention that the GOI anticipates that steel exports will increase from 10-15% of domestic production in 2022 to 20-25% of production by the mid-2020s.^{Footnote 94}

Manu International ERQ response

[131] According to Manu, their response to the ERQ should not be central to the current expiry review investigation because they produce color-coated galvanized pipe exclusively for the fence pipe industry. Nova submits that galvanized CSWP used for fencing are covered by the product definition and therefore Manu’s submission is relevant.^{Footnote 95}

Summary: India

[132] Nova submits that India's growing capacity, slow demand domestically and in its major export markets for CSWP, declining prices, and restrictions in major markets indicate that India is likely to resume or continue dumping of CSWP to Canada if the order expires.^{Footnote 96}

Oman's economic conditions and the CSWP market

[133] Nova argues that the current and forecasted economic conditions for Oman significantly enhance the likelihood of resumed or continued dumping of CSWP if the order expires.^{Footnote 97}

Oman production and overcapacity (steel and CSWP)

[134] Nova states that CSWP producers in Oman are likely to export their production abroad at dumped prices in the future because the demand for CSWP in Oman is slowing down and producers have significant excess capacity.^{Footnote 98}

[135] Nova notes that there are at least three CSWP producers in Oman: Al Jazeera Steel Products Co. (Al Jazeera), TMK Gulf International Pipe Industry (TMK), and Al Samna Metal Manufacturing and Trading Co LLC (Al Samna). Nova refers to the CBSA’s last CSWP expiry review and points out that while TMK appeared to produce only non-subject CSWP, they now produce CSWP with a diameter of 6 inches, which are subject.^{Footnote 99}

[136] Nova notes the production capacity of Al Jazeera at 300,000 MT and TMK at 250,000 MT. ^{Footnote 100}

[137] Nova notes that the CBSA has previously relied on the production and capacity of Al Jazeera as a proxy for Oman's production and capacity of CSWP in its decisions. This methodology was also used in a recent US decision on CSWP.^{Footnote 101}

[138] Nova highlights that Al Jazeera's utilization rate was only 58% in 2022, which is 9% lower than in 2021, which is in line with similarly low levels seen in the past. In 2022, CSWP excess capacity was 125,454 MT.^{Footnote 102}

Oman demand for steel and CSWP

[139] Nova states that geopolitical tensions have negatively impacted the demand for CSWP in Oman. High interest rates and the economic slowdown in China have weakened demand for steel in the region. Al Jazeera reported that high inflation and rising interest rates have made 2022 a challenging year for demand and lowered steel prices.^{Footnote 103}

[140] Nova submits that future steel and CSWP demand in Oman is linked to oil infrastructure projects. However, given the volatility in oil prices, projects that were announced by the Gulf Cooperation Council (GCC) may be delayed and any growth in regional demand might not happen for a while.^{Footnote 104}

[141] Nova notes that domestic CSWP demand is vulnerable to movement in oil prices. To address this, Oman is trying to diversify its economy and shift away from oil. However, this is unlikely to benefit the steel and CSWP industry because the plan targets areas like manufacturing, tourism, transport and logistics, mining and fisheries.^{Footnote 105}

[142] Nova states that while Oman's construction sector is forecasted to grow, data from the IMF shows that private investment in Oman has decreased from US$18.8 billion in 2021 to US$12.5 billion in 2022. It is expected that private investment will remain below US$14 billion through to 2027 and will negatively impact new construction projects. This trend can likely be attributed to changes in policies that are less favorable to foreign investments.^{Footnote 106}

[143] According to the IMF, Oman's GDP growth was 3.1% in 2021, 4.3% in 2022 and is forecasted to grow by only 1.2% in 2023 and 2.7% in 2024.^{Footnote 107}

Oman's propensity to dump

[144] Nova argues that anti-dumping measures in place in Canada and the US against CSWP and other steel products from Oman shows that producers in Oman have a propensity to dump steel products into other markets. It is therefore likely that CSWP will be exported into Canada at dumped prices if the order expires.^{Footnote 108}

Oman's export orientation

[145] Nova submits that producers are likely to export CSWP because domestic demand is weak. Al Jazeera has indicated that to maintain its production, it had to rely on export markets in 2022. Last year, the company sent its first order of merchant bars to the MENA region. While merchant bars are not the subject of this expiry review, Nova argues that it demonstrates the reliance on export markets when domestic demand falls.^{Footnote 109}

[146] Nova highlights that the MENA region is not a reliable export market for exporters in Oman because the region continues to face many political and economic challenges. This makes the MENA region vulnerable to shifting trends in global steel prices and construction demand.^{Footnote 110}

[147] Nova reports that by acquiring numerous certificates that are necessary for exporting to North America and the UK, Al Jazeera has proven that it is interested in new export markets. Al Jazeera stated that it “export[s] to various countries across the Globe” and that “Apart from Oman, Al Jazeera's key markets include the UAE, Saudi Arabia, and North America.”^{Footnote 111}

[148] Additionally, Nova argues that Al Jazeera is not the only CSWP producer interested in export sales. Al Samna Metal stated that it was “one of the largest exporters of ERW pipes and tubes in Oman” and that it shipped products to major countries around the globe.^{Footnote 112}

[149] Nova states that the United Nations (UN) Comtrade data shows that CSWP producers in Oman are export-oriented. Oman's exports of CSWP increased from 7,526 MT in 2020, 108,945 MT in 2021, 96,487 MT in 2022 to 23,447 MT in the first seven months of 2023. However, the volume of exports in 2023 is likely under-reported because it is missing export data for the UAE and Qatar, which are the two largest export markets. Nova argues that weak domestic demand and interest in the North American market, show that exporters in Oman are likely to ship large volumes of CSWP to Canada at dumped prices if the order expires.^{Footnote 113}

Deteriorating conditions in Oman's main trading partners for CSWP

[150] Nova notes that the US and countries in the GCC are the most important markets for CSWP from Oman. These countries made up 87% of Oman's CSWP exports in 2021 and 94% in 2022.^{Footnote 114}

[151] Nova submits that these countries’ domestic pipe demand will not compensate for Oman's excess capacity. The US has anti-dumping measures against CSWP from Oman which were renewed in 2022. These anti-dumping measures will likely encourage producers of CSWP in Oman to export to Canada if the order expires. The UAE saw its GDP growth rate drop in 2023. Rising property prices and high interest rates are likely to disincentivize buyers and may impact the construction industry in the UAE. Infrastructure projects in Qatar do not require any significant volume of CSWP, as these are mostly focused on transportation. Furthermore, Qatar's housing market is reported to be weakened by falling demand and oversupply.^{Footnote 115}

[152] Nova states that because of the current policies in the GCC region, Oman's steel producers will look at other markets to sell their production. For example, Saudi Arabia’s new Rules of Origin imposed 15% tariff on Al Jazeera's steel products in the second quarter of 2022. This tariff will likely remove Omani-produced pipe from Saudi Arabia's infrastructure projects.^{Footnote 116}

[153] Nova contends that given the state of export markets in the GCC, Oman's CSWP producers will be forced to find new markets to sell their excess production capacity. It is likely that producers in Oman will turn to the Canadian market to sell CSWP at dumped prices if the order expires.^{Footnote 117}

Summary: Oman

[154] Nova argues that Oman’s economic conditions, sizable CSWP production capability and excess capacity, interest in the North American market and weak domestic demand increase the likelihood of continued or resumed dumping of CSWP if the order expires.

South Korea's economic conditions and the CSWP Market

South Korea's general economic conditions and steel sector policies

[155] Nova states that the steel industry in South Korea is considered a key industry and has a crucial role in the economy of the country. According to the OECD, South Korea’s steelmaking capacity is the sixth-largest in the world. In 2020, South Korea was the world's third-largest exporter of steel pipes, tubes and hollow profiles. The Government of South Korea’s goals regarding steel are to increase self-sufficiency and improve the balance of trade by increasing exports.^{Footnote 118}

[156] Nova reports that South Korea's GDP expanded by 0.9% in the first quarter of 2023, which is the lowest annual growth since the last quarter of 2020. According to the IMF, South Korea's GDP growth was 4.3% in 2021 and 2.6% in 2022. Its GDP is expected to grow by 1.4% in 2023 and 2.2% in 2024. Nova notes that exports account for 32% of the South Korean GDP. In a 2023 report, the OECD states that steel trade in South Korea contracted partly due to a decline in the construction. However, ING Bank predicts that exports will lead to an economic recovery in South Korea in 2023.^{Footnote 119}

[157] Nova highlights that the Government of South Korea is planning to shift its fiscal policy and cut annual government spending for the first time in 13 years by approximately US$473 billion in 2023.^{Footnote 120}

[158] Additionally, Nova notes that in 2023, the Government of South Korea announced a Steel Industry Development Strategy for Transition to Low-Carbon Steel Production, stating that reducing emissions can also help competitiveness. Valued at US$150 billion, this program will support de-carbonization of the steel industry and will also amend laws pertaining to ferrous scrap and labour management. Nova reports that the Government of South Korea is also considering taking countermeasures to trade barriers and exports to boost steel exports. Agreements have been signed with seven steel-producing companies, including POSCO and Hyundai Steel, to encourage co-operation between the government and industries.^{Footnote 121}

[159] Nova submits that economic indicators are weak for South Korea and the number of infrastructure projects will decline in the short to medium term. This will negatively impact domestic consumption of CSWP in South Korea. To respond to this situation, the Government of South Korea pushes to improve the competitiveness of South Korean steel on the global market. Nova submits that these factors show that dumping of CSWP into Canada will resume if the order expires.^{Footnote 122}

South Korea's steel production and demand

[160] Nova contends that the significant level of steel production in South Korea increases the likelihood of resumed dumping of CSWP if the order expires. South Korea's crude steel production was 67.1 million MT in 2020, 70.4 million MT in 2021 and 65.8 million MT in 2022.^{Footnote 123}

[161] Nova states that even though domestic demand outpaced production in 2022, South Korea’s share of global steel demand has been steadily decreasing since 2000, from 5% of world demand, down to 3% in 2019. South Korea's steel demand was 77 million MT in 2022, the lowest volume since at least 2010.^{Footnote 124}

[162] According to the Korea Iron and Steel Association, domestic sales of structural pipes have also been declining since 2016.^{Footnote 125}

[163] Nova submits that the declining demand for steel in South Korea can be linked to the lack of investment and sluggish construction activity, as well as a flood, which damaged steel mills in the Pohang area. It is predicted that these factors will continue to impact demand and growth in the South Korean steel sector. Nova argues that these factors increase the likelihood that South Korean producers of CSWP will seek export markets such as Canada if the order expires.^{Footnote 126}

South Korea's CSWP capacity

[164] Nova states that official production capacity figures for South Korean CSWP are not publicly available. However, the reported CSWP capacity of some of South Korea's largest producers is estimated to be at least 4.3 million MT. Because there is no information available on several producers, this estimate is likely quite conservative. Nova adds that planned capacity additions are also unknown.^{Footnote 127}

[165] Nova points to a 2023 announcement made by Hyundai Steel in which the company says that it plans to increase its competitiveness in the global market by creating a steel pipe subsidiary by the end of 2023. Hyundai Steel’s current pipe production capacity is 1.1 million MT per year and it plans to increase this capacity.^{Footnote 128}

South Korea's CSWP prices and propensity to dump

[166] Nova submits that the anti-dumping measures in place in Australia, Canada, Mexico, New Zealand, Thailand and the US against South Korean CSWP and other steel products show that South Korean producers have a propensity to dump steel products into other markets. It is therefore likely that South Korean producers will resume selling CSWP into Canada at dumped prices if the order expires.^{Footnote 129}

[167] Nova reports that in 2023, the DOC completed a sunset review of its anti-dumping order against circular welded non-alloy steel pipe and concluded that South Korea was likely to continue dumping if the finding was not renewed. The DOC completed five administrative reviews and one scope inquiry for South Korea since 2017. The DOC is currently conducting an anti-circumvention investigation regarding imports of pipe completed in Vietnam using South Korean hot-rolled steel. Nova argues that this shows a continued interest by South Korean producers in the North American market.^{Footnote 130}

South Korea's export orientation

[168] Nova refers to a 2022 report from the Government of South Korea which states that the number of export enterprises in the country rose by 0.4% year-over-year, while the number of import enterprises fell by 1.6% in the same period.^{Footnote 131}

[169] Nova points out that in their annual reports, South Korean steel and CSWP producers demonstrated their export orientation. In the second quarter of 2023, KG Dongbu Korea's ratio of domestic to exports sales was approximately 4:6, which is similar to the previous quarter. In 2022, Seah Steel Corporation domestic sales volume of carbon steel pipes decreased by approximately 15% compared to 2021. At the same time, export sales volume increased by about 2%.^{Footnote 132}

[170] Nova reports that South Korea's exports under the tariff classification number 7306.30 increased by 3% in 2022 compared to 2021 and remain high in the first seven months of 2023.^{Footnote 133}

Summary: South Korea

[171] Nova contends that South Korea's growing capacity, slow demand domestically for CSWP, propensity to dump steel products and restrictions in major markets indicate that it is likely to resume dumping CSWP in Canada if the order expires.^{Footnote 134}

Thailand's economic conditions and the CSWP market

[172] Nova submits that slowing economic conditions in Thailand and a shrinking regional market for CSWP, are such that resumed or continued dumping of CSWP from Thailand is likely to occur if the order expires.^{Footnote 135}

[173] Nova reports that the Governor of the Bank of Thailand stated that the Thai economy was forecasted to grow by 3.6% in 2023, but had to revise its projection to only 2.5%. Total imports have dropped by 12.8% year-on-year in its sixth successive month of decline since October 2020. Businesses may grow increasingly wary of Thailand's foreign investment climate because of ongoing political uncertainties.^{Footnote 136}

[174] According to the IMF, Thailand's GDP growth was 1.5% in 2021 and 2.6% in 2022. It is forecasted to grow by 2.7% in 2023 and 3.2% in 2024.^{Footnote 137}

Thailand overcapacity

[175] Nova states that Thailand remains the third largest steel producer in the ASEAN countries. It is estimated that Thailand imported roughly 70% of its steel in 2023. Thailand's crude steel production and capacity continues to increase while utilization rates remain low. The utilization rate is 33% for bars and long products and 24% for flat products. Industry analysis show that overall steel utilization rates for Thailand sit below 30% compared to the global average of around 74.3%. Based on this, Nova suggests that Thailand's utilization rate for pipe and tube products is also very low. Low utilization rates encourage producers to export excess production to markets without trade restrictions.^{Footnote 138}

[176] Nova states that despite low utilization rates, production capacity is expected to increase from 23.6 million MT in 2022 to 30 million MT in 2023. However, Thai demand has consistently remained around 16.4 to 19.3 million MT per year. Nova submits that Thai producers disregard demand when determining their capacity and this increases the likelihood that they will sell CSWP at dumped prices into Canada if the order expires.^{Footnote 139}

[177] Nova provided data which shows that Thailand's CSWP capacity is high. Based on the available information, Nova has estimated the total capacity of CSWP production in Thailand to be at least 950,000 MT. Considering Thailand’s overcapacity, Thai CSWP producers are capable of flooding the Canadian CSWP market.^{Footnote 140}

Thailand's declining domestic steel demand

[178] Nova submits that Thailand's domestic steel demand reached 16.39 million MT in 2022, the lowest level in 12 years. Reports on the steel industry in Thailand estimate that the slight GDP growth in 2023 will have a positive impact on the domestic steel demand and raise steel demand from 16.39 million MT in 2022 to 17.0 million MT in 2023. Nova points out that the actual steel demand is expected to remain weak in Thailand due to high inflation, slow construction development, political turmoil and imports from other countries such as China and Vietnam.^{Footnote 141}

[179] Nova highlights that inflation remains a problem in Thailand and continues to affect steel demand. In 2022, inflation was 6.1%. Inflation was lower in 2023 at 2.8%, but still above 2021 levels by more than a percentage point. Nova states that inflation is one of the main reasons why steel demand decreased by 4% in 2022. Therefore, inflation will likely continue to negatively impact steel and CSWP demand within Thailand in 2023-2024.^{Footnote 142}

[180] Additionally, Nova argues that inflation limited growth in Thailand's construction sector. Thailand's GDP from construction growth contracted by 2.67% in the second quarter of 2023 compared to the previous quarter. Overall, construction spending declined by 1.5% in 2022. The lack of investment in the construction sector will affect pipe producers, as it is one of their main markets. Nova gives the example of Pacific Pipe, which plans to sell 400,000 MT of CSWP primarily to the construction sector in 2022. Thai CSWP producers will be forced to look to export markets to sell their excess production.^{Footnote 143}

[181] Nova argues that the optimistic steel demand projections from Thai institutions are dependent on the political situation. However, recent political tensions, protest movements and a crisis of confidence mean that the construction industries are unlikely to receive any public funding.^{Footnote 144}

[182] Nova contends that given the current situation in Thailand, CSWP producers will have to look for new markets to compensate for the low domestic demand and sell excess capacity. Therefore, they are likely to sell CSWP at dumped prices into Canada if the order expires.^{Footnote 145}

Thailand's CSWP prices and propensity to dump

[183] Nova highlights that CSWP producers in Thailand have reported decreasing domestic prices. As an example, Pacific Pipe reported that it lost revenue in 2023 because prices for CSWP were lower than in 2022.^{Footnote 146}

[184] Nova points out that Australia, Canada and the US have anti-dumping measures in place against CSWP and other steel products from Thailand. This suggests that producers in Thailand have a propensity to dump steel products, including CSWP, into other markets. Nova argues that producers in Thailand will likely resume selling CSWP to Canada at dumped prices if the order expires.^{Footnote 147}

[185] Nova reports that in 2023, the DOC concluded an expedited sunset review and decided to keep its anti-dumping order against CSWP from Thailand in place. The DOC is also in the process of a sunset review of its anti-dumping and countervailing measures against circular welded pipe and tube from Thailand. Given the continuation of these anti-dumping duties in the US, it is likely that Thai producers would resume selling CSWP into Canada at dumped prices if the order expires.^{Footnote 148}

Thailand's export orientation

[186] Nova states that increases of regional steel imports into Thailand are limiting the market for domestic steel producers and lowering the domestic price of steel. Producers in Thailand face strong competition from an influx of dumped steel products from China. According to Nova, producers from China try to circumvent anti-dumping measures on Chinese steel products by exporting to Thailand. To deal with the weak domestic demand and influx of imports, steel producers in Thailand are likely to look to non-regional export markets.^{Footnote 149}

[187] Nova reports that Thailand's ASEAN neighbors, including Malaysia, Philippines and Vietnam, are all increasing their steel capacity and production. In 2022, China was at its highest steel production level in seven years.^{Footnote 150}

[188] Nova provided data showing that Thailand is increasingly relying on CSWP exports and that Canada is a major market. Thailand's exports of CSWP have been steadily increasing for the past three years. In just the first seven months of 2023, CSWP exports from Thailand have surpassed the previous full year by almost 13,000 MT, an increase of 21%. A large portion of these exports is shipped to Canada, which is now Thailand's second largest export market.^{Footnote 151}

[189] Nova notes that the export orientation of the steel industry in Thailand is supported by an organization called the Iron and Steel Institute of Thailand, which helps Thai manufacturers compete in the global market. With organizations like this, Thai steel exports are likely to continue to depend on export markets like Canada if the order expires.^{Footnote 152}

[190] According to reports submitted by Nova on the steel industry in Thailand, the steel market is increasingly competitive in the ASEAN region and Thai producers are looking at export markets beyond the surrounding region, into North America. Nova also notes that Canada and Thailand have growing connections and recently concluded the fourth round of negotiations for a free trade agreement in 2023. This agreement would include iron and steel products from Thailand, which is likely to result in an increase in the volume of CSWP shipped to Canada at dumped prices.^{Footnote 153}

Summary: Thailand

[191] Nova contends that weak domestic demand, low prices, high capacity, export orientation of CSWP producers in Thailand and anti-dumping findings on CSWP from Thailand increase the likelihood that exporters in Thailand would continue or resume selling CSWP into Canada at dumped prices if the order expires.^{Footnote 154}

UAE's economic conditions and the CSWP market

[192] Nova submits that the UAE's increase in domestic crude steel production and capacity, as well as the export orientation of CSWP producers increase the likelihood of continued or resumed dumping of subject goods if the order expires.^{Footnote 155}

UAE steel production and CSWP overcapacity

[193] Nova states that UAE producers have continued to increase steel production despite global demand for steel declining. The UAE’s crude steel production was equal to 2.7 million MT in 2020, 3.0 million MT in 2021 and 3.2 million MT in 2022.^{Footnote 156}

[194] Nova notes that the crude steelmaking capacity in the UAE has almost doubled in the past decade, from 2.8 million MT in 2010 to 4.8 million MT in 2022. This increase in capacity is higher than the domestic demand and allows the UAE to sell in international markets.^{Footnote 157}

[195] Nova estimated the total capacity of subject CSWP production in the UAE to be more than 2.2 million MT and total UAE CSWP capacity to be over 3.2 million MT. According to Nova, this is a conservative estimate as it does not reflect the full capacity of production of CSWP in the UAE. ^{Footnote 158}

[196] Nova argues that several companies are expanding their CSWP production capacity. For example, AJ Steel signed an agreement which will allow the company to increase its pipe production capacity by 260,000 MT. KHK Scaffolding & Formwork LLC (KHK) is also planning to significantly increase its production capacity.^{Footnote 159}

UAE's economic outlook and declining demand

[197] Nova points out that there is a strong contraction in global steel demand. Nova refers to a World Steel report, which forecasted that the Middle East's steel demand would slow in 2023 to a modest 2.2% growth rate, dropping from 3.8% in 2022. Steel demand is forecasted to recover only partially in 2024, with the growth rate climbing back to 3.2%.^{Footnote 160}

[198] Nova highlights that the UAE is the second-largest market for iron and steel in the GCC region. UAE steel demand is expected to be supported by property developments with the construction industry forecasted to grow by 3.3% in 2023 and by 3.9% from 2024-2027.^{Footnote 161}

[199] However, Nova reports that lower oil prices, tighter financial constraints, and a weaker global economy will slow economic activity in the GCC region, which is expected to decelerate from 7.7% in 2022 to 2.9% in 2023 and to 3.3% in 2024. This trend, which impacts steel and CSWP demand, is also seen in the UAE. In 2022, UAE's GDP grew by 4.2% and is forecasted to grow by 3.5% in 2023 and 3.9% in 2024. At the same time, inflation remains relatively high at 3.4%.^{Footnote 162}

[200] Nova states that CSWP demand in the UAE is likely to decrease due to significant steel imports from China. In 2022, China's exports under the tariff classification number 7306.30 to the UAE were up by 30% compared to 2021 and are likely to increase in 2023. Nova notes that Conares signed a major deal with a supply chain operator in China, Xiamen C&D Corp., Ltd., to increase China's steel exports to the GCC region. Because Chinese CSWP exports are pushing out the UAE's own steel production, UAE producers will be forced to look to export markets to sell their production which increases the likelihood of dumping into Canada if the order expires.^{Footnote 163}

[201] Nova argues that construction industries in the UAE will not be able to absorb the increasing production capacity of CSWP. While growth is forecasted in the real estate construction sector, lengthy administrative procedures for housing and infrastructure projects may have uncertain outcomes.^{Footnote 164}

[202] Nova contends that given the UAE's downward economic outlook, the oversupply of CSWP and the uncertain downstream demand, CSWP producers in the UAE cannot rely on domestic demand to support their production.^{Footnote 165}

UAE's CSWP prices and propensity to dump

[203] Nova states that KDI, a producer located in the UAE, is unable to sell CSWP to Canada at non-dumped prices based on its responses to the 2023 expedited review.^{Footnote 166}

[204] Nova submits that anti-dumping measures in Canada and the US against CSWP from the UAE show that UAE producers have a propensity to dump steel products into other markets. In 2023, the DOC renewed its anti-dumping order against CSWP from the UAE. Nova argues that it is likely that CSWP exporters in the UAE will resume selling subject goods to Canada at dumped prices if the order expires.^{Footnote 167}

UAE's export orientation

[205] Nova argues that the UAE’s government and CSWP producers have demonstrated an increasing interest in exporting steel, especially to Canada. Exports of pipe products from the UAE continue to increase. The UAE's CSWP exports grew by 12% from 2020 to 2022. Exports in the first eight months of 2023 are similar to those of the full year of 2022 and are annualized by 169,000 MT, which would be a further increase of 46% compared to 2022. Canada is the second largest export market for CSWP from the UAE.^{Footnote 168}

[206] Additionally, the UAE has two national programs, “Made in the Emirates” and “Operation 300Bn”, targeting the steel industry and aimed at increasing exports. Nova submits that the UAE's policies will increase steel production without addressing domestic demand. This will likely result in CSWP producers looking for new markets to sell their products.^{Footnote 169}

[207] Nova highlights that various CSWP producers in the UAE are clear about their export orientation. For example, AJ Steel states that its production meets the requirements of customers in many countries including Canada. KDI boasts about its strategic location, close to a major port. Moreover, KHK, THL Tube & Pipe Industries LLC (THL) and TSI Metal Industries (TSI) all report that their products are exported worldwide.^{Footnote 170}

[208] Nova submits that many CSWP producers in the UAE want to become global leaders in the pipe and tubular products market. These export ambitions, combined with restricted export markets and slow domestic demand, will lead these producers to sell their production in Canada at dumped prices if the order expires.^{Footnote 171}

Summary: UAE

[209] Nova argues that the UAE's increase in domestic steel production and capacity, declining domestic demand, anti-dumping findings on CSWP from the UAE, as well as the export orientation of its CSWP producers increase the likelihood of continued or resumed dumping of subject goods if the order expires.

Parties contending that continued or resumed dumping is unlikely

[210] None of the parties contended that resumed or continued dumping of subject goods from Chinese Taipei, India, Oman, South Korea, Thailand and the UAE is unlikely if the order expires.

[211] However, while not directly addressing the likelihood of resumed or continued dumping of subject goods in their response to the ERQ, the GOI presented some relevant information.

[212] The GOI submits that there is a downwards trend in the total volume of exports of the subject goods from India to Canada during the POR. This is due to a shift in demand in Canada itself, not because of measures imposed by Canada. The GOI adds that the Canadian domestic industry’s recent performance has been poor and suggests that producers have already been struggling to secure sales and maintain profitability. The domestic industry is not doing particularly well for reasons other than exports from India and there is no indication that the domestic industry’s performance will improve even if the order continues.^{Footnote 172}

Chinese Taipei

[223] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Chinese Taipei. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to Chinese Taipei. Goods exported from Chinese Taipei by Chung Hung and Shin Yang have been excluded from the finding by the CITT.

[224] Information available for two companies in Chinese Taipei shows that they have been able to achieve a high capacity utilization rate by significantly increasing the volume of exports between 2021 and 2022. Kao Hsing Chang Iron & Steel Corp’s volume of CSWP exports increased from 2,152 MT in 2021 to 15,557 MT in 2022, an increase of over 700%.^{Footnote 178} Another producer, Yieh Phui Enterprise CO., Ltd., exported 126,244 MT of CSWP in 2022, more than doubling its exports from the previous year.^{Footnote 179} This allowed the company to reach a domestic to export ratio of 1:2. At the same time, domestic sales remained relatively stable for both companies.

[225] In 2023, Yieh Phui Enterprise CO., Ltd., referring to the domestic market in Chinese Taipei, stated that “the pipe demand is not good in the current market.”^{Footnote 180} This statement was echoed by another producer, China Steel Corporation, which reported that its “profit in the first five months of the year

[2023] plunged by 93 percent”. The company attributed this decline in revenue to “falling steel shipments, lower prices and gross margin erosion.”^{Footnote 181} The domestic demand of CSWP is not expected to rebound soon, and it is likely that companies in Chinese Taipei will continue to seek to export CSWP to maintain their capacity utilization rate.

[226] Exporters in Chinese Taipei have a propensity to dump CSWP and other steel products which is demonstrated by the numerous anti-dumping measures that have been imposed by Canada and other jurisdictions.

[227] As of January 18, 2023, the CBSA has anti-dumping measures in force for the following steel products originating in or exported from Chinese Taipei:^{Footnote 182}

• Carbon Steel Welded Pipe 2
• Concrete Reinforcing Bar 2
• Corrosion-Resistant Steel Sheet
• Oil Country Tubular Goods 2
• Fasteners; and
• Heavy Plate

[228] In addition to these measures, information on the record indicates that there have been at least eight other measures in two jurisdictions other than Canada, on steel products from Chinese Taipei since 1989.^{Footnote 183} Australia has anti-dumping measures in place against steel products such as hollow structural sections, steel reinforcing bar, hot-rolled coil steel and hot-rolled structural steel sections. In 2023, the DOC determined a margin of dumping of 27% for certain circular welded non-alloy steel pipe from Chinese Taipei and 8% for certain circular welded carbon steel pipes and tubes in a sunset review.^{Footnote 184} The US also has anti-dumping measures for rectangular welded steel pipe and tubing from Chinese Taipei.

[229] As previously mentioned, some CSWP producers in Chinese Taipei have significantly increased their volume of exports. In 2020, CSWP from Chinese Taipei were imported into Canada at dumped prices and SIMA duties were assessed against them. However, since 2021, Chinese Taipei has not exported the subject goods to Canada. Nevertheless, considering the current export trend and interest in the North American market, it is likely that if the order expires, CSWP producers in Chinese Taipei would likely seek to dump their goods into Canada.

Determination regarding likelihood of continued or resumed dumping: Chinese Taipei

[230] Based on information on the record regarding the substantial number of CSWP producers in Chinese Taipei with significant production capacity; the imposition of anti-dumping measures by other jurisdictions in respect of goods of the same description from Chinese Taipei; and the imposition of anti-dumping measures against other steel products from Chinese Taipei in Canada, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of certain CSWP into Canada from Chinese Taipei (excluding goods exported from the Chinese Taipei by Chung Hung and Shin Yang).

India

[231] The CBSA received an ERQ response from one exporter in India, named Manu.^{Footnote 185} The exporter did not express an opinion regarding whether the continued or resumed dumping of CSWP would be likely or unlikely if the order were to expire. Additionally, no case briefs or reply submissions were received from exporters in India. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to India.

[232] The National Steel Policy seeks to increase steel consumption in major segments such as infrastructure, automobiles and housing and aims to increase per capita steel consumption to 158 kg by 2030 from the existing level of 61 kg. The National Steel Policy also projects 300 million MT of steel-making capacity by 2030.^{Footnote 186}

[233] While the administrative record does not contain definitive information as to the total production capacity of CSWP producers in India, the CBSA is nonetheless satisfied that there is significant CSWP production capacity in India.

[234] The CBSA recognizes that this figure is made up of many carbon steel pipe products that fall outside the scope of this expiry review, such as structural tubing products as well as standard pipe and line pipe products with outside diameters greater than six inches. However, even when the CBSA conservatively estimates the production capacity of CSWP in India, it is still significantly greater than the total Canadian CSWP market.

[235] Information on the record suggests that India’s steel and CSWP producers export their product extensively. The Indian Steel Association stated that steel “exports become more important as capacities are added in blocks and demand growth is gradual; exports ensure healthy utilisation levels.” They added that exports are projected to increase by 20 to 25% by 2030. Indian’s CSWP producers are also likely to look at foreign markets to boost their capacity utilization rate. Companies, such as Manu, JTL Infra, APL Apollo Tubes and Asian Group of Companies, have also clearly stated their interest in foreign markets.^{Footnote 187}

[236] Based on information on the administrative record, Indian producers remained active in exporting subject goods to Canada during the POR, despite the fact that subject goods from India were subject to both anti-dumping and countervailing duties. Anti-dumping and countervailing duties, equal to $47,769, were assessed against imports of subject goods originating in or exported from India during the POR.^{Footnote 188}

[237] In addition to Canada having anti-dumping measures in place against CSWP from India, the US has had anti-dumping measures in place since 1986 against certain welded carbon steel pipes and tubes from India.^{Footnote 189} These measures were recently reaffirmed by the DOC on May 8, 2023 when it decided to continue its anti-dumping and countervailing duty orders on certain welded carbon steel pipes and tubes from several countries including India.^{Footnote 190} In the final results of the sunset review, the DOC stated that if the orders expire it would likely lead to the continuation or recurrence of dumping with margin of dumping around 87.9%. In a 2021 expiry review, the Government of Mexico also extended its orders against carbon steel pipe from India, stating that if the measures in place expire it would likely lead to the continuation or recurrence of dumping.^{Footnote 191}

Determination regarding likelihood of continued or resumed dumping: India

[238] Based on information on the record regarding the large number of CSWP producers in India and their significant production capacity; the imposition of anti-dumping measures by the US and Mexico in respect of goods of the same description from India; and the fact that exporters of CSWP from India have continued to export to Canada and have been assessed anti-dumping duty during every year of the POR, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of certain CSWP into Canada from India.

Oman

[239] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Oman. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to Oman.

[240] In 2023, the CBSA concluded a re-investigation to update normal values and export prices of CSWP originating in or exported from the named countries. Only Al Jazeera participated and received normal values in the re-investigation.^{Footnote 192}

[241] Evidence on the record points to there being at least three potential producers of CSWP products in Oman: Al Jazeera, TMK, and Al Samna.^{Footnote 193} Al Jazeera’s website states that its tube mill division has a production capacity of 300,000 MT and produces the following products: black pipes, galvanized pipes and hollow sections. In the previous expiry review, it was found that TMK only produced ERW pipe products with outside diameters greater than six inches, which are not subject to the finding.^{Footnote 194} However, it now appears that TMK produces CSWP with a diameter of six inches, which are subject.^{Footnote 195} The production capacity of TMK is 250,000 MT. It should be noted that, although there are few companies in Oman identified as producing CSWP, these companies’ production capacities alone are quite capable of supplying the entire Canadian CSWP market.

[242] In their 2022 annual report, Al Jazeera notes that 2022 was a challenging year with sluggish demand in Oman because of the high inflation and the effect of Russia’s invasion of Ukraine.^{Footnote 196} The company adds that volatility in oil prices may delay growth in the GCC which is likely to impact the demand for Oman’s pipes and tubes. Also, according to the IMF, private investment in Oman has decreased from US$18.8 billion in 2021 to US$12.5 billion in 2022.^{Footnote 197} The US Department of State reports that this is likely to impact investment in the construction industry which is an important consumer of CSWP.^{Footnote 198} Al Jazeera states in its annual report that its production was affected by lower demand. This may help account for the fact that the company’s sales of CSWP decreased from 162,805 MT in 2021 to 153,181 MT in 2022.^{Footnote 199} Overall, Al Jazeera’s capacity utilization rate fell by 9% in 2022, to 58%. Lower demand within Oman and the GCC is likely to encourage producers in Oman to look for foreign markets to sell their steel products.

[243] According to Al Jazeera’s 2022 annual report, the company markets its products to countries across the globe, including North America, Australia and Europe.^{Footnote 200} The company acquired numerous certificates that are necessary for exporting to markets outside the GCC.^{Footnote 201} Al Samna is also showing a strong interest in markets within, but also outside the GCC. The company’s website states that “we are exporting our products world-wide, United States of America, Qatar, Kuwait, Dubai, and some other major countries.”^{Footnote 202} Based on this information, it is evident that companies in Oman are determined to market their tubular products to export markets and hope to become world leaders.

[244] Similar to CSWP products from Chinese Taipei and India being subject to anti-dumping measures in the US, Oman’s exports of circular welded carbon-quality steel pipe products are also subject to these same measures in the US. In its final determination of dumping issued on December 19, 2016, the DOC established a margin of dumping of 7.36% on exports of circular welded carbon-quality steel pipes from Al Jazeera, as well as for all other exporters in Oman.^{Footnote 203} In December 2022, the DOC has revised the rate to 4.61% for Al Jazeera.^{Footnote 204}

[245] Data shows that Oman is rapidly increasing its volume of exports under the tariff classification number 7306.30.^{Footnote 205} In 2019, the volume of exports from Oman was minimal, but two years later, the volume had jumped to 108,944 MT, with almost 60% going to the US alone. During the POR, Oman did not export subject goods to Canada.^{Footnote 206} However considering the current export trend and interest in North America, it is likely that if the order expires, CSWP producers in Oman would seek to dump their goods into Canada.

Determination regarding likelihood of continued or resumed dumping: Oman

[246] Based on information on the record regarding the significant CSWP production capacity in Oman; the indications of a slowing domestic economy due to fluctuating oil prices; the ambitious export goals set out by Al Jazeera for its products; and the imposition of anti-dumping measures by the US in respect of goods of the same description (circular welded pipe) from Oman, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of certain CSWP into Canada from Oman.

South Korea

[247] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in South Korea. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to South Korea.

[248] Due to the fact that no exporters or manufacturers provided responses during the CBSA’s investigation, a margin of dumping of 54.2% was determined in accordance with a ministerial specification.^{Footnote 208} Non-cooperation in both the CBSA’s original investigation and subsequent reinvestigations may indicate that exporters in South Korea are unable to compete in the Canadian market at non-dumped prices.

[249] During the POR, imports of subject goods from South Korea were minimal, totaling approximately $12,929, on which $8,586 of SIMA duties were assessed.^{Footnote 209} The limited amount of imports can be attributed to the ministerial specification that has been in effect during the POR. In the previous expiry review (January 1, 2014 to September 30, 2017), the total value of CSWP imported from South Korea was much higher, totaling $87,095.^{Footnote 210} It is clear that the measures in force concerning CSWP are restricting imports from South Korea. In the absence of the CITT’s order, it is likely that CSWP producers in South Korea will resume dumping.

[250] Many producers of CSWP in South Korea have indicated that export markets are important to the success of their businesses. For example, Hyundai Steel recently announced that it will increase its capacity and will seek to become more competitive on the global market.^{Footnote 211} Seah Steel Corporation stated that the volume of domestic sales declined by 15% while exports increased by 2% in 2022.^{Footnote 212} KG Dongbu, a major South Korean steel producer, stated that domestic to export sales ratio was approximately 4:6 in 2023.^{Footnote 213}

[251] The propensity of exporters from South Korea to dump steel products in Canada is further demonstrated by the numerous anti-dumping measures imposed against exporters from South Korea by Canada.

[252] As of January 18, 2023, the CBSA has anti-dumping measures in force for the following steel products originating in or exported from South Korea:^{Footnote 214}

• Carbon Steel Welded Pipe 2
• Cold-Rolled Steel
• Concrete Reinforcing Bar
• Corrosion-Resistant Steel Sheet
• Hollow Structural Sections
• Line Pipe 2
• Oil Country Tubular Goods 2; and
• Steel Plate 7

[253] In addition to these measures, information on the record indicates that there have been at least ten other measures in four jurisdictions other than Canada, on steel pipe products from South Korea since 1992.^{Footnote 215}

[254] In its 2023 sunset review for circular welded non-alloy steel pipe from South Korea, the DOC determined that the revocation of the anti-dumping duty order would be likely to lead to the continuation or recurrence of dumping.^{Footnote 216} Furthermore, since the previous sunset review there have been five administrative reviews and, as of May 3, 2023, one ongoing circumvention inquiry.^{Footnote 217}

[255] South Korean exporters’ interest in the North American tube and pipe market is further supported by a 2023 report published by UN Comtrade.^{Footnote 218} The North American market represented 27.6% of the total South Korean exports under the tariff classification number 7306.30 in 2020. This figure increased to 42.3% in 2022. Canada received a significant share of the pipes and tubes exported from South Korea, which was on average 30% between 2020 and 2022. Considering the size difference between the Canadian and US economies, South Korea’s exports to Canada represent a disproportionately large share of their sales to North America.

[256] CSWP exporters in South Korea have well established distribution channels for steel products in North America and have a continued interest in the North American market despite numerous anti-dumping measures imposed on them. For these reasons, as trade remedies increase in the US, CSWP exporters in South Korea are likely to continue or resume dumping of subject goods, should the order expire.

Determination regarding likelihood of continued or resumed dumping: South Korea

[257] Based on evidence on the record in respect of exporters in South Korea continuing to export subject goods to Canada at dumped prices during the POR; the imposition of anti-dumping measures by Canada in respect of similar goods; and anti-dumping measures imposed by the US and other countries against exports of steel products from South Korea, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of certain CSWP into Canada from South Korea.

Thailand

[258] The CBSA did not receive any ERQ responses, case briefs or reply submissions from exporters in Thailand. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record for the purposes of the expiry review investigation with respect to Thailand.

[259] During the CBSA’s original investigation, two producers/exporters, Pacific Pipe Company and Saha Thai, cooperated during the proceedings and received normal values based on the information received and verified by the CBSA. It was determined that Pacific Pipe Company and Saha Thai were both found to be dumping CSWP into the Canadian market and the margins of dumping were considered not to be insignificant.^{Footnote 220}

[260] In 2023, the CBSA concluded a re-investigation to update normal values and export prices of CSWP originating in or exported from subject countries. Saha Thai participated and received updated normal values in the re-investigation.^{Footnote 221}

[261] The total volume and total value of subject goods exported to Canada from Thailand during the POR, when compared to other subject countries, was the highest.^{Footnote 222} The amount of SIMA duties assessed during that period was also the highest.

[262] During the previous expiry review POR (January 1, 2014 to September 30, 2017), the imports of subject goods from Thailand were valued at $1,133,653.^{Footnote 223} The CBSA found that the total value of subject imports from Thailand for the current POR increased significantly to $50,411,280, on which $54,684 of SIMA duties were assessed.^{Footnote 224} In 2017, the total volume of imports of subject goods from Thailand was 418 MT, which is significantly lower than the total volume of imports of 7,472 MT, in the first six months of 2023. The increase in volume and value show that CSWP exporters from Thailand remain interested in the Canadian market. Also, the fact that duties were assessed demonstrates that the subject goods from Thailand were dumped during the POR. As such, there is a strong likelihood that future exports to the Canadian market will be made at dumped prices if the order expires.

[263] The information on the record indicates that anti-dumping measures have been put in place by the US respecting pipe and tubular products from Thailand, including CSWP.^{Footnote 225} In 2023, following an expedited sunset review, the DOC determined that the revocation of the anti-dumping duty order with respect to certain circular welded carbon steel pipe exported from Thailand, would likely have a negative impact on the domestic industry. Therefore, the US maintained its 1985 order which imposes anti-dumping duties on certain CSWP from Thailand.^{Footnote 226}

[264] The CBSA also has an anti-dumping measure against oil country tubular goods, which are similar to the subject goods, originating in or exported from Thailand. On July 23, 2020, the CBSA determined that the expiry of the finding would likely result in the continuation or resumption of dumping of the aforementioned goods.

[265] In light of the measures in force listed above, data from UN Comtrade indicates that Thailand’s primary export market for pipe products was North America throughout the POR.^{Footnote 227} Within the North American market, Canada received a significant share of exports under the tariff classification number 7306.30 from Thailand: 53% in 2021 and 33.2% in 2022. The volumes exported, as represented in the table below, continue to increase, despite anti-dumping duties in force against Thailand by the US and Canada. This indicates that Thai producers have a propensity to export various steel pipe products to certain countries notwithstanding measures against them.

[266] The measure currently in place in the US against exporters in Thailand and the continued dumping which took place in Canada during the POR indicate that producers of CSWP in Thailand continue to be interested in the North American market. Should the current order expire, it appears likely that exporters in Thailand would continue to dump CSWP into the Canadian market. Given the continuation of the DOC anti-dumping order on circular welded carbon steel pipe from Thailand, the volume of dumped goods imported into Canada would likely be higher than the volumes currently imported if the CITT’s order expires.

[267] Nova has estimated the production capacity of CSWP in Thailand to be 950,000 MT.^{Footnote 229} However, since the capacity of some companies is unknown, this number can be considered conservative. Considering the capacity and the current low utilization rate within the steel industry in Thailand, which is estimated to be similar for CSWP, producers in Thailand have the capacity to flood the Canadian CSWP market.

Determination regarding likelihood of continued or resumed dumping: Thailand

[268] Based on evidence on the record in respect of, exporters from Thailand that have continued to export subject goods to Canada at dumped prices during the POR; anti-dumping measures have been imposed against steel pipe from Thailand in the US; and producers in Thailand have significant CSWP production capacity, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of CSWP into Canada from Thailand.

United Arab Emirates

[269] The CBSA did not receive any ERQ responses, case briefs or reply submissions from exporters in the UAE. The CBSA, therefore, relied on information submitted from participating parties, as well as other information on the administrative record for the purposes of the expiry review investigation with respect to the UAE. Goods exported from the UAE by Conares have been excluded from the CITT’s finding.

[270] In the most recent reinvestigation in 2023, three CSWP producers from the UAE cooperated with the CBSA: Ajmal, TSI and UTP.^{Footnote 230} At the same time, the CBSA initiated an expedited review of CSWP exported to Canada from the UAE by KDI. All four companies received normal values based on the information received and verified by the CBSA.^{Footnote 231}

[271] In Nova’s case brief, the production capacity of CSWP producers in the UAE was estimated to be in excess of 3.2 million MT in 2023.^{Footnote 232} Nova submitted that their estimate is likely conservative since information regarding all companies is not publicly available. Furthermore, CSWP producers such as KHK and Ajmal have indicated that they are planning to increase their production significantly.^{Footnote 233}

[272] According to UN Comtrade Data, there has been significant growth in the export market of pipe producers in the UAE since 2020. CSWP producers now export to more than 50 countries worldwide, with a significant share of their sales going to North America.^{Footnote 234} In fact, Canada was the second largest export market for CSWP from the UAE, after the US, in 2022. Exports of pipe products from the UAE to the global market have increased by 12% between 2020 and 2022. Exports under the tariff classification number 7306.30 to Canada have increased significantly between 2020 and 2022, and are now more than four times higher than the level at the beginning of the POR.

[273] It is important to note that not all products included under the tariff classification number 7306.30 are subject goods. However, the CBSA’s compliance data shows that imports of subject CSWP are following a similar trend. Volumes of subject CSWP from the UAE have increased from 39 MT in 2020 to 648 MT in the first half of 2023, with the exception of a decrease in 2021.^{Footnote 236} During the same period, the amount of SIMA duty assessed dropped significantly. This may indicate that companies subject to the CSWP order in the UAE had to raise their prices to avoid the imposition of duties, and if the order expires, it would likely lead to the continuation or recurrence of dumping.

[274] The rapid increase of exports of pipe and tube products from the UAE to the global market demonstrates CSWP producers’ interest in competing internationally. CSWP producers in the UAE, such as Ajmal, KHK, THL, TSI and UTP all clearly state that they are interested in markets around the world.^{Footnote 238} Also, in 2023, KDI petitioned the CBSA to obtain normal values as it anticipates sales to Canada in the future. KDI stated that it has not been able to export CSWP to Canada because the company did not have normal values.^{Footnote 239}

[275] Furthermore, information from UN Comtrade Data indicates that exports of pipe and tube products from the UAE to Saudi Arabia, one of its primary export markets within the GCC, has been decreasing since 2020. Exports of pipe and tube products from the UAE to Saudi Arabia has decreased from 5,414 MT in 2020 to 2,681 MT in 2022, representing a 50.5% decrease.^{Footnote 240}

[276] In 2023, the DOC renewed its 2016 CSWP anti-dumping order against the UAE.^{Footnote 241} Given the continuation of the DOC anti-dumping order on circular welded carbon-quality steel pipe from the UAE, exporters from the UAE would likely increase the volume of dumped CSWP exported to Canada should the current order expire.

[277] In light of this, there continues to be a growing interest for UAE pipe producers to explore export markets. This propensity to export is only exacerbated by the strong competition from Chinese imports in the UAE. The UAE’s imports of Chinese goods under the tariff classification number 7306.30 have increased by 30% since 2021.^{Footnote 242} This indicates that producers in the UAE are dealing with competition from Chinese goods in the domestic market. Because of this, producers of CSWP in the UAE must look to global export markets to sell their goods.

Determination regarding likelihood of continued or resumed dumping: UAE

[278] Based on evidence on the record in respect of the UAE’s significant CSWP production capacity; the export orientation of CSWP producers in the UAE; and the imposition of anti-dumping measures by the US in respect of goods of the same description, the CBSA has determined that the expiry of the order is likely to result in the continuation or resumption of dumping of certain CSWP into Canada from the UAE (excluding goods exported from the UAE by Conares).

Parties contending that continued or resumed subsidizing is likely: Nova

[279] Nova made representations through its case brief in support of its position that subsidizing from India is likely to continue or resume should the order expire. Accordingly, Nova argues that the measures should remain in place.

[280] The main factors identified by Nova can be summarized as follows:

• India's steel industry
• Countervailable subsidy programs
• Research and development in iron and steel sector: Ministry of Steel
• Programs listed in the GOI's ERQ response

India's steel industry

[281] Nova states that India has rich raw material deposits of iron ore and has traditionally had a very cost-effective labour base. The GOI takes pride in its steel sector and seeks to support it through government incentive programs. Despite its large and growing capacity and strong government support initiatives, India's per capita steel consumption is quite low. Because of this, the GOI’s steel subsidy schemes support steel products destined for global markets without countervailing duties in place.^{Footnote 243}

[282] Nova submits that the GOI supports the expansion of India's steelmaking industry through a variety of schemes. The GOI is implementing its "Make in India" policy which promotes Indian steel domestically, participation in World Expo events to showcase Indian steel, adjustments in customs duties in order to enhance the competitiveness of India's steel sector and coordination with other countries to secure the availability of raw material.^{Footnote 244}

[283] Nova refers to a 2023 GOI statement which sets out the GOI's objectives for its steel industry by 2030-2031. The GOI aims to improve the competitiveness and the presence of its steel industry globally. The GOI intends to ensure that taxes and levies are not imposed on export production.^{Footnote 245}

[284] Nova highlights that the 2023 "Make in India" policy is aligned with the GOI's PLI Scheme, a 2021 policy to promote key domestic industries, including steel, through government incentives and benefits. Nova adds that pipe products are not listed in the target areas of steel production, but there is an emphasis on increasing steel plant integration.^{Footnote 246}

[285] Nova reports that in 2023, companies complained about long wait times for payments under the PLI Scheme. The GOI indicated that it would work to make the program more accessible and ensure faster payouts to sectors including steel. Indian steel companies stand to benefit greatly from this massive subsidy scheme over the next 24-36 months.^{Footnote 247}

[286] Nova notes that in 2023, the Ministry of Steel Advisory Committee stated that steel is a key sector for India as it aims to become the world's third largest economy by 2030-2031. While details are unknown at the moment, a new plan called "Production Linked Incentive Scheme 2.0 for Steel” is being discussed by the committee and shows that India continues to develop new plans to subsidize its steel sector.^{Footnote 248}

Countervailable subsidy programs

[287] Nova argues that the subsidy programs for CSWP exporters in India identified in previous CBSA investigations continue to be available. These subsidies are mentioned in the PLI Scheme and its updated 2.0 version, the CBSA's recent final determinations in grinding media and hot-rolled steel sheet, the US's most recent countervailing findings against various steel products from India and India's most recent WTO notification.^{Footnote 249}

Production linked incentive scheme for speciality steel

[288] Nova highlights that the GOI approved a US$840 million budget for a PLI Scheme for steel in 2021. The incentives were planned to be available in 2023-2024, but will now be released in 2024-2025. The main purpose of the PLI Scheme is to reduce India's reliance on imports of certain steel products and to increase exports of such products. Nova adds that under the PLI Scheme, companies may continue to receive benefits under other government programs.^{Footnote 250}

[289] Nova reports that in 2022, the GOI reiterated its plans to use government investment to boost steel production and to facilitate steel exports. The GOI emphasized that measures such as the removal of export duties on steel and the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme will help the domestic steel industry increase its share in the global markets in the coming years.^{Footnote 251} Nova states that the RoDTEP Scheme supports Indian exports by refunding different taxes and levies. In 2022, the scheme was extended to steel exports, including steel pipe and tube products. A previous version of this scheme was successfully challenged by the US at the WTO in 2019. According to the Ministry of Commerce and Industry of India, one of the goals of the RoDTEP Scheme is to increase the competitiveness of export centric industries.^{Footnote 252}

[290] Nova contends that these programs clearly show that the GOI is committed to supporting the steel industry in India through subsidies and incentives over the next few years.^{Footnote 253}

Canada's previous countervailing proceedings

[291] Nova refers to the original finding, in which the CBSA found that 100% of the subject goods imported from India during the period of investigation were subsidized. The CBSA found three actionable subsidy programs at the final determination for the single cooperating exporter, including the Focus Product Scheme, the Pre-shipment & Post Shipment Export Financing Program, and the Duty Entitlement Passbook Scheme. Of the 36 potential programs identified at the outset of the CBSA's investigation, the GOI confirmed the existence of 32 programs.^{Footnote 254}

[292] Nova also notes that in the CBSA's 2017 expiry review investigation, the GOI provided insufficient information regarding the potential subsidy programs identified by the CBSA. The CBSA noted that only general information was provided with respect to Special Economic Zones (SEZ) and the Export Oriented Units (EOU). The CBSA concluded that the expiry of the finding was likely to result in the continuation or resumption of subsidizing into Canada of CSWP originating in or exported from India. According to Nova, there is nothing on the record to demonstrate that any of the programs are no longer available.^{Footnote 255}

[293] Nova states that the CBSA also renewed the hot-rolled steel sheet finding in 2021, which included subsidy allegations for India.^{Footnote 256}

[294] Nova also submits that while a reduction in subsidies following the WTO ruling on Indian exports in 2020 was expected, the CBSA found that the GOI continues to provide financial benefits to Indian steel producers. Nova notes that according to the CBSA, export-based incentive schemes, such as the Export Promotion Capital Goods Scheme, and loans under the Steel Development Fund, are actionable subsidies under SIMA.^{Footnote 257}

[295] Nova reports that in the 2023 CSWP re-investigation, the amounts of subsidy were determined to be 23,872 rupees per MT for two exporters from India.^{Footnote 258}

[296] Nova contends that it is likely that CSWP producers and exporters in India continue to receive benefits from countervailable subsides provided by the GOI.^{Footnote 259}

Us countervailing findings against Indian steel products

[297] Nova submits that since the last expiry review in 2017, the DOC has made several sunset review determinations regarding countervailing subsidies for steel products from India. The DOC completed expedited sunset reviews of its countervailing duty order for hot-rolled steel, both cold-rolled and corrosion-resistant steel, welded stainless pressure pipe and certain cold-drawn mechanical tubing of carbon and alloy steel from India. In all of these cases, the DOC concluded that the revocation of the orders would likely lead to the resumption or continuation of countervailing subsidies by the GOI. Nova argues that the programs found in these investigations are likely employed by producers of CSWP in India since the products are similar and there is overlap of the producers. In each of these DOC cases, expedited sunset reviews were conducted due to lack of adequate participation by the respondents.^{Footnote 260}

[298] Nova argues that since the CBSA’s last expiry review, the conclusions made by the DOC regarding a wide variety of steel products, including other pipe products and hot-rolled steel, and in the absence of any evidence to the contrary, show that it is likely that CSWP exporters in India continue to receive countervailable subsidies from the GOI.^{Footnote 261}

India's WTO notification

[299] Nova submits that in India's 2020-2021 notification on subsidies to the WTO, twenty-seven subsidy programs were listed. However, it is likely that not all currently available programs are listed in the notification since the list has not been recently updated.^{Footnote 262}

India: Export related measures WTO panel report and appeal

[300] Nova refers to a 2019 WTO Panel report on a complaint by the US which alleged that certain Indian subsidies were contingent on export performance and therefore prohibited. The Panel concluded that several subsidies were contingent on export performance and inconsistent with India's obligations.^{Footnote 263}

[301] Nova points out that India appealed the Panel’s decision, but withdrew its appeal in 2023 with notification to the WTO of a mutually-agreed solution. Nova highlights that it is not known whether India's CSWP or its hot-rolled steel producers benefit from the subsidies listed in the original notification.^{Footnote 264}

Programs used by Indian CSWP producers and exporters

[302] Nova states that publicly available information shows that Indian CSWP producers continue to receive subsidies from the GOI. All the following Indian CSWP producers have reported some government support and/or export incentives: APL Apollo Tubes Limited, Goodluck India Ltd., Hi-Tech Pipes Ltd., JTL Industries Ltd., Manu, Rama Steel Tubes Limited, SAIL, Surya Roshni, Swastik Pipe Ltd., Welspun Corp. and Zenith Steel Pipes & Industries Limited.^{Footnote 265}

Research and development in iron and steel sector: Ministry of Steel

[303] Nova submits that the GOI maintains updated reports on the status of the research and development projects which have received financial assistance from the Ministry of Steel. It confirms that several of the companies listed above received financial contributions under this scheme.^{Footnote 266}

Programs listed in the GOI's ERQ response

[304] Nova states that in its response to the CBSA’s ERQ, the GOI reported that of the 36 programs identified by the CBSA, six have been discontinued, six do not exist, 20 are not countervailable or do not meet the definition of a subsidy, and only confirmed the existence of the following four programs: Pre-shipment, Post-shipment and Other Preferential Financing, Export Promotion Capital Goods Scheme, Duty-Free Import Authorisation Scheme, and Duty Drawback Scheme.^{Footnote 267}

[305] Nova submits that the GOI did not provide sufficient information pertaining to the majority of the subsidy programs alleged to not be countervailable. Due to the lack of a complete response on each program from the GOI, it is not possible to determine whether they are not countervailable, and therefore should still be considered by the CBSA. Nova notes that evidence on the record demonstrates that several of these programs were recently found to be countervailable by the CBSA and other authorities in various cases involving Indian steel products.^{Footnote 268}

[306] Nova contends that the GOI failed to provide information on other existing programs, not identified by the CBSA but that have been found to exist in previous cases, such as the Merchandise Export from India Scheme.^{Footnote 269}

Parties contending that continued or resumed subsidizing is unlikely

[307] In its response to the CBSA’s ERQ, the GOI provided information regarding a broad range of programs that the CBSA identified as possibly conferring a benefit to exporters of CSWP in India.

Government of India

[308] The GOI states that by law, SEZ are outside of the customs territory of India. As such, sale of goods to the SEZ from the Domestic Tariff Area and India (DTA) are not required to pay taxes or duties when entering the SEZ. The GOI notes that transfer of goods from the DTA to SEZ is eligible for the same rebate or Central Value Added Tax credit as exports outside of India. The GOI submits that the SEZ program provides strict verification procedures and therefore the SEZ program should be held to not constitute a countervailing subsidy. The GOI highlights that export performance is not taken into account while determining eligibility for duty free imports. All SEZ across India are eligible for duty free imports and the sector of activity is not relevant. The GOI contends that the CBSA should conclude that India's SEZ program is not countervailable because it does not provide financial benefits to companies operating within the SEZ.^{Footnote 270}

[309] The GOI submits that EOU can be set up by entrepreneurs for manufacturing of goods and rendering of services. While different activities are allowed, trading activities are not permitted in the EOU. The GOI provides information regarding the administrative structure of EOU and the approval process. However, the criteria and conditions for this program were not listed in India’s ERQ response. The GOI states that “The purpose of this program is to give a level playing field to exporters that would not have any other means to conduct trade” and because of this, the CBSA should conclude that the EOU program is not countervailable.^{Footnote 271}

[310] The GOI states that the Market Access Initiative Scheme provides assistance to eligible agencies in India to undertake initiatives and activities aimed at developing and strengthening the export market. This scheme is intended to promote exports of Indian goods and services by providing financial support to eligible agencies. The GOI notes that this program does not provide any benefits to the exporters themselves but instead to non-profit organizations and associations, as such benefits do not flow to the exporters, except for statutory compliances. These benefits are for limited purposes and are not contingent upon export performance. The GOI contends that the CBSA should conclude that India's Market Access Initiative Scheme is not countervailable.^{Footnote 272}

[311] The GOI submits that the Status Certificate Program recognizes “business leaders who have excelled in international trade and have successfully contributed to India’s foreign trade”. The status holder certificate grants some administrative advantages. For example, authorisation can be granted on a self-declaration basis, producers can self-certify the origin of their goods, and they can obtain preferential treatment with some agencies. The GOI notes that all exporters of goods, services and technology having an import-export code number are eligible to be recognized as a status holder. Export performance of the previous three years are taken into consideration when granting this status. The GOI argues that this program is not specific because it is not limited to any particular sector or industry. As such, the GOI contends that the CBSA should conclude that India's Status Certificate Program is not countervailable.^{Footnote 273}

[312] The GOI submits that the Pre-Shipment Credit in Foreign Currency Program is intended to make working capital finance available to exporters at internationally competitive interest rates. By “pre-shipment”, the GOI means any loan or advance granted or any other credit provided by a bank for financing export activities. Authorised dealers have been permitted to extend this program to exporters for domestic and imported inputs of exported goods at international interest rates. The GOI notes that loans under the Pre-Shipment Credit in Foreign Currency Program are available on a short-term basis and that no financial contribution is granted to anyone under this program. Since 2010, the new Base Rate system does not give priority to export advances. The GOI argues that the interest rates for export advances are now considered on par with the other commercial advances and as a consequence, it does not confer any benefit to the exporters.^{Footnote 274}

[313] The GOI states that the Export Promotion Capital Goods Scheme allows imports of capital goods at zero customs duty, subject to an export obligation equivalent to six times of duty saved on capital goods imported under the Export Promotion Capital Goods Scheme. This scheme aims to make capital goods available to manufacturers exporters, and merchant exporters tied to a supporting manufacturers. The GOI adds that the eligibility is not limited to a particular sector or region and that any company that meets the criteria, which are not listed in the response, can use the program.^{Footnote 275}

[314] The GOI provides information regarding the administrative structure and the approval process of the Advance Authorisation Scheme. However, the goals of the scheme, as well as the criteria and conditions are not listed in the response. The GOI submits that this scheme is not countervailable in terms of the WTO Agreement on Subsidies and Countervailing Measures (ASCM). The GOI argues that it is well-established that duty exemption and remission programs are not inconsistent with the ASCM. The GOI adds that it has in place and applies a system to confirm which inputs are consumed in the production of the exported product and in what amounts, therefore, the Advance Authorisation Scheme is not countervailable.^{Footnote 276}

[315] The GOI submits that the Duty-Free Import Authorisation is primarily issued to allow duty free import of inputs or raw materials in India. This program allows duty free import of inputs with the condition of minimum value addition of 20% of cost, insurance, and freight value of imported inputs.^{Footnote 277}

[316] The GOI states that the Duty Drawback Scheme aims to provide a refund to exporters of the customs and excise duties paid on inputs and raw materials or services for use in the production of exported products. The re-export of the imported goods is necessary to be eligible for the drawback. The GOI argues that Duty Drawback schemes are internationally accepted and are compliant with WTO obligations.^{Footnote 278}

[317] The GOI states that there is no provision of captive mining rights for minerals including iron ore and coal program. The GOI adds that the Mines and Minerals Development and Regulation Act does not provide any grant in the form of cash assistance, tax breaks or any other monetary assistance to entities.^{Footnote 279}

[318] The GOI submits that the purpose of the Maharashtra Packaged Incentive Scheme is to encourage the development of lesser developed regions and promote sustainable industrial growth throughout the State of Maharashtra. The GOI grants incentives to new and expanding industries through this scheme. To be eligible, industrial units must have commenced production, complied with certain provisions and invested the required fixed capital. The GOI argues that the Maharashtra Packaged Incentive Scheme is not a subsidy within the definition provided in the ASCM provisions.^{Footnote 280}

[319] The GOI argues that there is no purchase of hot-rolled steel or iron ore from state-owned enterprises for less than fair market value program in place.^{Footnote 281}

[320] The GOI states that the following programs have been discontinued and did not provide further details: Assistance to States for Developing Export Infrastructure and Allied Activities, Market Development Assistance, Brand Promotion and Quality, Test Houses, and Focus Market Scheme.^{Footnote 282}

[321] The GOI contends that the following programs do not exist and did not provide further details: Meeting Expenses for Statutory Compliances in Buyer Country for Trade-Related Matters, Towns of Export Excellence, and Research & Development Financial Assistance.^{Footnote 283}