Oil country tubular goods 2—OCTG2 2020 ER
Statement of Reasons: Expiry review determination

Product definition

[24] The goods subject to this expiry review are defined as:

Additional product information^{Footnote 17}

[25] The product definition includes “green tubes.” Green tubes, as they are commonly referred to in the OCTG industry, are intermediate or in-process tubing and casing which require additional processing, such as threading, heat-treatment or testing, before they can be used as fully finished oil and gas well casing or tubing in end-use applications.

[26] Pup joints, which are essentially short lengths of OCTG used for spacing in a drill string, are excluded where their length is 12 feet or below (with a three inch tolerance), as defined in the API 5CT specification.

Production process^{Footnote 18}

[27] OCTG may be manufactured by the seamless or electric welded (ERW) process. Typical casing and tubing end finishes include: plain end, beveled, external upset ends, threaded, or threaded and coupled (including proprietary premium connections).

[28] Premium or Proprietary connections refer to higher-end threading and coupling of the pipes. They are preferred by users who want to provide, for example, more reliable sealing under extreme loads and complex operating conditions, where standard connections may not suffice in maintaining the integrity of the pipe string.

[29] The seamless process begins with the formation of a central cavity in a solid steel billet to create a shell. The shell is then rolled on a retained mandrel and reduced in a stretch reduction mill to produce the finished size before cooling on a walking beam cooling bed.

[30] Algoma Tubes employs this production process, starting with its purchase of steel bars. The steel bar is cut into a billet and then loaded into the rotary furnace to be heated and ready for the Hot-Rolling Mill (HRM). Depending on the grade desired, the next process may involve heat-treatment. Finishing operations may include one or more of:

• Heat-treatment;
• Threading and coupling;
• Testing.

[31] All OCTG produced by Algoma Tubes are green tubes before they are finished. While Algoma Tubes has its own threading, coupling, and heat-treating capability, some of Algoma Tubes’ product is threaded and coupled at the Tenaris Hydril facility in Alberta with a premium connection.

[32] ERW OCTG is produced by slitting flat hot-rolled steel in coil form in a given thickness (skelp) to the proper width required to produce the desired pipe diameter. The skelp is then sent through a series of forming rolls that bend the steel into a tubular shape. As the edges come together under pressure in the final forming rolls, an electric current is passed between them. The resistance to the current heats the edges of the skelp to the welding temperature and the weld is formed as the two edges are pressed together.

[33] Evraz, Prudential and WTC all essentially employ the ERW production process. Evraz produces ERW OCTG in Canada at four separate facilities.

[34] Tube formed by either the seamless or the ERW methods is then cut-to-length. Depending on the API specifications required, OCTG may also be heat-treated at this point. The product is then sent to the finishing line where it is beveled and threaded on both ends. Tubing undergoes a separate process of upsetting and normalizing prior to threading. Finally, a coupling and coupling protector are applied to one end of the pipe and a thread protector is applied to the other end before it is ready for shipment. Finishing operations also include cooling, straightening, facing, testing, coating and/or bundling.

Canadian production

[46] Based on the apparent Canadian market figures in Table 1 above, sales of OCTG in Canada by the Canadian producers increased substantially from 2017 to 2018. In 2017, domestic sales totalled $549,655,518, and increased to $730,518,666 in 2018. In 2019, domestic sales fell to $519,334,430. This demonstrates that the Canadian producers’ domestic sales increased by 33% in 2018, before decreasing by 28.9% in 2019. These figures can be compared to the total apparent Canadian market, which increased by 6.6% from 2017 to 2018, before declining by 32.3% in 2019.

[47] On a production volume basis, Table 2 displays that domestic sales of OCTG in Canada by the Canadian producers increased from 338,281 MT in 2017 to 387,093 MT in 2018, before declining to 280,419 MT in 2019. This demonstrates domestic sales volume increased by 14.4% from 2017 to 2018, before declining by 38% in 2019. These figures can be contrasted with the total apparent Canadian market, which increased by 5.9% from 2017 to 2018, before declining by a further 31% in 2019.

[48] Based on the data presented in Table 2, the Canadian producers’ share of the apparent Canadian market, as a percentage of total volume, increased from 33.1% in 2017, to 40.2% in 2018, and finally to 42.3% in 2019.

Imports - named countries

[49] As seen in Table 1, during the POR, the total value of imports of subject goods from the named countries, as a percentage of the apparent Canadian market, increased from 0.84% in 2017 to 0.87% in 2018 and to 2.23% in 2019. As seen in Table 2, the volume of imports from the named countries, as a percentage of the apparent Canadian market, increased from 1.02% in 2017, to 1% in 2018, and finally to 2.52% in 2019. The data demonstrates that the imports of subject goods from the named countries increased in both absolute and relative terms throughout the POR.

Imports - other countries

[50] As seen in Table 1, the total dollar value of imports of OCTG from all other countries, as a percentage of the apparent Canadian market, decreased from 68.3% in 2017, to 60.7% in 2018 and to 54.8% in 2019. As seen in Table 2, the volume of imports from all other countries as a percentage of the apparent Canadian market, decreased from 65.8% in 2017, to 58.7% in 2018 and to 55.2% in 2019. The data shows that imports of OCTG from all other countries as a share of the apparent Canadian market decreased in both value and volume throughout the POR.

Parties contending that continued or resumed dumping is likely

[60] The Canadian producers made representations in their ERQ responses and in their case briefs supporting their position that dumping of certain OCTG from the named countries is likely to continue or resume should the CITT rescind its finding. Consequently, they argued that the anti-dumping measures should remain in place.

[61] Prior to undertaking a country-by-country analysis, certain factors, common to all named countries, were identified by the Canadian producers and can be summarized as follows:

• Impact on trade patterns of Chinese steel exports;
• Global Steel Excess Capacity;
• Global OCTG Excess Capacity;
• Canadian Market Conditions and the Oil Price Crash; and
• The Global Pandemic.

Parties contending that continued or resumed dumping is unlikely

[266] None of the parties expressly contended that resumed or continued dumping of subject goods from any of the named countries is unlikely should the CITT rescind its finding.

Chinese Taipei

[307] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in Chinese Taipei. The CBSA, therefore, relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Chinese Taipei is likely to resume or continue if the finding were to expire.

Producers of OCTG in Chinese Taipei

[308] Information on the record provided by the Canadian producers identified four OCTG producers in Chinese Taipei, namely, Chung Hung Steel Corp. (Chung Hung), Kao Hsing Chang Iron & Steel Corporation/Pintung Branch (Kao Hsing), Shin Yang Steel Co., Ltd. (Shin Yang), and Tension Steel Industries Co., Ltd. (Tension Steel).^{Footnote 250} Information on the record indicates that there are two other producers, namely, Chung Hung Steel Corporation Lukang Branch of Pipe & Tube Department (Chung Hung Steel Lukang), and Far East Machinery Co. Ltd. (Far East), who are licensed to manufacture OCTG in Chinese Taipei.^{Footnote 251}

[309] Information on the known active OCTG producers in Chinese Taipei was limited but some information regarding their OCTG output follows.

Chung Hung

[310] Chung Hung is a member of the China Steel Corporation Group and it was established in Kaohsiung City in 1983. Chung Hung’s main products include hot-rolled steel coils, cold-rolled steel coils, hot-dipped galvanized steel coils, JIS steel pipes, ASTM steel pipes, API steel pipes, and PE coated steel pipes.

[311] Chung Hung has a total of five production plants including the hot rolling department (designed annual capacity of 2.4 MMT), cold rolling department (designed annual capacity of 450,000 MT), Dafa steel pipe plant (designed capacity of 48,000 MT), and the pickling and galvanizing department.^{Footnote 252}

[312] Chung Hung participated in the CBSA’s original investigation^{Footnote 253} and the subsequent re-investigation^{Footnote 254} and received specific normal values. In the CBSA’s most recent re-investigation which concluded May 25, 2020, Chung Hung again participated and received specific normal values.^{Footnote 255}

Shin Yang

[313] Shin Yang, located in Kaohsiung, Chinese Taipei, is a manufacturer of OCTG with 10 pipe-forming manufacturing machines. According to Shin Yang’s website, it has an annual production capacity of 370,000 MT and claims to be the largest steel pipe and tube producer for both structural and ordinary piping in Chinese Taipei.^{Footnote 256}

[314] Shin Yang did not participate in the CBSA’s original investigation^{Footnote 257} but did in the subsequent re-investigation^{Footnote 258} and received specific normal values. In the CBSA’s most recent re-investigation which concluded May 25, 2020, Shin Yang again participated and received specific normal values.^{Footnote 259}

Tension Steel

[315] Tension Steel was established in 1980 and has further extended its manufacturing factories in HsinChu and GanShan in 1990 and 2004 respectively. Tension produces various products which include plate, hot and cold-rolled coils, carbon steel pipes, carbon steel rectangular pipe, API pipes, galvanize pipes, structural pipes, fire control pipes, and pipes used in the automotive industry. The core product produced by Tension is API pipes with an annual output of 60,000 MT.^{Footnote 260}

[316] Tension Steel participated in the CBSA’s original investigation^{Footnote 261} and the subsequent re-investigation^{Footnote 262} and received specific normal values. In the CBSA’s most recent re-investigation which concluded May 25, 2020, Tension Steel again participated and received specific normal values.^{Footnote 263}

Other facilities

[317] In addition to the three facilities described above, Chinese Taipei has three other facilities that are licensed by API 5CT to manufacture OCTG ERW casing and tubing.^{Footnote 264} There is no information on the record with respect to Far East and its production capacity. Information on the record indicates that Kao Hsing has a large capacity at its welded mill to produce OCTG, however, Kao Hsing has not participated in past CBSA proceedings.^{Footnote 265} Information on the record also indicates that in 2015, Chung Hung had open an affiliated plant, Chung Hung Steel Lukang, increasing capacity of welded products in Chinese Taipei by approximately 181,500 MT.^{Footnote 266}

Domestic market in Chinese Taipei

[318] In April 2020, the IMF reported Chinese Taipei’s real GDP growth in 2019 to be 2.7% and forecast 2020 to have a contraction of -4.0%, with a recovery in 2021 to 3.5%.^{Footnote 267}

[319] According to the OECD, steel production in Chinese Taipei recorded moderate growth, of 1.1% when comparing the first half of 2019 to the same period in 2018.^{Footnote 268}

[320] The World Steel Association (WSA) statistics report Chinese Taipei’s crude steel production has continued to grow up to 23.2 MMT in 2018 from 22.4 MMT in 2017. This ranks Chinese Taipei 12th in the world where leaders such as China has reportedly produced 928 MMT in the same period.^{Footnote 269}

[321] The WSA world steel figures also reported Chinese Taipei’s apparent steel use to remain relatively flat in 2018 at 17.9 MMT, compared to 17.7 MMT reported in 2017.^{Footnote 270}

[322] An article from the South China Morning Post published in April 2019 indicated that Chinese Taipei’s growth prospects are declining as the US-China trade war continues to place a strain on the domestic economy. The article also indicates that 77% of Chinese Taipei’s GDP is linked to exports.^{Footnote 271}

[323] The Canadian producers cited a steel industry report by Argus Media, indicating that Chinese Taipei is seeing imports of scrap metal in 2019 fall by 2.8% year-on-year. The decline was attributed to the weaker domestic steel demand and the decision by the Chinese Taipei government to hold off on funding large infrastructure projects.^{Footnote 272}

[324] The trend analysis indicates that Chinese Taipei’s production and consumption of steel will continue to remain relatively flat or decline in the near future as Chinese Taipei experiences volatility due to uncertainly tied to the resolution of the US-China trade war and the ongoing global pandemic.

Domestic OCTG market in Chinese Taipei

[325] There was limited information placed on the record in regards to OCTG manufacturing and sales in Chinese Taipei.

[326] According to MBR data, the domestic market for OCTG products in Chinese Taipei is insignificant. The apparent domestic consumption during the original investigation remained unchanged when compared to the POR. Chinese Taipei reportedly consumed a relatively low amount between 2013 and 2019. Domestic consumption is projected to remain consistent to previous years in 2020 and 2021.^{Footnote 273} This would indicate that OCTG producers in Chinese Taipei will continue to rely on export markets in the future.

Excess production capacity of OCTG in Chinese Taipei

[327] Confidential information available on the record provides an estimate of the combined production capacity of four Chinese Taipei companies producing tubular steel products. According the MBR data, of this capacity, approximately half is committed to OCTG production.^{Footnote 274}

[328] Chung Hung’s annual report indicates that there is an additional steel pipe facility, Chung Hung Steel Lukang, located in Changhua County that has a designed annual capacity of 200,000 MT.^{Footnote 275} This capacity does not appear to be reported by the MBR data, therefore, total tubular capacity in Chinese Taipei could be much higher.

[329] CBSA research and analysis estimates that the total production capacity of all OCTG producers in Chinese Taipei to be approximately 488,000 MT. In estimating the potential OCTG production capacity in Chinese Taipei, the CBSA relied on data published by MBR, annual reports from known OCTG producers in Chinese Taipei, and additional information on the administrative record. In addition, to include a reasonable amount of OCTG production for the Chung Hung Steel Lukang plant, the CBSA applied the same percentage of total effective OCTG capacity to total tubular capacity attributed to Chung Hung in the MBR report. This valuation would attribute an additional 118,000 MT of OCTG production capacity for Chinese Taipei.^{Footnote 276}

[330] With a combined estimated production capacity of 488,000 MT in Chinese Taipei, based on the CBSA’s statistics, this represents approximately 74% of the Canadian market in 2019.^{Footnote 277}

[331] With respect to Chinese Taipei producers capacity utilization rates, using MBR estimated domestic production of OCTG during the POR, it was estimated that producers operated with a capacity utilization rate of 45%, 32%, and 34% in 2017, 2018, and 2019 respectively.^{Footnote 278}

[332] Furthermore, Chung Hung indicated in its annual report that one of its tangible actions listed under its business policies is to “make full use of resources and equipment production capacity.”^{Footnote 279} With the reported low utilization rates by Chinese Taipei producers of OCTG and initiatives to increase capacity utilization rates, it is likely Chinese Taipei exporters will be seeking potential markets in order to sell their OCTG goods.

Exports from Chinese Taipei

[333] According to the World Steel Association 2019 World Steel Figures, Chinese Taipei was the world’s 13th largest steel exporter in 2018 with 12.3 MMT in steel exports. In comparison, the volume of Chinese Taipei’s steel exports was approximately 18% of the total volume of the world’s largest steel exporter China, with 68.8 MMT.^{Footnote 280}

[334] Since 2016, Chinese Taipei went from operating at a steel trade deficit to a steel trade surplus and has maintained a trade surplus that has amounted to 4.55 MMT in 2018.^{Footnote 281}

[335] The ITA Global Steel Monitor reports that Chinese Taipei steel producers export to more than 130 countries and territories, representing 52.6% of the Chinese Taipei’s total production in 2018.^{Footnote 282}

[336] With respect to pipe and tube products, of the 12.3 MMT of steel exports, approximately 4% (483,000 MT) are pipe and tube products. As noted in the ITA Global Steel Monitor, the US received the largest share of Chinese Taipei’s pipe and tube exports at 66% (321,000 MT), followed by Canada at 6% (30,000 MT).^{Footnote 283} This means that approximately 72% of total pipe and tube products exported from Chinese Taipei are destined for the North American market. This would demonstrate that Canada and the US are significant markets for Chinese Taipei pipe and tube exporters.

[337] Regarding OCTG specifically, MBR data indicates that Chinese Taipei export volumes have declined significantly following the period of the original investigation but rebounded in 2017 with projections to remain strong going forward. MBR forecasts OCTG exports to increase in 2020 and 2021, and to further increase in 2022.^{Footnote 284}

[338] Volumes of exports from Chinese Taipei during the POR are higher than levels seen during the original investigation and the projected export volumes of OCTG from Chinese Taipei are significant.

[339] Furthermore, a statement from Chung Hung’s 2018 annual report indicates that Chung Hung aims to expand to markets outside of the US for its steel pipe products and to continue to develop oil pipelines suitable for low-temperature environments.^{Footnote 285} This further demonstrates Chinese Taipei’s producers propensity to export and the likelihood that Canada could be a targeted market

CBSA data on exports from Chinese Taipei to Canada

[340] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period Chinese Taipei accounted for 2.5% of total imports.^{Footnote 286}

[341] In the original investigation, both exporting parties Chung Hung and Tension Steel participated and were found to be dumping. Chung Hung, Tension Steel, and Shin Yang were issued normal values via the 2015 re-investigation^{Footnote 287} and 2020 re-investigation.^{Footnote 288}

[342] During the POR, Chinese Taipei accounted for a very small amount of imports.^{Footnote 289} $59,145 in SIMA duties were collected on $3,868,341 worth of imports during the POR. Chinese Taipei accounted for no imports in 2017, 1,137 MT were imported with $50,482 in SIMA duties collected in 2018, and 1,662 MT with $8,662 in SIMA duties collected in 2019.^{Footnote 290}

[343] The continued dumping which took place in Canada during the POR would indicate that Chinese Taipei’s aggressive pricing behaviour respecting subject goods continues to persist in today’s market. Should the finding be rescinded, it appears reasonable to expect that Chinese Taipei exporters would continue to dump OCTG products into the Canadian market.

Trade measures against other Chinese Taipei steel products in Canada and other jurisdictions

[344] Canada has four other anti-dumping measures in effect against steel products from Chinese Taipei.^{Footnote 291}

[345] Evidence on the record documents several anti-dumping measures against Chinese Taipei exporters in other jurisdictions respecting various steel products.

[346] A list of these measures are provided below and is separated into two sections, measures relating to pipe and tube products and measures pertaining to other steel products.

[347] It should be noted that the above table only provides a sample of ongoing trade remedies against Chinese Taipei’s steel sector. According to the May 2019 ITA Global Steel Trade Monitor Report on Chinese Taipei steel exports, there are currently 41 anti-dumping trade remedies in effect against steel products from Chinese Taipei, the US representing 13 of these cases.^{Footnote 293}

[348] It is evident by the numerous measures currently in place by Canada and other jurisdictions that Chinese Taipei exporters have a propensity to dump steel products.

Determination regarding likelihood of continued or resumed dumping from Chinese Taipei

[349] Based on the information on the administrative record in respect of: the substantial excess production capacity in Chinese Taipei; OCTG producers’ dependence on exports; Chinese Taipei’s exporters inability to sell OCTG to Canada at non-dumped prices during the POR; and the propensity to dump as evidenced by the numerous anti-dumping measures concerning steel products in both Canada and other jurisdictions, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Chinese Taipei.

India

[350] The CBSA relied on the information submitted by Maharashtra Seamless Ltd. and their related exporter, GVN Fuels,^{Footnote 294} the Canadian producers as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to India. No case briefs or reply submissions from exporters in India were received. Both parties also participated in the original investigation, the 2015 re-investigation^{Footnote 295} and in the most recent re-investigation, which concluded on May 25, 2020.^{Footnote 296}

Producers of OCTG in India

[351] According to information on the record, there are five actively licensed production facilities for OCTG in India.

Indian Seamless Metal Tubes (ISMT)

[352] According to protected information from MBR, ISMT is capable of producing significant amounts of seamless OCTG per year at its Maharashtra facility. The company can produce up to 9.625 inches in outside diameter.

[353] ISMT can produce both tubing and casing, including heat-treated grades. The company exports to the United States and Middle East.^{Footnote 297}

[354] The company participated in the most recent re-investigation, which concluded on May 25, 2020.^{Footnote 298}

Jindal Saw Limited (JSL)

[355] Similar to ISMT, JSL is capable of producing significant amounts of seamless OCTG at its Nashik facility. The company can produce between 2.325 and 7 inches in outside diameter.^{Footnote 299} JSL can produce both low and high-strength tubing and casing.^{Footnote 300}

[356] The company participated in the original investigation, the 2015 re-investigation^{Footnote 301} and in the most recent re-investigation which concluded May 25, 2020.^{Footnote 302}

Maharashtra Seamless Ltd. (two facilities)

[357] Maharashtra Seamless Ltd. (Maharashtra Seamless) is India’s largest OCTG producer, with two facilities. Information from MBR reported that the seamless facility is capable of producing more seamless OCTG per year than any other Indian producer, including heat-treated grades, while the ERW facility can produce significant quantities of ERW OCTG per year as well.^{Footnote 303}

[358] The ERQ response from Maharashtra Seamless, however, provided different capacity figures but did not change the fact that the company has a massive capacity to produce OCTG and other tubular goods.^{Footnote 304}

[359] According to the company, the seamless plant produces OCTG ranging from 2.375 inches to 13.375 inches in outside diameter. The ERW plant produces OCTG ranging from 8.625 to 13.375 inches in outside diameter.^{Footnote 305}

Oil Country Tubular Ltd. (OCTL)

[360] According to MBR, OCTL is capable of producing a large quantity of seamless OCTG at its Nalgonda facility. The facility can produce between 2.375 and 13.375 inches outside diameter.^{Footnote 306}

Other potential Indian producers

[361] Although no information was available on the record of actual production, the following three pipe manufactures in India are licensed by the American Petroleum Institute (API) to manufacture API-5CT specification, low-strength ERW casing and tubing (plain end):^{Footnote 307}

• Ratnamani Metals & Tubes Ltd.^{Footnote 308}
• Surya Roshni Ltd.^{Footnote 309}
• Tata Steel BSL Ltd.^{Footnote 310}

[362] India also has an abundance of facilities which are licensed by API 5CT to further process and/or thread OCTG. Information on the record indicates there are at least 11 such licensed and active facilities in India.^{Footnote 311} The inclusion of these parties vastly increases the export potential from India beyond the facilities licensed to manufacture OCTG from raw material such as HRC (ERW) or billet (seamless).

Domestic market in India

[363] In considering data from the first half of 2019, the OECD forecasted GDP growth in India to remain strong, reaching 7.2% in 2019 and 7.4% in 2020. Robust growth supported by public sector projects (e.g. infrastructure) were cited as key reasons for this projection.”^{Footnote 312}

[364] Later in 2019, reports of India’s domestic economic situation changed as there had been a slowing of growth and a decline in demand for oil.^{Footnote 313}

[365] By April 2020, the sentiment had further changed for India’s economy, given the world circumstances, as the IMF forecasted India’s GDP growth in 2020 to be a modest 1.9%, with a significant uptick in 2021 to 7.4%.^{Footnote 314}

[366] Information on the record from the World Steel Organization from 2018 indicates that India is the second largest producer of crude steel in the world at 106.5 MMT per year. Over that period, India reportedly consumed 96 MMT of finished steel. China, by comparison, is the number one producer of crude steel at 928.3 MMT per year and the number one user at 835 MMT.^{Footnote 315}

[367] More recent information from the OECD reported that India’s steel production grew 5% in the first half of 2019 in comparison to the same period in 2018.^{Footnote 316}

[368] Reports on the record project a decline in automotive and manufacturing demand in India, which would result in lower paced demand growth for steel.^{Footnote 317} Even with such a decline, India still projects to have the largest domestic market for steel in Asia, outside of China.

Domestic OCTG market in India

[369] Information on the record reports that apparent consumption of OCTG in India has grown over the 2017-2019 period, continuing the recovery from its trough in 2015.^{Footnote 318}

[370] The Indian OCTG market is clearly one of the largest in the world. Information on the record ranked India the sixth largest OCTG market, behind the United States, China, Russia, Canada and Saudi Arabia.^{Footnote 319}

[371] Other information on the record reinforces the size of the Indian OCTG market, as a Jindal Saw – Hunting Energy partnership seeks to supply the Indian market for premium connection goods, currently supplied 100% by imports. This market segment is estimated to be valued at $200 million USD. In terms of what this could equate to in volume, a high-value estimate of $2,000 USD/MT would translate to 100,000 MT of the market. In regards to the partnership, a report on the record stated:

[372] MBR data supports the magnitude of imports in the Indian OCTG market and projects that Indian producers will increase production and sales to the domestic market from 2019 to 2020 and then slightly more in 2021.^{Footnote 321}

[373] Given Maharashtra Seamless’ estimates the domestic market, it is likely that substantial tonnage will be available to export, given that the production and import projections are more than likely well beyond what the market can absorb.

[374] Information on the record regarding pricing in the Indian domestic market was limited.^{Footnote 322} There was no breakdown of Maharashtra Seamless’ OCTG sales into seamless versus ERW or by grade to permit a more detailed analysis.

Excess production capacity of OCTG in India

[375] Information on the record rates India’s practical OCTG capacity at larger than the entire Canadian market.^{Footnote 323}

[376] Over the three-year 2017-19 period, production of OCTG in India was reportedly significantly below that capacity threshold and despite projected upticks is expected to remain significantly below capacity in 2020 and 2021.^{Footnote 324}

[377] The actual volume of excess capacity could be well over half the size of the Canadian market.^{Footnote 325}

Production of other goods in India

[378] India’s OCTG facilities have the capability to produce other seamless and welded pipes that are currently used for non-OCTG products. Information on the record indicates that the country’s estimated capacity for tubular goods overall is well beyond just its OCTG capacity,^{Footnote 326} and more than twice the size of the estimated Canadian market for OCTG.

Exports from India

[379] Going back to 2009, India’s steel exports are typically around 10% of total production.^{Footnote 327}

[380] Information on the record from the most recent period available, reports that in 2018, India exported 10.6 MMT of steel, a decrease from the 15.9 MMT exported in 2017. Pipe and tube products accounted for a reported 1 MMT of exports in 2018. Canada was the second highest volume destination for pipe and tube in 2018, at roughly 110,000 MT behind Nigeria and ahead of the United States.^{Footnote 328}

[381] Information on the record indicates that India’s export decreases were nearly across all top destinations:

[382] In terms of steel tubular products, data on the record which consolidates India’s exports of both seamless (7304) and welded (7306) tubes demonstrates India’s consistently strong export of steel tubulars, particularly in the welded classification:^{Footnote 330}

[383] Regarding OCTG specifically, information on the record consolidated by the Canadian producers from the Global Trade Atlas at the 8-digit HS classification level, indicates that India actively sells OCTG to export markets. That information also indicates that Canada is India’s number one export market for OCTG.^{Footnote 331}

[384] Since the data cited by the Canadian producers from the Global Trade Atlas includes information that is not reconcilable to Canada’s tariff classification system, this dataset may be incomplete or include goods that are non-subject seamless and welded tubes. As such MBR data specific to OCTG was favoured in analyzing India’s exports.^{Footnote 332}

[385] The MBR data reveals that India’s export volumes of OCTG have declined since the period of the original investigation but remain significant.^{Footnote 333}

[386] Protected information submitted from Maharashtra Seamless demonstrates that Canada is still an import export market for India.^{Footnote 334}

Evidence of dumping and CBSA data on exports from India to Canada

[387] The original investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, India accounted for 1.3% of total imports.^{Footnote 335} Neither of the two participating exporters, namely, Maharashtra Seamless (exported through GVN Fuels) nor JSL were found to be dumping. Those companies have been issued normal values since the conclusion of the original investigation.^{Footnote 336}

[388] According to the CBSA’s import and enforcement statistics, over the three-year POR for this expiry review (2017-2019), India accounted for 0.45% of imports.^{Footnote 337} In the most recent full-year period of 2019, India accounted for 1.9% of imports.^{Footnote 338}

[389] The CBSA’s statistics report that the volume of subject goods exported to Canada from India in 2019 was 7,161 MT at a value of $10,365,344 and the CBSA assessed $23,815 in SIMA duties.^{Footnote 339}

[390] The Canadian producers cited “active and widespread participation by Indian OCTG producers in the NVR” as evidence of a “clear and demonstrated interest in the Canadian market.”^{Footnote 340}

[391] The Canadian producers also cited “stale-dated normal values,” the result of the CBSA not conducting a re-investigation of normal values since December 2015, as the reason subject goods from India began to re-enter the Canadian market starting in 2017.^{Footnote 341}

[392] The Canadian producers did not cite any evidence to support the position that the “stale-dated” normal values were favourable to the exporters (i.e. lower than they would otherwise be) based on conditions in their home market.

[393] However, information submitted by Maharashtra Seamless/GVN Fuels does indicate subject goods exported from India were dumped during the period of review.^{Footnote 342}

Measures against other Indian steel products in Canada

[394] India has a history of dumping steel into Canada, given the SIMA measures against three other Indian steel products. These products are carbon steel welded pipe (both dumping and subsidy – 2012), corrosion-resistant steel sheet (dumping – 2019) and hot-rolled steel sheet (subsidy – 2001).^{Footnote 343}

Trade measures in other jurisdictions against India

[395] Information on the record indicates that only the United States has anti-dumping measures against India for OCTG.”^{Footnote 344}

[396] On March 4, 2020, the US Department of Commerce (USDOC) completed its sunset review and continued its anti-dumping measures on OCTG from India, South Korea, Turkey and Vietnam, determining that the expiration of the measures would be likely to lead to continuation or recurrence of dumping.^{Footnote 345}

[397] Other anti-dumping measures noted on the record concerning India are in Mexico for carbon steel tubing products and in the United States for welded carbon steel standard pipe, welded stainless pressure pipe, cold-drawn mechanical tubing of carbon and alloy steel and large diameter welded pipe.^{Footnote 346}

[398] Given that the United States already has anti-dumping measures on OCTG from India, it is uncertain as to whether the US section 232 tariffs have had a compounding effect on the decrease in exports of OCTG from India to the United States. However, according to the information on the record, the trend in exports over the POR does show a substantial drop in exports such that by 2019, there were almost no reported OCTG exports from India to the United States.^{Footnote 347}

[399] Trade measures in the United States given its proximity to Canada, pose a significant threat that the goods previously destined for that market may be diverted to Canada if the trade measures were removed.

Evidence of India dumping in other markets

[400] The Canadian producers cited export data which was submitted as evidence that India would sell its OCTG at substantially lower prices than what it presently sells to Canada, if left unrestrained by the CITT finding.^{Footnote 348}

[401] However, the CBSA’s review of the protected source information revealed that the information cited is inconclusive as it relates to the likelihood of dumping and has questionable reliability as it pertains to unit-selling prices.

[402] As such, the CBSA did not consider the export data provided by the producers to conclusively demonstrate that India would dump OCTG into its export markets if measures were removed.

Determination regarding likelihood of continued or resumed dumping from India

[403] Based on the information on the administrative record in respect of: weakening economic conditions, including in the weakening demand for oil in India; the large excess capacity to produce OCTG; a projected growth in OCTG exports, exacerbated by a weakening currency which encourages exports; evidence which demonstrates a major exporter dumped OCTG into Canada in 2019; anti-dumping measures on Indian welded pipe in Canada indicating a propensity to dump tubular goods; and the threat of divergence of OCTG given the recent renewal of anti-dumping measures and presence of section 232 tariffs in the United States, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from India.

Indonesia

[404] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in Indonesia. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Indonesia is likely to resume or continue if the finding were to expire

Producers of OCTG in Indonesia

[405] Information on the record identified two active OCTG producers in Indonesia, namely, PT Citra Tubindo (Citra Tubindo) and PT Bakrie Pipe Industries (Bakrie Pipe).^{Footnote 349} Information on the record also indicated that two other producers, namely, PT KHI Pipe Industries and PT Rainbow Tubulars are licensed OCTG manufactures in Indonesia.^{Footnote 350}

[406] Information on the known active OCTG producers in Indonesia was limited but some information regarding their OCTG output follows.

Citra Tubindo

[407] According to the company’s annual report, Citra Tubindo’s heat-treatment facility can accommodate 120,000 MT per year for pipes with outside diameters ranging from 2.375 to 13.375 inches, for standards which include API 5CT, while the threading capacity of the facility is 300,000 MT per year.^{Footnote 351}

[408] Citra Tubindo participated in the original investigation, a normal value review which concluded in 2019 ^{Footnote 352} and the re-investigation which concluded May 25, 2020.^{Footnote 353}

Bakrie Pipe

[409] Bakrie Pipe claims to be the “largest and prominent steel pipe manufacturer in Indonesia” with a pipe manufacturing capacity of around 310,000 MT.^{Footnote 354} The company has five facilities in Indonesia, which manufacture welded pipes, including OCTG and can produce pipes in outside diameters ranging from ½ to 24 inches.

[410] Bakrie Pipe has not previously participated in any CBSA process related to the subject goods.

Other facilities

[411] Indonesia also has numerous facilities which are licensed by API 5CT to further process and thread OCTG. Information on the record indicates there are at least 36 such licensed facilities in Indonesia.f3n55 The inclusion of these parties vastly increases the export potential from Indonesia^{Footnote 355}beyond the facilities licensed to manufacture from raw material such as HRC (ERW) or billet (seamless).

Domestic market in Indonesia

[412] According to data from the OECD, in Q4-2019, real GDP growth in Indonesia was projected to be 5.1% in each of 2019 and 2020.^{Footnote 356}

[413] In April 2020, the IMF reported Indonesia’s real GDP growth in 2019 to be 5% and forecast 2020 to be a modest 0.5%, with a significant uptick in 2021 to 8.2%.^{Footnote 357}

[414] According to the OECD, steel demand in Indonesia recorded strong growth, of 11% in 2018, mainly driven by the construction sector.^{Footnote 358}

[415] Indonesia’s steel consumption reportedly reached 15.1 MMT in 2018, up 17.1% from the 12.9 MMT reportedly consumed in 2014, according to data from the Indonesian Iron and Steel Industry Association (IISIA).^{Footnote 359} The IISIA “forecasts that domestic steel demand could continue to grow by 6% in 2019, supported by the residential and non-residential buildings sector as a result of rapid urbanisation and industrialisation.”^{Footnote 360}

[416] Another report cited from the IISIA stated that Indonesia’s annual steel consumption was now 20.3 MMT.^{Footnote 361}

[417] The IISIA expects this growth to continue and potentially reach 22.7 MMT by 2024, which would represent an increase of about 50% over 2018.^{Footnote 362}

[418] Information on the record regarding Indonesia’s steel production varies depending on the source.

[419] World Steel Association (WSA) statistics report Indonesia’s crude steel production has grown substantially in recent years up to 6.2 MMT in 2018 but is still far behind world leaders such as Japan with 105 MMT or China which reportedly produced 928 MMT in the same period.^{Footnote 363}

[420] Indonesia’s strength in steel production is in downstream goods, as many of its steel inputs are imported from other countries, such as China. For example, while Indonesia’s crude steel production was only 6.2 MMT, its production of hot-rolled products reported by the WSA for 2018 was over 10 MMT.^{Footnote 364}

[421] Information reported by an official of the IISIA stated that Indonesia produces 17 MMT of steel per year, considerably more than what appears to be reported by the WSA. The IISIA may be combining crude steel and finished steel figures to arrive at its total.^{Footnote 365}

[422] Regardless of the precise numbers respecting output and consumption, the trend analysis indicates that Indonesia’s production and consumption of steel is growing and is projected to further grow in the near future.

Domestic OCTG market in Indonesia

[423] There was limited information placed on the record in regards to OCTG manufacturing and sales in Indonesia.

[424] According to MBR data, Indonesia’s apparent domestic consumption of OCTG in 2019 is considerably less than it was at the time of the original investigation.^{Footnote 366}

[425] The MBR data on the record does not appear to consider Indonesia an OCTG “producing” country (i.e. domestic shipments are “zero”), presumably because the country may not manufacture the input tube, notwithstanding facilities licensed to do so under API 5CT. As such, the country’s consumption estimate according to MBR is based solely on imports minus exports.^{Footnote 367}

[426] MBR projects domestic consumption of OCTG in Indonesia to increase in 2020 and 2021.^{Footnote 368} So while the projection for the domestic market for OCTG in Indonesia is strengthening, it is still substantially lower than it was at the time of the original investigation, increasing the likelihood that the country would once again want to sell to Canada in the event the finding were rescinded.

Excess production capacity of OCTG in Indonesia

[427] There is no information on the record on Indonesian production and capacity specifically for OCTG via MBR or other trade report. As earlier noted, the MBR data on the record does not appear to consider Indonesian OCTG output as domestic “production,” presumably because the country may not manufacture the input tube, notwithstanding facilities that are licensed to do so.

[428] However, information from Citra Tubindo did indicate that:

[429] Citra’s ability to produce high-strength, heat-treated grades is particularly appealing to the Canadian market where drilling in harsher conditions has increased in recent years, commanding less interest in lower-grade products than previously.^{Footnote 370}

[430] Similarly, Bakrie Pipe states that its processing plant can achieve around 310,000 MT annual capacity.^{Footnote 371}

[431] The total shipments of OCTG from Indonesia reported by MBR in comparison to the capacity information above for these two producers alone reveal a large unused capacity to produce OCTG in Indonesia.

Pressure to increase pipe production due to HRC oversupply in Indonesia

[432] As noted earlier, Indonesia is a prime destination for Chinese HRC, the primary input when manufacturing ERW OCTG.^{Footnote 372} This concern was raised by the Indonesian Iron and Steel Industry Association (IISIA) in 2019. According to the IISIA, from January to March 2019, imports of steel from China, particularly HRC, increased 83% [year-on-year] to 147,000 MT.^{Footnote 373} The association has petitioned the government of Indonesia to provide protection from China oversupplying the Indonesian steel market.^{Footnote 374}

[433] The influx of Chinese HRC has created an oversupply of the material in Indonesia, making it attractive for pipe manufactures to increase their production and capacity utilization at their facilities. Such increases would make additional volumes available for export markets, including Canada.

Exports from Indonesia

[434] According to the World Steel Association (WSA), Indonesia’s exports of semi-finished and finished steel products in 2018 was 3.8 MMT.^{Footnote 375} According to the South East Asia Iron and Steel Institute (SEAISI), finished steel exports from Indonesia alone rose 42% year-on-year to 1.6 MMT in the first six months of 2019.^{Footnote 376}

[435] In terms of tubular products specifically, the information on the record reveals that Indonesia has a significant presence on the export market.

[436] Data on the record, which consolidates Indonesia’s exports of both seamless (7304) and welded (7306) pipes, demonstrates Indonesia’s strong exports of steel tubulars, particularly in the seamless classification:^{Footnote 377}

[437] Regarding OCTG specifically, information on the record consolidated by the Canadian producers from the Global Trade Atlas at the 8-digit HS classification level, indicates that Indonesia also actively sells OCTG to export markets.^{Footnote 378}

[438] Since the data cited by the Canadian producers from the Global Trade Atlas includes information that is not reconcilable to Canada’s tariff classification system, this dataset may be incomplete or include goods that are non-subject seamless and welded tubes. As such, MBR data specific to OCTG was favoured in analyzing Indonesia’s exports.^{Footnote 379}

[439] The MBR data reveals that while Indonesia’s export volumes of OCTG have declined since the period of the original investigation, they are projected to rise substantially and be strong going forward.^{Footnote 380}

[440] While not quite at the levels seen during the original investigation, these export volumes are comparable and the projected export volumes of OCTG from Indonesia are significant. By comparison, MBR’s projection for 2020 and 2021 are more than twice as much as the projected volumes of Indian exports over the same period.^{Footnote 381} Given Indonesia’s continuing interest in the Canadian OCTG market, such volumes are a threat to the Canadian market should the finding be rescinded.

CBSA data on exports from Indonesia to Canada

[441] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, Indonesia accounted for 1.9% of total imports.^{Footnote 382}

[442] In the original investigation, the only participating exporter, Citra Tubindo, was found to be dumping. Citra Tubindo has since been issued normal values via the 2019 normal value review and 2020 re-investigation.^{Footnote 383} No other Indonesian exporter has been issued normal values since the conclusion of the original investigation according to the information on the record.

[443] Over the three-year period of review (POR) for this expiry review (2017-2019), Indonesia accounted for a very small amount of imports.^{Footnote 384} $1,780 CAD in SIMA duties were collected during the POR, all in 2017. In the most recent full-year period of 2019, Indonesia accounted for no imports according to the CBSA’s import and enforcement statistics.

[444] Considering the company’s continued interest in the Canadian market through its participation in re-investigations of normal values, Citra Tubindo’s lack of exports from Indonesia suggests an inability to compete at the normal values issued to the company.

Trade measures against other Indonesian steel products in Canada and abroad

[445] Canada’s only other anti-dumping measures in Canada against steel products from Indonesia concern certain Steel Plate (2014).^{Footnote 385}

[446] Other than Canada, information on the record indicates that Turkey has anti-dumping measures against Indonesian steel for “tube or pipe fittings.”^{Footnote 386}

Evidence of Indonesia dumping in other markets

[447] The Canadian producers cited information from UN Comtrade that they said demonstrates that Indonesia sells OCTG at substantially lower prices to markets unprotected by trade measures than it has to Canada.

[448] The UN Comtrade data provided by the Canadian producers was not provided in a format which could allow the CBSA to practicably analyze the raw information from which the tables were created.^{Footnote 387} The raw data clearly contains seamless and welded OCTG, making country-to-country comparisons difficult, as it is unclear what product mix was sold to each country. The fact that the information is from 2018 also makes the data less timely and of less value.^{Footnote 388}

[449] The CBSA does note that the 2018 average unit-selling price of apparent OCTG from Indonesia to Canada of $2,969 CAD/MT^{Footnote 389} is considerably higher than the official enforcement figures released by the CBSA of $2,645 CAD/MT for the same year.^{Footnote 390}

[450] Average prices to other markets protected by trade measures also raise questions as to the accuracy of this data set. For example, in the same 2018 period, the average unit-selling price to the United States was only $1,330 CAD/MT and was $28,637 CAD/MT to Spain.^{Footnote 391}

[451] Consequently, the CBSA found this information inconclusive as to Indonesian exporters’ pattern of pricing behaviour in other markets in respect of OCTG over the POR.

Determination regarding likelihood of continued or resumed dumping from Indonesia

[452] Based on the information on the administrative record in respect of: the number of potential Indonesian exporters of OCTG; the excess capacity to produce OCTG, including heat-treated grades; the pressure to increase pipe production due to an oversupply of HRC; the export dependence and forecasted increases in exports of OCTG in 2020 and beyond; and the inability to sell OCTG to Canada at non-dumped prices, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Indonesia.

The Philippines

[453] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in the Philippines. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from the Philippines is likely to resume or continue if the finding were to expire.

Producers of OCTG in the Philippines

[454] Information on the record identified one active and licensed OCTG producer in the Philippines, namely, HLD Clark Steel Pipe Co., Inc. (HLD Clark).

HLD Clark

[455] Protected information available from MBR provided HLD Clark’s total tubular capacity along with its effective OCTG capacity. The company produces ERW pipe, ranging from 2.38 and 20 inches in outside diameter and dedicates the remaining capacity to the production of line pipe.^{Footnote 392}

[456] HLD Clark participated in the original investigation, the 2015 re-investigation,^{Footnote 393} a normal value review which concluded in 2019^{Footnote 394} and the re-investigation which concluded on May 25, 2020.^{Footnote 395}

Domestic market in the Philippines

[457] The GDP of the Philippines grew by 5.6% in the first quarter of 2020, compared to growth of 6.3% experienced in the previous quarter.^{Footnote 396}

[458] Prior to 2015, imports of steel products displayed moderate annual growth, with imports totaling 1.3 MMT in 2009 and increasing to 2.3 MMT in 2014. By 2015, imports of steel products experienced rapid growth, rising to 3.2 MMT in 2015, before surging to 8.1 MMT in 2016 and 2017 and 9.1 MMT in 2018.^{Footnote 397}

[459] More recently, the Philippines has relied heavily on imports of steel to satisfy domestic consumption. The country is the world’s 17th largest steel importer, having imported a total value of $5.6 billion USD, which represents an increase over 2017 of 41% by value. The Philippines imports steel from more than 50 countries, with the majority coming from China, Russia, and Japan.^{Footnote 398} In 2018, 47% of steel imported by the Philippines originated in China.^{Footnote 399}

[460] Apparent steel consumption (i.e. demand) has increasingly outpaced production since 2009, reaching 9.5 MMT in 2017, in comparison to production of only 1.4 MMT.^{Footnote 400}

[461] In addition to steel pipe producer HLD Clark, the Philippines maintains three steel-making companies: Steelasia Manufacturing Corp., Treasure Steelworks Corp. and Stronghold Steel. There are also a number of rolling mills, which produce long, flat, and wire products, pipe and tube, and galvanized products.^{Footnote 401}

[462] Given the high domestic demand for steel, it is not likely that steel facilities would dedicate steel making capacity for the production of inputs for OCTG destined for export, or OCTG for export.

Strong domestic OCTG market in the Philippines

[463] In 2019, total production of OCTG was 51,000 MT and is forecasted to remain at this level for both 2020 and 2021. It should be noted that production forecasts were made prior to the global pandemic, which could result in lower production due to temporarily halted production.^{Footnote 402}

[464] Domestic consumption of OCTG in the Philippines has ranged between 6,600 MT to 16,800 MT while the finding has been in place. MBR forecasts consumption figures to increase dramatically over the next several years.^{Footnote 403} According to the MBR projections, annual consumption of OCTG will match annual production by 2023 and exceed it from that point onwards to 2025.

[465] Of the nine countries subject to the finding, the Philippines has both the lowest annual production capacity and annual production of OCTG. The CBSA’s estimated Canadian market for OCTG in 2019 was roughly 663,000 MT as per Table 2 of this report. As such, the Philippines annual OCTG production represents only a small proportion when compared to the total Canadian market. When considered alongside the strong growth in domestic consumption and steady levels of production, it can be seen that the likelihood of dumping of OCTG from the Philippines is decreased.

Excess production capacity of OCTG in the Philippines

[466] Despite the effective OCTG capacity in the Philippines, its production is forecasted to be flat for the next five years. According to MBR, remaining excess capacity is dedicated to the production of line pipe.^{Footnote 404} As such, the excess capacity for OCTG is purely theoretical, as there is no evidence historically or moving forward that this theoretical excess would be used for OCTG.

Exports of steel from the Philippines

[467] The Philippines maintains an export rule, through the Philippine Economic Zone Authority (PEZA), requiring mills to export 70% of production to qualify for an export tax credit. However, PEZA is open to negotiation of the export percentage in order to balance domestic needs.^{Footnote 405}

[468] While steel exports from the Philippines have remained low for years, recent investments from China suggest that both steel production and exports may be increased in the coming years as steel mills begin production.

Exports of OCTG from the Philippines

[469] When compared to CBSA enforcement data, UN Comtrade data placed on the record does not appear to accurately depict exports of OCTG from the Philippines.^{Footnote 406} As a result, MBR data placed on the record was favoured for the purposes of Philippine export analysis.

[470] According to MBR, exports of OCTG from the Philippines are substantially lower than the time of the original investigation. Estimated quantities exported in 2019 are projected to be maintained each year from 2020 through 2025.^{Footnote 407}

[471] The decrease in export emphasis is reflected in the aforementioned projected growth in domestic consumption of OCTG, which will alleviate export pressures seen in other countries that do not have a domestic market let alone one projected to grow substantially in the coming years.

CBSA data on exports from the Philippines to Canada

[472] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, the Philippines accounted for 2.4% of total imports.^{Footnote 408}

[473] In the original investigation, the participating exporter and sole producer of OCTG in the Philippines, HLD Clark, was not found to be dumping. HLD Clark has had normal values since the final determination and through the latest re-investigation, which concluded May 25, 2020.^{Footnote 409}

[474] Throughout the POR, the Philippines continued to export subject goods to Canada. In 2017, imports of subject goods totaled 7,951 MT and $10,359,421 CAD. In 2018, imports of subject goods decreased slightly to 6,953 MT and to $10,134,559 CAD. In 2019, imports of subject goods increased to 7,837 MT and to $14,614,813 CAD.^{Footnote 410}

[475] While imports of subject goods from the Philippines totalled $35,108,793 CAD during the POR, SIMA duties of only $2,434 CAD^{Footnote 411} were collected over the same period. Such an insignificant amount of SIMA duties incurred on such a large amount of Philippine exports demonstrates the ability of the Philippines to compete in the Canadian market while selling OCTG at or above normal values.^{Footnote 412}

Evidence of the Philippines dumping in other markets

[476] There was no evidence on the record of trade measures in effect against the Philippines for OCTG in other markets. Consequently, not only does the evidence on the record indicate that the lone Philippine producer has essentially not dumped OCTG into Canada dating back to the original investigation, in spite of commercially significant sales volumes but the absence of trade measures in other markets also strongly indicates they have not dumped OCTG in other markets as well, including the United States.

Determination regarding likelihood of continued or resumed dumping from the Philippines

[477] Based on the information on the administrative record in respect of: the lone Philippine producer of OCTG, HLD Clark and their low volume production of OCTG; strong projected domestic consumption of OCTG; decreased emphasis on exports in comparison to the period of the original investigation; absence of dumping from HLD Clark and demonstrated ability to compete at normal values during the POR; lack of trade measures against exports of OCTG from the Philippines in other markets; and a lack of any compelling evidence which suggests the Philippines would revert to dumping in absence of the finding, the CBSA determined that the expiry of the finding is unlikely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from the Philippines.

South Korea

[478] 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 by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from South Korea is likely to resume or continue if the finding were to expire.

Producers of OCTG in South Korea

[479] Information on the record provided by the Canadian producers identified three OCTG producers in South Korea, namely, Husteel Co., Ltd. (Husteel), Nexteel Co., Ltd. (Nexteel), and SeAH Steel Corp. (SeAH).^{Footnote 413} Information on the record indicates that there are six other producers, namely, Aju Besteel Co. Ltd. (Aju Besteel), Dongbu Incheon Steel (Dongbu), Hyundai Steel (Hyundai), Iljin Steel Corporation (Iljin Steel), Kum Kang Kind, Co., Ltd. (Kum Kang) who are licensed to manufacture OCTG in South Korea.^{Footnote 414} MBR data on the record identifies an additional producer, Yonghyun Base Materials Co., Ltd.^{Footnote 415}

[480] Information on the known active OCTG producers in South Korea was limited.

Husteel

[481] Husteel has two mills operating out of Incheon, South Korea. Confidential information on the administrative record provides details with respect to the mills’ total tubular capacity of ERW and estimated total OCTG capacity.^{Footnote 416}

[482] Husteel did not participate in the CBSA’s original investigation nor in its subsequent re-investigations concluding in 2015 and 2020. Husteel has not received any specific normal values.

Nexteel

[483] Nexteel is a South Korean based ERW producer with a large tubular capacity. According to confidential information on the administrative record, approximately half of its estimated total capacity is dedicated to OCTG production. Nexteel facilities have two threading lines, and have capabilities to quench and temper, along with annealing heat treatment capacity.^{Footnote 417}

[484] Nexteel did not participate in the CBSA’s original investigation but did so in the subsequent re-investigation^{Footnote 418} and received specific normal values. In the CBSA’s most recent re-investigation which concluded May 25, 2020, Nexteel did not participate, therefore, did not receive specific normal values.^{Footnote 419}

SeAH

[485] According the MBR, it is estimated that SeAH group has significant capacity to produce ERW pipe at its various South Korean mills.^{Footnote 420}

[486] SeAH participated in the CBSA’s original investigation^{Footnote 421} and the subsequent re-investigation^{Footnote 422} and received specific normal values. In the CBSA’s most recent re-investigation which concluded May 25, 2020, SeAH again participated and received specific normal values.^{Footnote 423}

Other facilities

[487] In addition to the companies described above, there are five other companies that are licensed by API 5CT to manufacture OCTG ERW casing and tubing, including one licensed to produce seamless casing and tubing.^{Footnote 424} These companies have significant capacity to produce OCTG that could vastly increase the export potential from South Korea.

Domestic market in South Korea

[488] According to data available from the OECD in Q4-2019, real GDP growth in South Korea was projected to be 2.4% and 2.5% in 2019 and 2020 respectively. This represents a gradual contraction with real GDP growth reportedly 3.1% and 2.7% in 2017 and 2018 respectively.^{Footnote 425}

[489] According to the Business Times, in October 2019, the Bank of Korea cut its policy interest rate for the second time in three months to a record low of 1.25% to support a faltering economy, and indicated that further easing may occur.^{Footnote 426}

[490] In April 2020, the IMF reported South Korea’s real GDP growth in 2019 to be 2.0% and forecast 2020 to be -1.2%, with a modest increase in 2021 to 3.4%.^{Footnote 427}

[491] According to the OECD, steel demand in South Korea had decreased by 4.9% in 2018 when compared to the previous year, with the decline being tied to the slowdown in the construction and shipbuilding sectors.^{Footnote 428}

[492] WSA statistics report South Korea’s crude steel production continues to increase up to 72.5 MMT in 2018 after a dip in 2016 to 68.6 MMT.^{Footnote 429} This ranks South Korea 5th in the world in crude steel production, trailing the US, with an annual crude steel production in 2018 of 86.6 MMT.^{Footnote 430}

[493] The trend analysis indicates that the South Korean economy is currently facing a number of challenges, as domestic GDP gradually contracts, record low interest rates have been implemented by the Bank of Korea, and continued weakness in the domestic steel demand with only modest growth projected for the future.

Domestic OCTG market in South Korea

[494] There was limited information placed on the record in regards to OCTG manufacturing and sales in South Korea.

[495] According to MBR data, the domestic market for OCTG products in South Korea is rather insignificant. The apparent domestic consumption of OCTG is slightly less than it was at the time of the original investigation. During the POR, domestic consumption was reportedly unchanged for 2017, 2018, and 2019. Domestic consumption is projected to increase in 2020 and 2021 respectively.^{Footnote 431}

[496] Given the number of producers and available production capacity of OCTG in South Korea, coupled with the weak domestic demand for OCTG products, South Korean mills are highly likely to resort to export markets in order to sell their OCTG products.

Excess production capacity of OCTG in South Korea

[497] Confidential information on the record concerning OCTG capacity indicates that of the known eight producers in South Korea, there is a significant total effective capacity.^{Footnote 432}

[498] Furthermore, MRB data indicates that a country wide OCTG capacity utilization rate in 2018 has decreased by more than half in contrast with 2017. With an estimated full year 2019 capacity utilization rate to be only slightly higher than 2018, OCTG producers in South Korea are dealing with a significant excess capacity issue.^{Footnote 433}

[499] Based on the 2018 capacity utilization rates in South Korea, the amount of potential excess capacity is well above the size of the Canadian market in 2018, and furthermore in 2019.^{Footnote 434}

Exports from South Korea

[500] In 2018, South Korea was the world’s fourth-largest steel exporter with exports to more than 150 countries and territories. According to the WSA, South Korea’s exports of semi-finished and finished steel products in 2018 was 30.1 MMT, down approximately 4% from 2017 exports of 31.4 MMT.^{Footnote 435}

[501] Since 2009, South Korea’s trade in steel mill products has operated at a trade surplus, with annual exports rising 49%, while imports declined 27% between 2009 and 2018.^{Footnote 436} Steel manufacturers having upheld a steel surplus in South Korea for such an extended period indicates a strong reliance on foreign markets to maintain production levels.

[502] Although not OCTG specific, a report issued by the ITA Global Steel Trade Monitor in September 2019 shows the importance of the North American market for steel pipe and tube exporters in South Korea. The ITA reported that the US accounted for the largest share of South Korea’s pipe and tube market at 49% (429,000 MT), while Canada received the second largest share at 8% (67,000 MT).^{Footnote 437} Therefore, in 2018 approximately 57% of total pipe and tube products from South Korea were destined for the North American market.

[503] Regarding OCTG specifically, MBR data indicates that South Korea export volumes during the period of the original investigation were similar to export volumes report in 2017, but have declined significantly in 2018 with only a marginal recovery estimated in 2019. MBR forecasts OCTG exports to remain at 2019 levels in 2020 and begin to further increase in 2021.^{Footnote 438}

[504] Furthermore, as detailed below, there are numerous anti-dumping measures in place against South Korea by Canada and the US, with multiple measures relating to pipe and tube products. Therefore, it is evident that pipe and tube exporters from South Korea have established channels of distribution within the North American market and subject goods are likely to be diverted to Canada should the finding be rescinded.

Export pricing from South Korea

[505] Case briefs filed by the Canadian producers provided evidence to demonstrate potential pricing of OCTG products exported from South Korea.

[506] Export data obtained from the Korean Customs Service was provided to permit a comparison between the average unit value at a six-digit HS code level (7306.29) for exports to Canada, where trade protection measures are in place, and Kuwait. It was stated that Kuwait was appropriate as a proper comparison since it was South Korea’s largest export market for OCTG where no trade protection is in place.^{Footnote 439}

[507] Using 2018 for a full year comparison, the average unit export price to Canada was determined to be $1,545/MT, whereas the average unit export price to Kuwait was $1,204/MT, representing a 22.1% lower selling price.^{Footnote 440}

[508] In light of this comparison, upon further review of the source documentation used to derive the average unit value, it is notable that the same dataset indicates that the average unit prices to other countries without trade protection such as Vietnam, United Arab Emirates, and New Zealand are $5,446/MT, $2,274/MT, and $2,891/MT respectively, with the overall unprotected markets averaging a unit price of $3,859/MT. It should be also noted that the same dataset for unprotected export markets has average unit values ranging as low as $1,204/MT (Kuwait), to as high as $153,390/MT (Iraq).^{Footnote 441}

[509] The CBSA reviewed data collected from UN Comtrade that reported quantities and values for subject country OCTG exports at the six-digit level (i.e. 7306.29). With respect to South Korea, the data indicated that in 2018 the average unit export price was $1,326/MT for welded OCTG (7306.29).^{Footnote 442} This represents an average unit export price that is 14.2% less than the average unit export price from South Korea to Canada ($1,545/MT) as reported by the Korean Customs Service in the previous paragraph.

[510] According to CBSA Enforcement data, there were no imports of subject goods from South Korea in 2018 or 2019 into Canada and only a minimal amount of imports reported in 2017 with an average unit export price of $1,302/MT.^{Footnote 443} Further examining the CBSA Enforcement data, when comparing the South Korea export price for 2017 to export prices from named and other countries, it appears that South Korea’s export prices tend to be below other import prices. Table 7 below shows a summary of export prices.

[511] Based on the pricing in the table above, it is evident that South Korean OCTG sells well below the major importers of OCTG in Canada with an import price 28% lower than the average Canadian import price. As such, considering the pricing information available, it is likely that subject goods originating or exported from South Korea would be at prices below the average Canadian import price should the finding be rescinded.

CBSA data on exports from South Korea to Canada

[512] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, South Korea accounted for 3.1% of total imports.^{Footnote 445}

[513] During the POR, imports of subject goods from South Korea were minimal, with only 84 MT imported in 2017 at a value of $109,208 CAD on which $0 of SIMA duties were assessed.^{Footnote 446}

[514] A total of five exporters received normal values in the CBSA’s 2015 re-investigation, and in spite of this, there were no imports of subject goods from South Korea in 2018 or 2019. The limited amount of imports may be attributed to exporters’ inability to compete in Canada at previously established normal values.

[515] It should be noted that the lack of importations may also be due to the diminishing demand in the Canadian market. The Canadian market has been experiencing a weak and declining demand for OCTG throughout the POR as an estimated 35% contraction had occurred between 2017 and 2019.^{Footnote 447} The Canadian producers acknowledged the reduction in OCTG consumption in their case briefs stating, “the estimated total apparent market for OCTG {in Canada} declined sharply from 2017 and 2018 into 2019”.^{Footnote 448}

[516] The CBSA recently concluded a re-investigation in May 2020 to update normal values. Only one South Korean exporter, SeAH, participated and was provided specific normal values upon conclusion.^{Footnote 449}

Trade measures against other South Korean steel products in Canada and other jurisdictions

[517] There is a propensity to dump steel products in Canada by South Korean exporters that is demonstrated by the numerous anti-dumping measures imposed by Canada against South Korea. As of January 1, 2020, the CBSA had anti-dumping measures in force for the following steel products originating in or exported from South Korea:^{Footnote 450}

• Carbon steel welded pipe;
• Cold-rolled steel;
• Corrosion-resistant steel sheet;
• Fabricated industrial steel components;
• Hollow structural sections;
• Line pipe;
• Steel plate

[518] There is currently an anti-dumping measure in place in the US against certain OCTG from South Korea and other countries, and has been in effect since 2014. In a recent sunset review of the order conducted by the Department of Commerce, it was determined that the revocation of the anti-dumping duty orders on certain OCTG from South Korea, and other named countries, would likely lead to the continuation or recurrence of dumping.^{Footnote 451}

[519] Furthermore, according to the ITA’s Global Trade Monitor report issued for South Korea, as of September 2019, there were a total of 63 anti-dumping and/or countervailing measures in effect from various countries against steel mill products from South Korea. Of these measures, 22 were imposed by the US.^{Footnote 452}

[520] Considering the number of anti-dumping measures in other jurisdictions against South Korea steel products, as well as the CBSA’s own measures in force concerning steel products, there is a clear and demonstrated pattern by South Korean exporters to dump steel products and a strong likelihood of continued dumping should the finding be rescinded.

Determination regarding likelihood of continued or resumed dumping from South Korea

[521] Based on the information on the administrative record in respect of: the current challenges that steel producers from South Korea continue to face due to worsening economic conditions in the domestic market; weak domestic demand for OCTG requiring producers to focus on export markets; the excess production capacity and excess capacity associated with OCTG producers in South Korea; the export dependency of OCTG producers in South Korea; the pricing data suggesting South Korean exporters sell OCTG to Canada and other markets at prices below other Canadian import prices of OCTG and; trade measures against other South Korean steel products in Canada and other jurisdictions, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from South Korea.

Thailand

[522] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in Thailand. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Thailand is likely to resume or continue if the finding were to expire.

Producers of OCTG in Thailand

[523] Information on the record provided by the Canadian producers identified two OCTG producers in Thailand, namely, Boly Pipe Co. Ltd. (Boly Pipe), and Wuxi Seamless Oil Pipe. Ltd. (WSP).^{Footnote 453} Information on the record also indicated that two other producers, namely, Thai Oil Pipe Co., Ltd. (Thai Oil Pipe), and TSP Precision Steel Tube Manufacturing (Thailand) CO., Ltd. (TSP) are licensed OCTG manufactures in Thailand.^{Footnote 454}

[524] Information on the known active OCTG producers in Thailand was limited but some information regarding their OCTG output follows.

Boly Pipe

[525] According the Boly Pipe’s website, Boly Pipe is a manufacturer of seamless steel pipes in Thailand, with an annual hot-rolling capacity of 200,000 MT and is equipped with one ACUROLL hot-rolling mill, two heat-treatment lines, and three threading lines. Boly Pipe mainly serves the energy, construction and vehicle industries with its main products including finished OCTG pipes, lines pipes, mechanical structural pipes, and other seamless carbon pipe products.^{Footnote 455}

[526] Boly Pipe did not participate in the CBSA’s original investigation, but did participate in the re-investigation which concluded May 25, 2020.^{Footnote 456}

Thai Oil Pipe (TOP)

[527] According to TOP’s website, TOP is located in Amata Industry Park in Thailand and is mainly engaged in the production of tubing, casing, line pipe design and providing after sales service. TOP asserts that its facilities are equipped with world class manufacturing equipment and OCTG production lines. The company has an annual output capacity of 100,000 MT of OCTG in a wide array of outside diameters and an additional 50,000 MT line pipe capacity.^{Footnote 457}

[528] TOP participated in the original investigation and the re-investigation which concluded May 25, 2020.^{Footnote 458}

Other facilities

[529] In addition to the two facilities described above, Thailand has another facility, known as TSP, that is licensed by API 5CT to manufacture OCTG seamless casing and tubing.^{Footnote 459} Furthermore, information on the record indicates that OCTG producer WSP is an affiliate of Chinese producer Wuxi that began its Thai seamless operation in 2011. However, according to MBR, the current status of this mill is uncertain.^{Footnote 460}

[530] Based on available information on the administrative record, it is apparent that producers in Thailand have a large capacity to produce OCTG.

Domestic market in Thailand

[531] According to the economic outlook report by Deloitte, GDP growth in Thailand was projected to be 3.1% in 2019, down from economic growth of 4.1% realized in 2018.^{Footnote 461}

[532] In April 2020, the IMF reported Thailand’s real GDP growth in 2019 to be 2.4% and forecast 2020 to have a large contraction of -6.7%, with a significant uptick in 2021 to 6.1%.^{Footnote 462}

[533] With respect to steel, according to the OECD, steel demand in Thailand has slightly recovered, doing so by 1% in 2018, due to growth in the construction and manufacturing sectors.^{Footnote 463}

[534] The Steel Business Briefing (SBB) reported in late 2019 that Thailand’s production of finished steel has fallen year-on-year over January to September with exports of finished steel falling over the same period. Furthermore, Thailand’s steel consumption of finished steel has fallen slightly as well year-on-year over January to September. Factors such as external risks from trade tensions, China’s economic outlook and advanced economies’ potential affect on domestic demand were cited by the Bank of Thailand’s monetary policy committee as contributing to Thailand’s economic slowdown.^{Footnote 464}

[535] Thailand is a net importer of steel mill products and was ranked the world’s fourth-largest steel importer in 2018. Between 2017 and 2018, Thailand’s volume of steel imports increased by 8%. In the first three quarters of 2019 there was a further 10% increase to 8.3 MMT from 7.5 when comparing to the same period in 2018. Of the 8.3 MMT imported in the first three quarters of 2019, 3% (277,000 MT) were pipe and tube products. ^{Footnote 465}

[536] The trend analysis indicates that Thailand’s production, exports and consumption of steel are continuing to decline into 2020 and the projection for future growth is not anticipated until 2021. In addition, although there continues to be a decline in domestic production and consumption of steel, the pressure of steel imports into Thailand continue to increase.

Domestic OCTG market in Thailand

[537] There was limited information placed on the record regards to OCTG manufacturing and sales in Thailand.

[538] According to MBR data, Thailand’s apparent domestic consumption of OCTG during the POR is considerably less than it was at the time of the original investigation.^{Footnote 466}

[539] MBR projects domestic consumption of OCTG in Thailand to increase from levels reported during the POR in 2020 and 2021. So, while the projection for the domestic market for OCTG in Thailand is strengthening and getting closer to levels achieved during the original investigation, it is still substantially lower than levels reached in 2014.^{Footnote 467}

[540] It should be noted that MBR data indicates that Thailand is a substantial net importer of OCTG, with the majority of domestic demand being met by imports. With domestic apparent consumption forecasted to increase by 2021 from 2018 levels, demand is expected to be primarily met by increased imports along with a small percentage increase in domestic production.^{Footnote 468}

[541] Despite the forecasted increase in domestic apparent consumption of OCTG in Thailand and the corresponding increase in imports and domestic production to meet this demand, exports from domestic production are expected to remain flat as MBR forecasts export volumes to maintain at 2017 volumes through to 2022.^{Footnote 469}

[542] This would indicate that Thailand domestic producers will be improving capacity utilization rates by serving the domestic market. However, should OCTG producers look to improve capacity utilization rates, they would likely resort to export markets due to the large proportion of domestic consumption being fulfilled by imported OCTG.

Exports from Thailand

[543] The Canadian producers cited a report from the Oxford Business Group in 2016 that indicated that Thailand’s export dependency had soared over the course of two decades and represented approximately two-thirds of Thailand’s GDP in 2015.^{Footnote 470}

[544] That same report indicated that Thailand’s exports have declined sharply leading into late 2015 and annual exports have dropped for the third straight year in 2015, recording their largest decline in six years of 5.8%. The agricultural and industrial sectors were noted as being hit particularly hard, with industrial goods falling by 4%.^{Footnote 471}

[545] Despite the declining exports, a report issued by the World Steel Association indicates that exports of semi-finished and finished steel products from Thailand have been recovering since 2015, with an increase of 31% between 2016 and 2018.^{Footnote 472}

[546] In terms of tubular products, the information on the record demonstrates that Thailand has a strong presence on the export market.

[547] Data on the record, which consolidates Thailand’s exports of seamless (7304.29) and welded (7306.29) pipes, demonstrates Thailand’s strong exports of steel tubulars in the seamless classification:^{Footnote 473}

[548] Regarding OCTG specifically, information on the record consolidated by the Canadian producers from the Global Trade Atlas at the 8-digit HS classification level, indicates that Thailand actively sells OCTG to export markets.^{Footnote 474}

[549] Since the data cited by the Canadian producers from the Global Trade Atlas includes information that is not reconcilable to Canada’s HS classification system, this dataset may be incomplete or include goods that are non-subject seamless and welded tubes. As such MBR data specific to OCTG was favoured in analyzing Thailand’s exports.^{Footnote 475}

[550] The MBR data shows that while Thailand’s export volumes of OCTG had a significant decline following the conclusion of the original investigation but have since recovered and surpassed previous highs in 2014 and are projected to rise further. MBR forecasts OCTG exports to increase in 2020 and maintain through to 2022.^{Footnote 476}

[551] The level of OCTG exported from Thailand during the original investigation has since recovered and is projected to grow substantially in 2021 and 2022 when compared to 2017 levels. A large proportion of the country’s domestic OCTG production was exported during the POR.^{Footnote 477} With a substantial amount of domestic consumption being provided through imports, it appears that producers of OCTG in Thailand will continue to be highly reliant on exporting OCTG goods.

CBSA data on exports from Thailand to Canada

[552] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, Thailand accounted for 1.2% of total imports.^{Footnote 478}

[553] In the original investigation, the only participating exporter, TOP, was found to be dumping. TOP has recently been issued normal values at the conclusion of the 2020 re-investigation.^{Footnote 479} In addition to TOP, Boly Pipe participated in the recent re-investigation and has also been issued normal values.^{Footnote 480}

[554] Over the three-year POR for this expiry review (2017-2019), there were no imports of subject goods from Thailand.^{Footnote 481} TOP’s lack of exports during the POR may suggest an inability to compete at the normal values issued to the company.

[555] Furthermore, TOP and Boly Pipe’s participation in the recent re-investigation may suggest that there is a renewed interest in the Canadian market.

Trade measures against other Thailand steel products in Canada and other jurisdictions

[556] Canada’s only other anti-dumping measure against steel products from Thailand concern certain carbon steel welded pipe.^{Footnote 482}

[557] Other than Canada, information on the record indicates that Thailand has three anti-dumping measures against similar steel products to OCTG in Australia, Brazil and the US.^{Footnote 483}

[558] The current measure in place in Canada with respect to carbon steel welded pipe along with measures in place in other jurisdictions for similar steel products, demonstrates that producers and exporters in Thailand have a propensity to dump steel goods and are likely to resume or continue to dump subject goods should the finding be rescinded.

Determination regarding likelihood of continued or resumed dumping from Thailand

[559] Based on the information on the administrative record in respect of: the large capacity to produce OCTG; OCTG producers’ dependence on exports; the inability to sell OCTG in Canada at non-dumped prices; and trade measures against other steel products from Thailand in Canada and other jurisdictions, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Thailand.

Turkey

[560] CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Turkey. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Turkey is likely to resume or continue if the finding were to expire.

Producers of OCTG in Turkey

[561] According to information on the record, there are two active producers of OCTG in Turkey, namely, Borusan Mannesmann and Cayirova Boru.^{Footnote 484}

Borusan Mannesmann (Borusan)

[562] According to MBR, Borusan is Turkey’s largest welded OCTG producer.^{Footnote 485} The Gemlik facility can produce up to 13.38 inches outside diameter.

[563] In 2014, Borusan opened a production facility in the United States in Baytown, Texas. The facility has a 300,000 MT annual production capacity for OCTG.^{Footnote 486} Turkey’s drop in production noted above starting in 2014 can be largely attributed to Borusan opening this facility in the United States, a previous large export market for production at Gemlik.

[564] Borusan participated in the original investigation and re-investigation in 2015^{Footnote 487} and in the most recent re-investigation which concluded May 25, 2020.^{Footnote 488}

Cayirova Boru (Cayirova)

[565] Cayirova is the second-largest OCTG producer in Turkey. The company can produce up to 12.75 inches in outside diameter.^{Footnote 489}

Other potential Turkish producers

[566] Although no information was available on the record of actual production, the following two pipe manufacturers in Turkey are licensed by the American Petroleum Institute (API) to manufacture API-5CT specification, low-strength ERW casing and tubing (plain end).^{Footnote 490}

• Toscelik Profile And Sheet Ind. Co. / Osmaniye ERW Pipe Facility^{Footnote 491}
• Umran Celik Boru Sanayii A.S. / Akcakoca Facility^{Footnote 492}

Domestic market in Turkey

[567] Turkey’s domestic economic situation is volatile and attributed to a number of different factors.

[568] In terms of its GDP, based on data available for H1-2019, the OECD projected real GDP growth in Turkey to be -2.6% and 1.6% in 2019 and 2020 respectively.^{Footnote 493} However, due largely to changes in the world economy in Q1-2020, information from the IMF in April 2020 reported Turkey’s real GDP growth in 2019 to be 0.9% and forecasts 2020 to regress to -5.0%, with a significant uptick in 2021 to 5.0%.^{Footnote 494}

[569] Information on the record reported in the spring of 2019, that Turkey’s annual inflation rate had risen to an incredible 49%.^{Footnote 495}

[570] In terms of its steel industry, information on the record cited from the World Steel Organization indicates that Turkey is the 8th largest producer of crude steel in the world at 37.3 MMT per year. Turkey consumes 30.6 MMT of finished steel per year. As such, Turkey is a significant net exporter of steel.^{Footnote 496}

[571] The OECD stated that steel demand in Turkey as of Q4-2019 was still being negatively affected by the country’s currency crisis of August 2018 and continued volatility in the Turkish lira. The exchange rate situation is resulting in a cautious market, with prices near stationary and low transaction volumes.^{Footnote 497} The depreciated currency also makes Turkish exports more attractive, as the lira is comparatively less expensive than before the crisis.

Domestic OCTG market in Turkey

[572] There was limited information placed on the record in regards to OCTG manufacturing and sales in Turkey.

[573] According to MBR data, Turkey’s apparent domestic consumption of OCTG is comparable to what it was at the time of the original investigation. Based on MBR’s estimated OCTG consumption in Turkey in 2019, domestic consumption is projected to decrease in 2020 and further 2021.^{Footnote 498} The projected decline in domestic consumption is notable for a country already heavily leveraged towards its export market.

[574] The decline in projected consumption of OCTG in Turkey may be further exacerbated by the recent challenges it has faced that may threaten its ability to maintain these consumption targets.

[575] For example, the domestic OCTG market has recently felt pressures from rising HRC costs, the primary input to ERW pipe. Prices of HRC in Turkey rose in late 2019, in the absence of any notable change in pipe demand, making it difficult to pass along the increased costs to the pipe purchasers in the market.^{Footnote 499}

[576] More recently, due to the global pandemic, the domestic market has seen a temporary halt in production at several Turkish steel mills, including Borusan, which reportedly paused output “at some of its mills in Turkey,” although it is unclear from the report on the record if the Gemlik facility which manufactures OCTG is one of them.^{Footnote 500}

Excess production capacity of OCTG in Turkey

[577] The CBSA considered confidential information on the administrative record from MBR with respect to the total effective capacity in Turkey for OCTG. Borsuan accounts for a majority of this capacity.^{Footnote 501}

[578] The Canadian producers also cited the tubular capacities of Toscelik and Umran Celik, the latter of which has a further 750,000 MT of tubular production capacity alone.^{Footnote 502} The CBSA notes that there is no evidence on the record that these producers avail themselves of their license to produce API 5CT OCTG.

[579] Turkish OCTG production has dropped substantially from the time of the original investigation POI of 2013 according to MBR.^{Footnote 503}

[580] Based on MBR’s estimated OCTG production from Turkey in 2019, projected future production is to be slightly less in 2020 and 2021.^{Footnote 504} This would equate to extremely low utilization rates for 2019 and 2020.^{Footnote 505} MBR forecasts Turkey’s production to remain stable through 2022 at the levels reported for 2019.

Exports from Turkey

[581] Turkey was the world’s eighth-largest steel exporter in 2018, with a reported 19.8 MMT of steel exports, a 22% increase from 16.2 MMT in 2017. Pipe and tube represented 2 MMT of that total.^{Footnote 506}

[582] According to data cited by the OECD, steel exports from Turkey increased by 16.7%, year-on-year, in the first three months of 2019.^{Footnote 507}

[583] The US section 232 tariffs had a profound effect on Turkey. Steel exports from Turkey to the United States decreased by 38% between 2017 and 2018. Over the same period, exports of Turkish steel to Canada increased by 92%, the highest increase for any of Turkey’s steel export markets according to the ITA Global Steel Trade Monitor.^{Footnote 508}

[584] Data on the record which consolidates Turkey’s exports of both seamless (7304) and welded (7306) pipes demonstrates Turkey’s strong exports of steel tubulars, particularly in the welded classification:^{Footnote 509}

[585] Regarding OCTG specifically, information on the record consolidated by the Canadian producers from the Global Trade Atlas at the 8-digit HS classification level, indicates that Turkey actively sells OCTG to export markets.^{Footnote 510}

[586] Since the data cited by the Canadian producers from the Global Trade Atlas includes information that is not reconcilable to Canada’s tariff classification system, this dataset may be incomplete or include goods that are non-subject seamless and welded tubes. As such MBR data specific to OCTG was favoured in analyzing Turkey’s exports.^{Footnote 511}

[587] MBR data reveals that, like most countries, Turkey’s export volumes of OCTG have dropped substantially since the period of the original investigation. Specifically, exports of OCTG from Turkey were significantly lower in 2017, 2018 and 2019. OCTG exports are forecasted to be relatively flat in 2020 and 2021.^{Footnote 512}

[588] Turkey is still a net exporter of OCTG and domestic consumption forecasts are well below production forecasts.^{Footnote 513} Consequently, the country is still heavily leveraged towards export markets for its OCTG.

[589] Turkey’s export dependence for steel pipe has also been severely hampered by the US 232 Tariffs as exports dropped substantially in 2019 from 2018. The United States has traditionally been one of Turkey’s largest pipe customers.^{Footnote 514}

CBSA data on exports from Turkey to Canada

[590] In terms of OCTG specifically, the original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, Turkey accounted for 5.3% of total imports, by far the largest share of any of the nine named countries.^{Footnote 515}

[591] Over the three-year POR for this Expiry Review (2017-2019), Turkey accounted for only 0.19% of imports.^{Footnote 516} In the most recent full-year period of 2019, Turkey accounted for only 76 MT of subject imports.

[592] The Canadian producers cited anti-dumping duty collected on exports of OCTG from Turkey while the finding has been in place as evidence that Turkey cannot compete in Canada on sales of OCTG without dumping.^{Footnote 517}

[593] The CBSA also notes that no dumping duties were collected in 2017 nor 2019 on exports of OCTG from Turkey according to the CBSA’s import and enforcement statistics.^{Footnote 518}

[594] The CBSA noted that information submitted by IMCO International Steel Trading Inc. (IMCO) indicated substantially more imports of OCTG from Turkey than reported in the CBSA import and enforcement statistics.^{Footnote 519} For the purposes of the expiry review, the CBSA relied primarily on its own official import statistics.

[595] As previously noted, Borusan is currently the only producer in Turkey with normal values for OCTG.^{Footnote 520} The company has had normal values since the conclusion of the original investigation.^{Footnote 521} Borusan is also the only producer in Turkey identified on the record as having exported subject goods to Canada since the original investigation^{Footnote 522} and was found to have a 0% margin of dumping at the final determination.^{Footnote 523}

[596] While Borusan established an OCTG production facility in Baytown, Texas in 2014, the company has demonstrated a continued interest in the Canadian market through its participation in normal value re-investigations, in spite of not consistently demonstrating an ability to compete at those normal values. So while the company may service the North American market in part through the Baytown facility, there is clearly still interest to supply the Canadian market directly through the Gemlik facility in Turkey.

Anti-dumping measures on similar products in Canada

[597] In January 2019, the CBSA found that carbon steel welded pipe (CSWP) from Turkey was being dumped into Canada. The exporters involved included Cayirova Borusan with a margin of dumping of 8.8%. In February 2019, the CITT determined that this dumping was injurious to the Canadian domestic industry.^{Footnote 524}

[598] The CBSA has also had anti-dumping measures on hollow structural sections (HSS) from Turkey since 2003.^{Footnote 525}

[599] The presence of the other known Turkish OCTG producer, Cayirova Boru, in the Canadian market in the CSWP investigation is not insignificant.^{Footnote 526} It establishes that recent commercial relationships already exist in Canada for their tubular goods, notwithstanding their non-participation in previous OCTG proceedings in respect of the present finding.

Measures in other jurisdictions against Turkey

[600] Information on the record indicates that other than Canada, the United States has anti-dumping measures against Turkish steel products, including OCTG.

[601] On March 24, 2020, the US Department of Commerce (USDOC) completed its sunset review and continued its anti-dumping measures on OCTG from India, South Korea, Turkey and Vietnam, determining that the expiration of the measures would be likely to lead to continuation or recurrence of dumping.^{Footnote 527}

[602] The list of other anti-dumping measures in the United States includes:

• Light-walled rectangular pipe and tube;
• Circular welded carbon steel pipe and tube;
• Welded Line Pipe;
• Heavy-walled rectangular welded carbon steel pipe and tube;
• Large diameter welded pipe.^{Footnote 528}

Determination regarding likelihood of continued or resumed dumping from Turkey

[603] Based on the information on the administrative record in respect of: the Turkish domestic market volatility, including the depreciation of the domestic currency encouraging more exports; the insufficient domestic demand creating high export dependency of OCTG producers; the excess production capacity for OCTG; the continued interest in the Canadian OCTG market; the threat of divergence of exports to Canada due to the US section 232 tariffs; the existence of a recent anti-dumping finding in Canada for Turkish pipe; and the number of anti-dumping measures on similar goods, including OCTG, in the United States, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Turkey.

Ukraine

[604] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in Ukraine. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Ukraine is likely to resume or continue if the finding were to expire.

Producers of OCTG in Ukraine

[605] The information on the record identified one active and licensed API-5CT OCTG producer in Ukraine, namely, Interpipe Niko Tube Limited Liability Company (Interpipe).^{Footnote 529}

Interpipe

[606] Interpipe is the second largest OCTG producer by output in the CIS and operates two OCTG seamless pipe producing plants in Ukraine.^{Footnote 530}

[607] The first plant, Nikopol Seamless Tube Plant (Nikotube), produces seamless tubing ranging from 1.65 to 4.69 inches in outside diameter. Confidential information on the administrative record provided confidential details concerning total tubular capacity and effective OCTG capacity.^{Footnote 531}

[608] The second plant, Nizhnedneprovsk Tube Rolling Plant (NTRP), predominantly produces seamless casing, ranging from 5.51 to 13.39 inches in outside diameter. Confidential information on the administrative record provided confidential details concerning total tubular capacity and effective OCTG capacity.^{Footnote 532}

Domestic Market in Ukraine

[609] In 2018, Ukraine’s economic recovery posted its strongest year-to-date, driven by ongoing and unprecedented structural reforms, favourable export markets, solid macroeconomic fundamentals, and greater stability. Real GDP growth for the year was 3.3%, following increases of 2.5% in 2017 and 2.4% in 2016.^{Footnote 533}

[610] The resurgent Ukrainian economy has also driven increased demand for steel products. In 2018, apparent steel consumption increased by 4% to 5.7 MMT. The increased level of consumption can be attributed to the construction sector, which accounted for 70% of steel consumption in 2018. Infrastructure development accounted for the majority of steel consumption within the construction sector, due to the pressing need to upgrade existent infrastructure, including buildings and roads, much of which were 30 to 40 years old.^{Footnote 534}

[611] Ukraine’s crude steel production has steadily decreased from its peak of 25.9 MMT in 2011. In 2018, production totaled 15 MMT, representing a 1% increase from 2017 levels. Steel production is concentrated amongst three companies, namely, Metinvest Holding; PJSC Arcelor Mittal Kryvyu Rih; and Industrial Union of Donbass.^{Footnote 535}

[612] The Ukrainian steel industry is highly export-oriented, having been the world’s 11th largest exporter of steel in 2017.^{Footnote 536} That year, the country exported 15.2 MMT of steel,^{Footnote 537} while overseas sales of rolled-steel products, excluding pipes, accounted for 79% of total output.^{Footnote 538}

[613] Ukraine also imports types of steel that are not produced domestically, produced in insufficient quantities to meet domestic demand, or that have better price-quality ratios. In 2018, this resulted in the importation of 1.4 MMT of steel.^{Footnote 539}

Domestic OCTG market in Ukraine

[614] Production of OCTG in Ukraine has increased significantly since reaching a low in 2016. Production climbed in 2018, and continued to increase in 2019 and is forecasted to slightly decrease in 2020. Annual production levels are projected to remain slightly below 2018 levels through to 2025.^{Footnote 540}

[615] Domestic consumption of OCTG in Ukraine has been increasing since reaching a low in 2016. Consumption increased in 2018, continued to increase in 2019, is forecasted to remain close to 2019 levels in 2020, and is estimated to drop in future years.^{Footnote 541} The increase in domestic consumption coincides with the previously mentioned economic recovery.

[616] The CBSA’s estimated Canadian market for OCTG in 2019 as per Table 2 of this report was roughly 663,000 MT. As such, MBR’s estimate for Ukraine’s 2020 OCTG production represents a material proportion of the total Canadian market, displaying the potential threat posed by increasing Ukrainian OCTG production levels.

Excess production capacity of OCTG in Ukraine

[617] Information sourced from MBR provided estimates of Ukrainian OCTG producers effective capacity.^{Footnote 542} While production of OCTG has increased significantly since 2016, production in 2019 still results in a large quantity of excess capacity. This underutilized capacity represents a material proportion of the CBSA estimate of the Canadian OCTG market.

Financial performance of the Ukrainian exporter

[618] Interpipe experienced poor financial performance in 2017 and 2018, while the Ukrainian economy was in the midst of a robust recovery.^{Footnote 543} The pipes segment of Interpipe accounted for the majority of total sales in 2018.^{Footnote 544} The segment also posted losses in 2017 and 2018. In both of these years, it was the only segment of the company to experience losses, accentuating its poor performance.^{Footnote 545}

[619] As a result of the development of a strategic program designed to increase both the capacity and quality of production, Interpipe began making investments in its pipe producing facilities in 2018.^{Footnote 546}

[620] The poor financial performance of Interpipe is likely to prompt the company to increase its production and sales of OCTG to any available export markets to cover fixed costs and improve performance.

Exports from Ukraine

[621] According to MBR data, exports of OCTG from Ukraine have increased dramatically since reaching their lowest level in 2016. Exports increased significantly by 2018, reached a peak in 2019, are forecasted to decrease slightly in 2020 and then remain slightly below 2020 levels per year through to 2025.^{Footnote 547}

[622] According to MBR, Ukraine will be the third largest exporter of OCTG by volume amongst countries subject to the current finding, trailing Chinese Taipei by a small margin.^{Footnote 548} When taking into consideration the efforts made by Interpipe to both increase capacity and improve quality of pipe manufacturing, the current and future exporting potential of Ukraine appears to be very strong.

CBSA data on exports from Ukraine to Canada

[623] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, Ukraine accounted for 1% of total imports.^{Footnote 549}

[624] In the original investigation, the participating exporter and sole producer of OCTG in Ukraine, Interpipe, was found to be dumping. Interpipe has had normal values since the final determination and through the latest re-investigation, which concluded May 25, 2020.^{Footnote 550}

[625] During the POR, Ukraine did not export any subject goods into Canada.^{Footnote 551} This demonstrates that Ukrainian exporters may have difficulty competing in the Canadian OCTG market at non-dumped prices.

Trade measures against other Ukrainian steel products in Canada and abroad

[626] According to the Global Steel Trade Monitor, there are currently 27 trade remedies in effect involving steel from Ukraine, of which, Canada currently accounts for three.^{Footnote 552} The 27 trade remedies provide evidence that Ukrainian producers have a propensity to dump steel products in Canada and abroad.

Evidence of Ukrainian exporters dumping in other markets

[627] Information on the record from the WTO demonstrates that Ukrainian exporters are subject to anti-dumping measures against OCTG in the European Union, Russia, and the United States.^{Footnote 553}

[628] The United States and Russia are two of the largest consumers of OCTG globally.^{Footnote 554} The current measures in force against Ukrainian OCTG in these two countries greatly limits the options available to Ukrainian exporters, causing them to seek out and potentially increase exports to other markets

Determination regarding likelihood of continued or resumed dumping from Ukraine

[629] Based on the information on the administrative record in respect of: the large and forecasted growth in capacity to produce OCTG; the substantial current and projected exports of OCTG; the poor financial performance of the sole exporter of OCTG, which will only encourage more exports of OCTG in an attempt to offset losses; the inability to sell OCTG in Canada at non-dumped prices; and the demonstrated propensity to dump in other major OCTG markets, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Ukraine.

Vietnam

[630] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters or producers in Vietnam. The CBSA therefore relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Vietnam is likely to resume or continue if the finding were to expire.

Producers of OCTG in Vietnam

[631] Information on the record identified three active OCTG producers in Vietnam, namely, SeAH Steel Vina Coporation (SeAH Steel), Sujia Steel Pipe Co. Ltd. (Sujia Steel), and Hot-Rolling Pipe.^{Footnote 555}

SeAH Steel

[632] According to MBR, SeAH Steel, located in Dong Nai, produces ERW pipe, ranging from 1 to 8 inches in outside diameter. Confidential information on the administrative record provided details concerning total tubular capacity and effective OCTG capacity of the plant.^{Footnote 556}

Sujia Steel

[633] According to MBR, Sujia Steel, located in Tay Ninh, produces ERW pipe, ranging from 2.375 to 6.625 inches in outside diameter. Confidential information on the administrative record provided details concerning total tubular capacity and effective OCTG capacity of the plant.^{Footnote 557}

Hot Rolling Pipe

[634] According to MBR, Hot-Rolling Pipe, located in Dong Nai, produces seamless pipe, ranging from 2.38 to 13.375 inches in outside diameter. Confidential information on the administrative record provided details concerning total tubular capacity and effective OCTG capacity of the plant.^{Footnote 558}

Domestic market in Vietnam

[635] According to the International Monetary Fund (IMF), Vietnam has experienced steady growth in GDP since 2011. Annual growth has only dropped below 6% on two occasions and is projected to remain above 6% for 2020,^{Footnote 559} although the projection was made prior to the global pandemic and could be overstated as a result.

[636] Vietnam has a prominent presence in the global steel industry, having produced 14.1 MMT in 2018, resulting in year-over-year growth of 22.4%, ranking them as the world’s 17th largest producer.^{Footnote 560} Vietnamese steel production is concentrated between five main producers, namely, HoaPhat, Hoa Sen, Minh Ngoc, TVP, and SeAH Steel, accounting for the majority of production in 2018.^{Footnote 561}

[637] Despite the excess capacity plaguing the global steel industry, Vietnamese steel pipe producers have continued to expand their production capacities. In 2018, Hoa Phat Group added a plant in Quang Ngai, which effectively added 4 MMT of production capacity, producing construction steel, high quality rolled steel and hot-rolled coil^{Footnote 562} and in 2019, SeAH Steel increased its pipe production capacity by 140,000 MT.^{Footnote 563}

Domestic OCTG market in Vietnam

[638] According to MBR, production of OCTG in Vietnam has increased significantly since reaching lows in 2015 and 2016. Production increased in 2017 and continued to increase in 2018; and was estimated to be again higher in 2019. Production is projected to continue increasing in 2020 thru to 2022, demonstrating continued and sustainable growth in domestic production.^{Footnote 564}

[639] Domestic consumption of Vietnamese OCTG remained steady from 2016 to 2019. Domestic consumption is projected to increase steadily between 2020 thru to 2022.^{Footnote 565}

[640] The above OCTG production and consumption figures demonstrate that since the recovery began in 2017, Vietnamese OCTG production has outpaced domestic consumption and is forecasted to continue to do so by a significant and increasing margin through to 2025.^{Footnote 566}

Excess production capacity of OCTG in Vietnam

[641] Vietnamese producers have a significant effective OCTG capacity. According to MBR, domestic production of OCTG has lagged considerably behind effective OCTG capacity. In 2017, Vietnam’s excess capacity diminished although remained high in years 2018 and 2019.^{Footnote 567}

[642] Excess capacity is forecasted to remain high but below 2018 and 2019 levels each year until 2024, demonstrating a future trend of extremely low levels of capacity utilization amongst Vietnamese producers of OCTG.^{Footnote 568} The situation is likely to be further exacerbated by the aforementioned continued expansion of production of OCTG amongst the producers.

Exports from Vietnam

[643] According to MBR, there were no exports of OCTG from Vietnam during 2015. In 2016, only a small margin of OCTG was exported, while figures remained weak in 2017. From 2018 onwards, exports increased substantially and are forecasted to remain at increased levels per year through to 2025.

[644] The above figures display strong growth in export orientation of OCTG from Vietnam. When this trend is considered alongside the increasing production figures and excess capacity of the producers, exports of OCTG from Vietnam pose a potentially sizable threat to the Canadian OCTG market.

CBSA data on exports from Vietnam to Canada

[645] The original period of investigation covered all subject goods released into Canada over a 15-month period from January 1, 2013 to March 31, 2014. During that period, Vietnam accounted for 2.7% of total imports.^{Footnote 569}

[646] In the original investigation, the exporters of OCTG in Vietnam were found to be dumping.^{Footnote 570}

[647] During the POR, the Vietnamese exporters shipped 241 MT by volume and $401,196 CAD by value worth of OCTG into the Canadian market.^{Footnote 571} From 2017 to 2019, over 100,000 MT of OCTG were exported from Vietnam. When contrasting this with the small amount of OCTG exported into the Canadian market, it would appear that Vietnamese exporters are unable to compete without dumping.

Evidence of Vietnam dumping in Canada and other markets

[648] Vietnamese steel producers have a propensity to dump, as demonstrated by the evidence on the record. In 2019, Vietnamese steel producers, including OCTG producer SeAH Steel, were found to be dumping carbon steel welded pipe into Canada.^{Footnote 572}

[649] Steel producers from Vietnam are also subject to anti-dumping measures in the United States, Thailand, and Brazil. The measures cover: certain iron or steel pipe and tube, seamed tubes of austenitic stainless steel, welded stainless steel tubes, pipes, and profiles; and stainless steel pipe and tube.^{Footnote 573}

[650] Vietnamese producers are also subject to an OCTG finding in the United States, which took effect March 4th, 2020.^{Footnote 574}

Determination regarding likelihood of continued or resumed dumping from Vietnam

[651] Based on the information on the administrative record in respect of: the widening gap between production and consumption of OCTG in Vietnam; the large excess capacity to produce OCTG in Vietnam; the forecasted increase in exports of OCTG from Vietnam; the inability of Vietnamese exporters to sell OCTG in Canada at non-dumped prices; and the propensity to dump as demonstrated by multiple anti-dumping findings against Vietnamese steel including OCTG producers, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain OCTG originating in or exported from Vietnam.