RB3 2020 IN: Certain concrete reinforcing bar
Statement of Reasons—Preliminary determination

Complainants

[12] The contact information of the complainants are as follows:

AltaSteel Inc.
9401 34 St
Edmonton, AB  T6B 2X6

ArcelorMittal Long Products Canada, G.P.
4000 Routes des Aciéries
Contrecoeur, QC  J0L 1C0

Gerdau Ameristeel Corporation
1 Gerdau Court
Whitby, ON  L1N 5T1

[13] AltaSteel Inc. (AltaSteel) was founded in 1955. It has undergone various ownership changes and is now owned by Kyoei Steel Ltd. AltaSteel is a scrap-based mini-mill with melting and casting manufacturing facilities in Edmonton, Alberta.^{Footnote 3}

[14] ArcelorMittal Long Products Canada, G.P. (AMLPC) is the largest rebar producer in Canada and has three rebar producing facilities in Québec.^{Footnote 4} AMLPC is part of the ArcelorMittal family of companies, which is the largest steel producer in the world and has operations in more than 60 countries.

[15] Gerdau Ameristeel Corporation (Gerdau) has manufacturing facilities in Whitby and Cambridge, Ontario and in Selkirk, Manitoba. Gerdau’s three Canadian rebar-producing operations are capable of producing the full range of sizes and grades of rebar. The parent company of Gerdau is Gerdau S.A of Brazil.^{Footnote 5}

Other producers

[16] There are two other domestic producers of rebar in Canada, Max Aicher North America Ltd. (MANA) and Ivaco Rolling Mills 2004 LP (IRM).

[17] MANA is a wholly owned subsidiary of the Max Aicher Group of Companies in Germany. In 2010, MANA acquired the bar mill and certain other assets of the former Stelco Inc. in Hamilton, Ontario from US Steel Canada. MANA’s bar mill produces both hot-rolled bar coils and cut bar lengths.

[18] IRM is a producer of wire rod in L’Orignal, Ontario. IRM was first established in the 1970s and was acquired by Heico Holdings Inc. in 2004. IRM primarily produces wire rod, but will produce rebar occasionally.

[19] Both MANA and IRM filed letters in support of the complaint and provided certain rebar production and sales information with their letter of support.

Trade union

[20] The complainants identified one trade union, the United Steel Workers (with its various locals) that represents persons employed in the production of rebar in Canada.

Importers

[21] The CBSA identified 18 potential importers of the subject goods from CBSA import documentation and from information submitted in the complaint. The CBSA sent an Importer request for information (RFI) to all potential importers of the goods.^{Footnote 6} Three companies provided responses to the Importer RFI.

Exporters

[22] The CBSA identified 60 potential exporters, vendors and producers of the subject goods from CBSA import documentation and from information submitted in the complaint. All of the potential exporters were asked to respond to the CBSA’s Dumping RFI.^{Footnote 7}

[23] Six companies provided responses to the CBSA’s Dumping RFI, as well as six responses from associated suppliers.

[24] Of the responses received, four were considered substantially complete submissions for purposes of a preliminary determination. These submissions and results have been summarized in the Preliminary results of the dumping investigation section, found below.

[25] Post initiation, the complainant, Gerdau, made allegations that a particular market situation (PMS) exists in Vietnam.^{Footnote 8} The CBSA considered evidence supplied by the complainant to be sufficient to examine whether a PMS exists in Vietnam. Consequently, the CBSA sent RFIs pertaining to the alleged PMS to the Government of Vietnam (GOV) as well as state-owned enterprises (SOE).^{Footnote 9} Questions pertaining to PMS were sent to producers of rebar and steel billets in Vietnam.^{Footnote 10} One response was provided to the PMS RFI.^{Footnote 11}

[26] Respondents who have not provided complete submissions have been informed that their information may be used for the purposes of a final determination only if a complete response is provided in a timely fashion, bearing in mind the time limits of the investigation.

Governments

[27] For the purposes of this investigation, the “Government”, refers to all levels of government, i.e., federal, central, provincial/state, regional, municipal, city, township, village, local, legislative, administrative or judicial, singular, collective, elected or appointed. It also includes any person, agency, enterprise, or institution acting for, on behalf of, or under the authority of, or under the authority of any law passed by, the government of that country or that provincial, state or municipal or other local or regional government.

[28] As stated above, the GOV was sent a Government PMS RFI, to which they provided a response.

Normal value

[60] Normal values are generally estimated based on the domestic selling prices of like goods in the country of export, in accordance with the methodology of section 15 of SIMA which relies on domestic prices, or one of the methodologies of section 19. Where the methodology of subsection 19(b) is used, it is based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits.

Export price

[61] The export price of goods sold to importers in Canada is generally estimated in accordance with the methodology of section 24 of SIMA based on the lesser of the adjusted exporter’s sale price for the goods or the adjusted importer’s purchase price. These prices are adjusted where necessary by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.

[62] Where there are sales between associated persons and/or a compensatory arrangement exists, the export price is estimated based on the importer’s resale price of the imported goods in Canada to unrelated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that are additional to those incurred on the sales of like goods for use in the country of export, all costs included in the resale price that are incurred in reselling the goods (including duties and taxes) or associated with the assembly of the goods in Canada and an amount representative of the average industry profit in Canada as provided for in paragraphs 25(1)(c) and 25(1)(d) of SIMA.

Particular market situation (PMS)

[63] Paragraph 16(2)(c) is a provision of SIMA that may be applied when the CBSA is of the opinion that domestic sales of like goods in the country of export do not permit a proper comparison with the sales of the goods to the importer in Canada because a PMS prevails.

[64] Pursuant to subsection 16(2.1), the President may form the opinion that a PMS can exist in respect of any goods of a particular exporter or of a particular country.

[65] In such cases, the CBSA would not estimate normal values using the methodology of section 15 of SIMA, which relies on domestic prices. Accordingly, and where such information is available, the CBSA would look to use one of the methodologies of section 19 to determine normal values.

[66] Where the methodology of paragraph 19(b) has been applied and the CBSA is of the opinion that a PMS also distorts the cost of inputs that are material in the production of the goods, the President will use information in accordance with subsection 11.2(2) of SIMR, that best represents the actual cost of the input to permit a proper comparison.

[67] The CBSA is investigating allegations, made post initiation by the complainant, Gerdau, that a PMS exists with respect to the rebar market in Vietnam. A PMS may be found to exist where normal market conditions or patterns of supply and demand do not prevail, and these circumstances have had a significant impact on the domestic sales of like goods in the country of export. Factors causing such conditions may include government regulations, government support programs, taxation policies, distorted input costs or, any other circumstances. Gerdau alleged that a combination of these factors point towards the existence of a PMS in the Vietnamese rebar market.

[68] Gerdau submitted that the significant presence of Chinese rebar in Vietnam suppresses the prices of Vietnamese produced rebar sold domestically and that the presence of Vietnamese and Chinese state-owned or controlled enterprises in the Vietnamese steel sector generally and in the rebar market more specifically, distorts input costs and further suppresses Vietnamese rebar prices. Gerdau stated that this prevents the CBSA from making a proper comparison between the prices of subject goods and like goods.^{Footnote 19} The CBSA considered the evidence supplied in the complaint to be sufficient to examine whether a PMS exists in Vietnam.

[69] Consequently, the CBSA sent RFIs pertaining to the alleged PMS to the GOV, SOEs, and other known producers of rebar and steel billet in Vietnam.

[70] Counsel for the complainants submitted representations regarding PMS during the preliminary phase of the CBSA’s investigation. Additionally, the CBSA received a response to the Dumping RFI from the sole exporter of subject goods from Vietnam, which contained questions concerning the alleged PMS. This respondent also provided a response to the PMS RFI and made additional representations on this matter. The Vietnam Steel Association (VSA) and the GOV provided a response to the PMS RFI.^{Footnote 20}

[71] The CBSA has considered the evidence on the administrative record. For the purposes of the preliminary determination, the CBSA has not at this time, formed the opinion as to whether a PMS exists.

[72] In the final phase of the investigation, the CBSA will continue to review and analyze the information available and will seek to gather additional information to facilitate forming an opinion as to whether a PMS, pursuant to paragraph 16(2)(c) of SIMA, exists.

Margin of dumping

[73] The estimated margin of dumping by exporter is equal to the amount by which the total estimated normal value exceeds the total estimated export price of the goods, expressed as a percentage of the total estimated export price. All subject goods imported into Canada during the POI are included in the estimation of the margins of dumping of the goods. Where the total estimated normal value of the goods does not exceed the total estimated export price of the goods, the margin of dumping is zero.

[74] The CBSA received Dumping RFI responses from exporters in Algeria, Egypt, Indonesia, Malaysia, Singapore and Vietnam, of which four were considered substantially complete for the purposes of preliminary determination. Requests to provide the required information have been sent out to the other respondents where submissions were not deemed to be substantially complete for purposes of preliminary determination. The CBSA’s letters to these respondents noted the deficiencies in their submissions and advised that they provide a revised RFI response to ensure that the CBSA has sufficient time to review, analyze and verify the information provided. For the purposes of the preliminary determination, sufficient information has not been furnished by those respondents to enable the CBSA to estimate normal values and export prices in accordance with the methodologies provided in sections 15 to 28 of SIMA. As such, the information provided by the respondents, whose submission were not complete, has not been used for the purposes of the preliminary determination of dumping.

[75] Further information regarding each respondent who did submit a complete response is detailed below.

Algeria

Spa Tosyali Iron Steel Industry Algerie^{Footnote 21}

[76] Spa Tosyali Iron Steel Industry Algerie (Tosyali) is a private joint stock company. Tosyali started manufacturing rebar in 2013. All of the subject goods shipped to Canada by Tosyali were produced at its production facilities, located in Béthioua wilaya of Oran, Algeria. The company headquarters is also located in Béthioua wilaya of Oran, Algeria. Exports of subject goods by Tosyali represents 100% of the volume of subject goods exported from Algeria during the POI.

[77] Tosyali provided a substantially complete response to the CBSA’s Dumping RFI, including a database of domestic sales of rebar during the PAP. There were sufficient profitable sales of like goods to estimate normal values in accordance with the methodology of section 15 of SIMA, using the exporter’s domestic prices of rebar in Algeria.

[78] During the POI, all of Tosyali’s subject goods sold to Canada were sold through an unrelated trading company. The CBSA examined a number of relevant factors to identify the true principal for the export sales. It was found that Tosyali is the true principal and is therefore the exporter for purposes of SIMA.

[79] Export prices were estimated using the methodology of section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[80] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 4.5% for Tosyali, expressed as a percentage of the export price.

Egypt

Al Ezz Dekheila Steel Company—Alexandria^{Footnote 22}

[81] Al Ezz Dekheila Steel Company—Alexandria (EZDK) is a joint stock company and a subsidiary of EZZ Steel Company. All of the subject goods shipped to Canada by EZDK were produced at its production facility, located in Alexandria, Egypt. The company headquarters is located in Alexandria, Egypt.

[82] EZDK provided a substantially complete response to the CBSA’s Dumping RFI, including a database of domestic sales of rebar during the PAP. However, there were insufficient domestic sales of like goods that met the requirements of SIMA to estimate normal values based on the methodology of section 15. Therefore, normal values were estimated based on a methodology similar to that described in paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. The cost of production was estimated in accordance with paragraph 11(1)(a) of the SIMR; however the amount for profits could not be determined under section 11(b). Therefore the amount for profits was estimated using the average of the profits found in the other substantially complete responses from exporters and producers in the named countries.

[83] During the POI, all of the subject goods exported to Canada by EZDK were sold to an unrelated importer. Export prices were estimated using the methodology of section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[84] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 22.0% for EZDK expressed as a percentage of the export price.

All other exporters—Egypt

[85] For exporters of subject goods originating in or exported from Egypt that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were estimated on the basis of facts available.

[86] In establishing the methodology for estimating normal values and export prices, the CBSA analyzed all the information on the administrative record, including the complaint filed by the domestic industry, the CBSA’s estimates at the initiation of the investigation and information submitted by exporters of rebar from the named countries.

[87] The CBSA decided that the normal values and export prices estimated for EZDK, the exporter whose submission was substantially complete for the preliminary determination, would be used to establish the methodology for estimating normal values for all other exporters in Egypt. The information submitted by EZDK, rather than the information provided in the complaint or estimated at initiation, was considered to better reflect the other exporters’ actual trading practices during the POI.

[88] The CBSA examined the difference between the estimated normal value and the estimated export price for each individual export transaction from Egypt, and considered that the highest amount (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified. This methodology relies on information related to goods that originated in Egypt and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

[89] As a result, based on the facts available, for exporters that did not provide a response or provided an incomplete response to the Dumping RFI, normal values of subject goods originating in or exported from Egypt were estimated based on the highest amount by which an estimated normal value exceeded the estimated export price, on an individual transaction for EZDK during the POI.

[90] Using the above methodologies, for the preliminary determination, the estimated margin of dumping for all other exporters in Egypt is 22.0%, expressed as a percentage of the export price.

Indonesia

PT Putra Baja Deli^{Footnote 23}

[91] PT Putra Baja Deli (Putra Baja Deli) was established in 2004. All of the subject goods shipped to Canada by Putra Baja Deli were produced at its production facility, located in Serang, Indonesia. The company headquarters is located in Jakarta, Indonesia. Exports of subject goods by Putra Baja Deli represent 100% of the volume of subject goods exported from Indonesia during the POI.

[92] Putra Baja Deli provided a substantially complete response to the CBSA’s Dumping RFI, including a database of domestic sales of rebar during the PAP. Where there were sufficient sales, normal values were estimated based on the methodology of section 15 of SIMA based on domestic selling prices of like goods. Where there were no domestic sales of the like goods, normal values were estimated based on the methodology of paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. The amount for profits was estimated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on Putra Baja Deli’s sales of rebar in their domestic market, during the POI, of the same general category as the subject goods sold to Canada.

[93] During the POI, all of the subject goods exported to Canada by Putra Baja Deli were sold to an unrelated importer. Export prices were estimated using the methodology of section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[94] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 11.3% for Putra Baja Deli, expressed as a percentage of the export price.

Vietnam

Hoa Phat Dung Quat Steel Joint Stock Company^{Footnote 24}

[95] Hoa Phat Dung Quat Steel Joint Stock Company (HPDQ) was established in 2017 as a private corporation. All of the subject goods shipped to Canada by HPDQ were produced at its production facility, located in Binh Dong, Vietnam. The company headquarters is also located in Binh Dong, Vietnam. Exports of subject goods by HPDQ represents 100% of the volume of subject goods exported from Vietnam during the POI.

[96] HPDQ provided a substantially complete response to the CBSA’s Dumping RFI, including a database of domestic sales of rebar during the PAP. Where there were sufficient sales, normal values were estimated based on the methodology of section 15 of SIMA, using the provisions of section 16(1)(c). Where the provisions of paragraph 16(1)(c) were not applicable, normal values were estimated in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[97] In this regard, the amount for profits was estimated in accordance with subparagraph 11(1)(b)(iii) of SIMR.

[98] During the POI, all of the subject goods exported to Canada by HPDQ were sold to unrelated importers.

[99] Export prices were estimated using the methodology of section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[100] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 3.7% for HPDQ, expressed as a percentage of the export price.

All other exporters—Italy, Malaysia and Singapore

[101] As previously stated, the CBSA did not receive substantially complete responses to the Dumping RFI from any exporters in the remaining named countries. As a result, the normal values and export prices for all exporters in Italy, Malaysia and Singapore were estimated on the basis of facts available.

[102] In establishing the methodology for estimating normal values and export prices, the CBSA analyzed all the information on the administrative record, including the complaint filed by the domestic industry, the CBSA’s estimates at the initiation of the investigation, information submitted by exporters of rebar from the named countries and customs documentation.

[103] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were substantially complete for the preliminary determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for estimating normal values since these values better reflect exporters’ actual trading practices during the POI.

[104] The CBSA would normally first consider whether information from an exporter of rebar from the applicable country, who provided substantially complete information, would be appropriate to use as the basis for estimating the margin of dumping for all other exporters in each respective country. However, as no exporters in Italy, Malaysia or Singapore provided a substantially complete response to the CBSA’s Dumping RFI, the CBSA instead considered whether information from exporters of rebar from the named counties who provided substantially complete information, would be appropriate to use as the basis for estimating the margin of dumping.

[105] The CBSA examined the difference between the estimated normal value and the estimated export price for each individual transaction of each of the exporters that provided a substantially complete response, and considered that the highest amount (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified. This methodology relies on information related to goods that were shipped to Canada during the POI and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

[106] Using the above methodology, for exporters that did not provide a response or provided an incomplete response to the Dumping RFI, and for purposes of the preliminary determination, the margin of dumping of subject goods originating in or exported from Italy, Malaysia and Singapore were estimated based on the highest amount by which an estimated normal value exceeded the estimated export price, on an individual transaction, during the POI.

[107] Using the above methodologies, for the preliminary determination, the estimated margin of dumping for all other exporters in Italy, Malaysia and Singapore is 28.4%, expressed as a percentage of the export price.

Summary of preliminary results

[108] A summary of the preliminary results of the dumping investigation respecting all subject goods released into Canada during the POI are as follows:

[109] Under section 35 of SIMA, if at any time before making a preliminary determination the CBSA is satisfied that the actual and potential volume of goods of a country is negligible, the CBSA is required to terminate the investigation with respect to goods of that country.

[110] Pursuant to subsection 2(1) of SIMA, the volume of goods of a country is considered negligible if it accounts for less than 3% of the total volume of goods that are released into Canada from all countries that are of the same description as the goods.

[111] The volume of subject goods from each of the named countries are above 3% of the total volume of goods released into Canada from all countries. Based on the definition above, the volumes of subject goods from these countries are therefore not negligible.

[112] If, in making a preliminary determination, the CBSA determines that the margin of dumping of the goods of a particular exporter is insignificant pursuant to section 38 of SIMA, the investigation will continue in respect of those goods but provisional duties will not be imposed on goods of the same description imported during the provisional period.

[113] Pursuant to subsection 2(1) of SIMA, a margin of dumping of less than 2% of the export price of the goods is defined as insignificant. The margins of dumping, estimated for exporters in each of the named countries, are greater than the threshold of 2% and are therefore not considered insignificant.

[114] A summary of the estimated margins of dumping and provisional duties by exporter is presented in Appendix 1.

The Canada Border Services Agency

[120] The CBSA will continue its investigation and will make final decisions by May 5, 2021.

[121] If the CBSA is satisfied that the goods were dumped, and that the margins of dumping were not found to be insignificant, a final determination will be made. Otherwise, the CBSA will terminate the investigation in respect of those goods and any provisional duty paid or security posted will be refunded to importers, as appropriate.

The Canadian International Trade Tribunal

[122] The CITT has begun its inquiry into the question of injury to the Canadian industry. The CITT is expected to issue its finding by June 4, 2021.

[123] If the CITT finds that the dumping has not caused injury, retardation or is not threatening to cause injury, the proceedings will be terminated and all provisional anti-dumping duty collected or security posted will be refunded.

[124] If the CITT makes a finding that the dumping has caused injury, retardation or is threatening to cause injury, anti-dumping duty in an amount equal to the margin of dumping will be levied, collected and paid on imports of rebar that are of the same description as goods described in the CITT’s finding.

[125] For purposes of the preliminary determination of dumping, the CBSA has responsibility for determining whether the actual and potential volume of goods is negligible. After a preliminary determination of dumping, the CITT assumes this responsibility. In accordance with subsection 42(4.1) of SIMA, the CITT is required to terminate its inquiry in respect of any goods if the CITT determines that the volume of dumped goods from a country is negligible.