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Final Determination - Stainless Steel Round Bar

OTTAWA, May 19, 1999

4258-11
AD-1211

STATEMENT OF REASONS

Concerning the making of a final determination of dumping regarding

CERTAIN STAINLESS STEEL ROUND BAR ORIGINATING IN OR EXPORTED FROM THE REPUBLIC OF KOREA

DECISION

Pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Deputy Minister of National Revenue has, on this date, made a final determination of dumping respecting certain stainless steel round bar originating in or exported from the Republic of Korea.

This Statement of Reasons is also available in French.
Cet énoncé des motifs est également disponible en français.

STATEMENT OF REASONS

SUMMARY

On September 21, 1998, the Canadian International Trade Tribunal (Tribunal) advised the Department under section 46 of the Special Import Measures Act (SIMA) that in its opinion, based on the evidence before it, certain stainless steel round bar from the Republic of Korea (Korea) was being dumped and that there was a reasonable indication that such dumping threatens to cause injury to the Canadian industry producing these goods.

Subsequent to this advice, Atlas Specialty Steels filed a complaint supplying evidence that this product has been dumped and that the dumping has caused injury and was threatening to cause injury. On December 3, 1998, the Deputy Minister of National Revenue initiated an investigation respecting the alleged injurious dumping into Canada of certain stainless steel round bar originating in or exported from Korea. On February 18, 1999, the Deputy Minister made a preliminary determination of dumping with respect to the subject goods.

The investigation continued after the preliminary determination and the Deputy Minister is now satisfied that the subject goods have been dumped, that the margin of dumping is not insignificant and that the actual volume of dumped goods is not negligible. Accordingly, the Deputy Minister has made a final determination of dumping in accordance with paragraph 41(1)(a) of SIMA.

INTERESTED PARTIES

Complainant

The complainant is Atlas Specialty Steels,

a Division of Atlas Steels Inc., of Welland, Ontario (Atlas). The company is the only producer of stainless steel round bar in Canada.

Exporters

The Department has identified three Korean and five United States exporters of the subject goods. The names and addresses of these companies are listed in Appendix 1.

Importers

The Department has identified twelve importers of subject goods. The names and addresses of these companies are listed in Appendix 2.

BACKGROUND

Since 1982, there have been five separate dumping investigations initiated with respect to imports of stainless steel round bar as a result of complaints filed by Atlas.

The most recently completed dumping investigation, respecting certain stainless steel round bar, covered subject goods from the Federal Republic of Germany, France, India, Italy, Japan, Spain, Sweden, Taiwan and the United Kingdom. A finding of material injury was made on September 4, 1998, by the Tribunal against all the named countries. In addition, in its Statement of Reasons issued on September 21, 1998, pertaining to this finding, the Tribunal advised the Deputy Minister under section 46 of SIMA that the evidence before it was sufficient for it to conclude that certain stainless steel round bar originating in or exported from Korea was being dumped in the Canadian market and that there was a reasonable indication that such dumping threatens to cause injury.

Subsequently, on November 16, 1998, Atlas filed a dumping complaint respecting certain stainless steel round bar from Korea. The Department informed Atlas on November 23, 1998, that the complaint was properly documented, and the investigation was initiated on December 3, 1998. On February 18, 1999, the Deputy Minister made a preliminary determination of dumping, pursuant to subsection 38(1) of SIMA.

PRODUCT INFORMATION

Definition

For the purpose of this investigation, the subject goods are defined as:

stainless steel round bar of sizes 25 mm diameter up to 570 mm diameter inclusive, originating in or exported from Korea, excluding stainless steel round bar made to specifications:

• ASN-A3380 and ASN-A3294;
• 410QDT (oil quenched), that is, grade 410 quenched and double tempered with an oil quenching medium.

Product Description

The subject goods include round bar in cut lengths, with various diameters, and with a variety of surface finishes.

Stainless steel round bar may be hot-rolled or forged only; hot-rolled or forged and annealed; hot rolled or forged and annealed and descaled or bar turned, rough turned or lathe turned; cold drawn whether smooth turned/rough ground, centreless ground or centreless ground and polished; hot-rolled and bar turned and smooth turned/rough ground or centreless ground or centreless ground and polished.

Stainless steels are corrosion resistant and/or heat resistant steels which contain, by weight, a maximum carbon content of 1.2 per cent and a minimum chromium content of 10.5 per cent. There are many individual chemical analyses or grades for stainless steels. These analyses typically include other alloying elements besides chromium (such as nickel and molybdenum, among others) and are tailored to meet the mechanical and/or physical properties of particular end-use applications. The most popular analyses of stainless steel bar are AISI (American Iron & Steel Institute) types 303, 304, 304L, 316, 316L, 410, 416, 420, 430F, and the 630 or 17Cr-4Ni precipitation hardening grade. These analyses account for over 85 per cent of the total Canadian consumption of stainless steel bar.

Use of the Subject Goods

Stainless steel round bar is used in a variety of production and maintenance applications which require resistance to corrosion and/or heat. Consequently, stainless steel round bar finds application in a variety of industries.

These industries include pulp and paper, power generation, petro-chemical, oil and gas, valves and fittings, automotive and transportation. Round bars are used for a variety of applications including valve bodies, various mixer shafts and pump shaft applications. Due to the corrosive and/or high heat environments in which stainless steel is employed, substitute or alternate goods are not available.

As indicated above, stainless steel is classified and sold by AISI chemical analysis numerical designations. Once these analyses are met, the resulting product is fungible and the most important factor in purchasing decisions is price. The imported goods from Korea are fully substitutable for Atlas’ stainless steel round bar.

CLASSIFICATION OF IMPORTS

The subject stainless steel round bar is properly classified under the following Harmonized System classification numbers as of January 1, 1998:

• 7222.11.00.11
• 7222.11.00.21
• 7222.20.10.11
• 7222.20.10.21
• 7222.20.90.11
• 7222.20.90.21
• 7222.30.00.11
• 7222.30.00.21

Prior to January 1, 1998, these products were properly classified under the following Harmonized System classification numbers:

• 7222.11.00.11
• 7222.11.00.21
• 7222.20.00.11
• 7222.20.00.21
• 7222.30.00.11
• 7222.30.00.21

THE CANADIAN INDUSTRY

Atlas is a producer of specialty steels and is Canada’s sole manufacturer of stainless steel bar. The company was founded in 1928 at Welland, Ontario, where it currently employs approximately 1,000 workers.

THE CANADIAN MARKET

Atlas provided an estimate of the size of the Canadian market for 1996, 1997, and for January to September 1998, based on an update of data available at the Tribunal’s recent inquiry into stainless steel round bar, information from Statistics Canada and Atlas’ shipments.

For purposes of the final determination, the Department examined customs entries for the period November 1, 1997 to October 31, 1998, to obtain a more accurate picture of the volume of imports of the subject goods from Korea and for like goods from other exporting countries.

During the period reviewed by the Department, 5.2 per cent of the total imports of the described goods into Canada were exported from Korea. Appendix 3 provides details of the importations during the review period.

Information on the total size of the Canadian market cannot be divulged because it could reveal the complainant’s confidential sales data.

RESULTS OF THE INVESTIGATION

In conducting its investigation, the Department requested potential exporters and importers to provide sales and cost information necessary to determine the normal values and export prices of the subject goods. The dumping investigation covered all imports of subject goods to Canada during the period of investigation (POI) from November 1, 1997 to October 31, 1998.

Of the companies which were identified as potential exporters of the subject goods, only one provided a response and it was incomplete.

Normal Values

Normal values are usually determined by the Department using information which is submitted by the companies and then verified by the Department. However, since the companies did not provide information to allow normal values to be determined in this manner an alternative method must be used. Accordingly, the Department has relied on the facts available to determine the normal values for the subject goods.

In this case, the facts available were the information verified during the most recently completed dumping investigation involving the same product. Therefore, pursuant to a ministerial specification under section 29 of SIMA, the Department applied the highest margin of dumping, excluding anomalies, found for cooperative exporters in the recent investigation with respect to certain stainless steel round bar from the Federal Republic of Germany, France, India, Italy, Japan, Spain, Sweden, Taiwan and the United Kingdom that was concluded on August 5, 1998. The highest margin of dumping found in that case was 110 per cent expressed as a percentage of export price.

Pursuant to the ministerial specification, normal values have been determined by advancing the export price of the subject goods by 110 per cent.

Export Price

For purposes of the final determination, export prices have been determined on the basis of the lower of the exporter’s selling price or the importer’s purchase price pursuant to section 24 of SIMA.

Margin of Dumping

All the subject goods which were exported to Canada during the period of investigation were reviewed and 100 per cent were found to be dumped by a weighted average margin of dumping of 52.4 per cent, expressed as a percentage of normal value.

DECISION

As a result of the investigation, the Deputy Minister is satisfied that the subject goods have been dumped, that the margin of dumping is not insignificant and that the volume of dumped goods is not negligible.

Accordingly, on this date, pursuant to paragraph 41(1)(a) of SIMA, a final determination of dumping has been made with respect to certain stainless steel round bar originating in or exported from the Republic of Korea.

FUTURE ACTION

The Tribunal’s inquiry concerning the question of injury to production in Canada is continuing and the Tribunal will issue its finding by June 18, 1999.

Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination. This provisional period began on the date of the preliminary determination,

February 18, 1999, and will end on the date the Tribunal issues its finding.

If the Tribunal finds that the dumped goods have not caused injury and do not threaten to cause injury, all proceedings relating to this investigation will be terminated. In such a case, all provisional duty paid or security posted by importers will be returned and future importations will not be subject to anti-dumping duty.

If the Tribunal finds that the dumped goods have caused injury, the Department will finalize the anti-dumping duty payable on the subject goods released from customs’ possession during the provisional period pursuant to section 55 of SIMA. If the provisional duty paid is in excess of the final amount of anti-dumping duty payable, the excess duty will be refunded.

Importations released from customs’ possession after the date of the Tribunal’s finding will be subject to anti-dumping duty equal to the margin of dumping, which is the amount by which the normal value exceeds the export price. If anti-dumping duty is payable, such duty is hereby demanded pursuant to section 11 of SIMA.

If the Tribunal finds that the dumped goods threaten to cause injury, all provisional duty paid or security posted by importers will be returned. However, importations released from customs’ possession after the date of the Tribunal’s finding will be subject to anti-dumping duty equal to the margin of dumping. If anti-dumping duty is payable, such duty is hereby demanded pursuant to section 11 of SIMA.

Normal values will be determined by advancing the export price of the subject goods by 110 per cent pursuant to a ministerial specification. To avoid the application of such an advance on export prices on their future shipments of subject goods, exporters can submit to the Department information required to permit the establishment of specific normal values for these products.

PUBLICATION

Notice of this final determination is being published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.

INFORMATION

This Statement of Reasons has been provided to persons directly interested in these proceedings. A free copy may be obtained upon request. For further information, please contact the following Revenue Canada officers by fax at

(613) 954-3750 or by telephone at:

Jody Grantham (613) 954-7405
Richard Pragnell (613) 954-0032

E-mail Addresses:

Jody.Grantham@ms.rc.gc.ca
Richard.Pragnell@ms.rc.gc.ca

These officers may also be contacted by mail at the following address:

Department of National Revenue
Anti-dumping and Countervailing Directorate
191 Laurier Avenue West
Ottawa, ON
K1A 0L5

Internet Address: /sima-lmsi/

Rob Tait
Director General
Anti-dumping and Countervailing Directorate

APPENDIX 1

EXPORTERS OF SUBJECT GOODS

Exporters from the Republic of Korea:

Dong Bang Special Steel Co. Ltd.
597 Ho-Dong, Kam-Ku
Pohang, Kyungbuck
790-380
Republic of Korea

Changwon Specialty Steel Co., Ltd.
66 Shinchon-dong
Changwon, Kyongnam
641-370 Changwon
Republic of Korea

Ssangyong Corp.
24-1, 2-GA, Jeo-dong, Jung-gu
Seoul 100-748
Republic of Korea

U.S. exporters of Korean origin subject goods:

British Steel Alloys
841 South Chesnut
Salt Lake City, Utah
84104
USA

British Steel Alloys, Inc.
10250 S.W. North Dakota St.
Tigard, OR
97223
USA

Energy Steel Products
10002 Windfern Road
Houston, TX
77064
USA

Federal Steel Supply, Inc.
747 Goddard Avenue
Chesterfield, Missouri
63005
USA

Green Bay Supply Co. Ltd.
2331 Topaz Drive
Hatfield, PA
19440
USA

APPENDIX 2

IMPORTERS OF SUBJECT GOODS

A.S.A. Alloys Inc.
105 Claireport Crescent
Etobicoke, ON
N9W 6P7

Atlas Alloys Inc.
Div. of Rio Algom Limited
7945 Coronet Road
Edmonton, AB
T6G 4N7

Atlas Alloys (Pointe Claire)
241 Hymus Blvd.
Pointe Claire, QC
H9R 1G3

Atlas Alloys (Point Edward)
128 Kendall St.
Point Edward, ON
N7V 4G5

Avesta Sheffield Inc
2140 Meadowpine Blvd.
Mississauga, ON
L5N 6H6

Avesta Sheffield Inc
4300 Cote De Liesse Road
Montréal, QC
H4N 2P8

British Steel Alloys
7470 Vantage Way
Tilbury Industrial Park
Delta, BC
V4G 1H1

Huron Alloys Inc.
1330 Plank Road
Sarnia, ON
N7T 7H3

Industries B & X
501 Martin Impasse
Grande-Ile., QC
J6S 4C6

Kanematsu Canada Inc.
6430 Vipond Drive
Mississauga, ON
L5T 1W8

Ssangyong (Canada) Inc.
Suite 1770 - One Bentall Centre
505 Burrard Street
Vancouver, BC
V7X 1M6

Unalloy/IWRC
7925 Goreway Drive
Brampton, ON
L6T 5J7

APPENDIX 3

IMPORTS OF CERTAIN STAINLESS STEEL ROUND BAR

November 1, 1997 to October 31, 1998

Country of Export	Volume Imported (MT)	Per cent of Total Imports
Korea	159.4	5.2 %
Total - Countries Named in Most Recently Completed Investigation*	1,176.3	38.5 %
Other Countries	1,719.9	56.3 %
TOTAL IMPORTS	3,055.7	100 %

Source: Department’s internal information systems.

*The countries named in the most recently completed investigation on certain stainless steel round bar are the Federal Republic of Germany, France, India, Italy, Japan, Spain, Sweden, Taiwan, and the United Kingdom.