Statement of reasons—Preliminary determination: Certain concrete reinforcing bar 5 (RB5 2024 IN)

Complainants

[12] The names and addresses of the complainants is as follows:

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

Gerdau Ameristeel Corporation
1 Gerdau Court
PO Main 615
Whitby, ON  L1N 5T1

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

ArcelorMittal Long Products Canada, G.P.^{Footnote 1}

[13] ArcelorMittal Long Products Canada, G.P. (AMLPC) is the largest rebar producer in Canada and has three rebar producing facilities in Québec. The Contrecoeur East facility produces rebar in coil form while the Contrecoeur West and Longueuil facilities produce cut to length rebar. AMLPC employs approximately 2,200 people and produces a range of products including rebar, billets, flat bars, and wire rod.

Gerdau Ameristeel Corporation^{Footnote 2}

[14] 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 a full range of sizes and grades of rebar. It also produces merchant bar quality (MBQ) and special bar quality (SBQ) in rounds, squares, flats, channels and angles. The parent company of Gerdau is Gerdau S.A of Brazil.

AltaSteel Inc.^{Footnote 3}

[15] The company now known as 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. AltaSteel employs approximately 360 people and makes a variety of round, flat, and square bar steel products for use by downstream remanufacturers in the mining, oil and gas, automotive, construction, agriculture and OEM industries.

Other producers

[16] There are two other domestic producers of rebar in Canada, Max Aicher (North America) Ltd. (MANA)^{Footnote 4} and Ivaco Rolling Mills 2004 LP (IRM)^{Footnote 5}.

[17] MANA is a rebar producer located in Hamilton, Ontario. It 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 rebar in coils and cut bar lengths.

[18] IRM is a producer of wire rod and other long products located 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.^{Footnote 6}

Trade union

[20] The complaint identifies United Steel Workers with its respective locals (5220, 5328, 5442, 6571, 6586, 6951, 8897, and 8918) as the trade union that represents AMLPC’s, Gerdau’s, and AltaSteel’s employees.

Importers

[21] At the time of initiation of the investigation, the CBSA identified five potential importers of the subject goods from CBSA import documentation and from information submitted in the complaint. All of the potential importers were asked to respond to the CBSA’s Importer RFI. Three importers provided a response to the Importer RFI: 14223829 Canada Inc.; Jebsen & Jessen Metals GmbH; and Tata International Metals (Americas) Limited.^{Footnote 7}

Exporters

[22] At the time of the initiation of the investigation, the CBSA identified five potential exporters and/or 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 Request for Information (RFI). Four exporters and two associated suppliers provided substantially complete responses to the CBSA’s Dumping RFI in sufficient time to be considered for the preliminary determination: Conares Metal Supply Limited; Private Joint Stock Company Kamet-Steel; Promet Steel JSC; Tata Steel Manufacturing (Thailand) Public Company Limited; Tata International Metals (Asia) Limited; and Thai Steel Profile Public Company Limited.^{Footnote 8} Together, the four exporters represent 100% of the volume of subject goods exported from the subject countries during the POI.

Definition^{Footnote 9}

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

Additional product information^{Footnote 10}

[24] For further clarity, the subject goods include all hot rolled deformed bar, rolled from billet steel, rail steel, axle steel, low alloy-steel and other alloy steel that does not comply with the definition of stainless steel.

[25] Uncoated rebar, sometimes referred to as black rebar, is generally used for projects in non corrosive environments where anti-corrosion coatings are not required. On the other hand, anti corrosion coated rebar is used in concrete projects that are subjected to corrosive environments, such as road salt. Examples of anti corrosion coated rebar are epoxy or hot dip galvanized rebar. The subject goods include uncoated rebar and rebar that has a coating or finish applied.

[26] Fabricated rebar products are generally engineered using Computer Automated Design (“CAD”) programs, and are made to the customer’s unique project requirements. The fabricated rebar products are normally finished with either a protective or corrosion resistant coating. Rebar that is simply cut-to-length is not considered to be a fabricated rebar product excluded from the definition of subject goods.

[27] Rebar is produced in Canada in accordance with the National Standard of Canada CSAG30.18:21 for Carbon Steel Bars for Concrete Reinforcement (the “National Standard”) prepared by the Standards Association and approved by the Standards Council of Canada (or the most updated revision of this standard).

[28] The following are the most common bar designation numbers in Canada, with the corresponding diameter in millimeters in brackets: 10 (11.3), 15 (16.0), 20 (19.5), 25 (25.2), 30 (29.9), 35 (35.7), 45 (43.7) and 55 (56.4). Rebar sizes are commonly referred to as the bar designation number combined with the letter “M”. For example, 10M rebar is rebar with a bar designation number of 10 and a diameter of 11.3 millimeters. Other diameters may also be demanded, and other measurement systems employed. For example, Imperial measure #7 bar (approximately 22 mm) is a common designation used in the mine roofing industry.

[29] The National Standard identifies two grades of rebar, namely regular or “R” and weldable or “W”. R grades are intended for general applications while W grades are used where welding, bending or ductility is of special concern. Welded rebar has historically been a premium product for the Canadian industry, reflecting the higher cost of alloy steel; however, since all imports have been weldable product, Canadian producers have shifted to treating weldable as a standard product offering that commands no premium. Weldable rebar is substitutable for regular rebar in all applications, though the reverse does not hold.

[30] The National Standard also identifies yield strength levels of 400, 500, and 600. This number refers to the minimum yield strength and is measured in megapascal (“MPa”). The grade and yield strength of rebar is identified by combining yield strength number with grade. Regular rebar with a yield strength of 400 MPa is 400R, and 400W is weldable rebar with a yield strength of 400 MPa. Note that the latest edition of the National Standard (published in 2021) eliminated 500R due to a lack of market demand and added a new high strength grade (600W).

[31] The standard lengths for rebar are 6 meters (20 feet), 12 meters (40 feet) and 18 meters (60 feet), although rebar can be cut and sold in other lengths as specified by customers, or sold in coils.

Manufacturing process^{Footnote 11}

[32] Deformed steel concrete reinforcing bar can be produced in an integrated steel production facility, or using ferrous scrap metal as the principal raw material. Scrap metal is melted in an electric arc furnace and is further processed in a ladle arc-refining unit. The molten steel is then continuously cast into rectangular billets of steel that are cut to length. An integrated facility would also produce billets from molten steel. The billets are then rolled into various sizes of rebar, which is cut to various lengths depending on the customers’ requirements.

[33] Deformed rebar is rolled with deformations on the bar, which provides gripping power so that concrete adheres to the bar and provides reinforcing value. The deformations must conform to requirements set out in national standards.

Product use^{Footnote 12}

[34] Rebar is used in a number of applications, the most common of which is construction. Rebar is most commonly used to reinforce concrete and masonry structures. It enhances the compressional and tensional strength of concrete and helps prevent the concrete from cracking during curing or following changes in temperature. Rebar is also known as “reinforcing steel bar”.

Classification of imports

[35] Beginning January 1, 2022, under the revised customs tariff schedule, imports into Canada of the subject goods are normally classified under the following tariff classification numbers:

1. 7213.10.00.11
2. 7213.10.00.12
3. 7213.10.00.13
4. 7213.10.00.90
5. 7214.20.00.11
6. 7214.20.00.12
7. 7214.20.00.13
8. 7214.20.00.14
9. 7214.20.00.21
10. 7214.20.00.22
11. 7214.20.00.23
12. 7214.20.00.24
13. 7214.20.00.31
14. 7214.20.00.32
15. 7214.20.00.33
16. 7214.20.00.34
17. 7214.20.00.90
18. 7215.90.00.20
19. 7215.90.00.30
20. 7227.90.00.50
21. 7228.30.00.51
22. 7228.30.00.52
23. 7228.30.00.53

[36] These tariff classification numbers may also include non-subject goods, and subject goods may also fall under additional tariff classification numbers.

Bulgaria

Promet Steel JSC (Promet)

[58] Promet Steel JSC (Promet) is a Bulgarian producer and exporter of the subject goods. The company is engaged in the production and sale of steel products, including rebar and other steel bars. The company’s production facilities and administrative offices are located at the same site in Debelt, Burgas, Bulgaria. Promet produces its steel products using purchased and imported steel billet, the vast majority of which is sourced from a related steel producer Kamet Steel JSC (Kamet) in Ukraine.

[59] Promet represents 100% of the volume of subject goods exported to Canada from Bulgaria and 11.8% of subject goods from all countries during the POI. Promet provided a complete response to the Dumping RFI and subsequent supplemental RFIs.

[60] Promet’s response to the Dumping RFI included a database of domestic sales of rebar during the PAP. Where applicable, normal values were either estimated using the methodology of section 15 of SIMA based on domestic selling prices of like goods or of paragraph 19(b) of SIMA, based on the aggregate of cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. The cost of production was estimated pursuant to paragraph 11(1)(a) of Special Import Measures Regulation (SIMR), based on the costs associated with the production of the subject goods. The costs of production were adjusted pursuant to SIMR paragraph 11.2(1)(b), to account for the supply of steel billet from the associated supplier Kamet being acquired at less than the associated cost of production of those input goods. This resulted in an upwards adjustment to Promet’s reported steel billet costs. The amount for profits was estimated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on Promet’s sales of rebar in their domestic market, during the PAP, of the same general category as the subject goods sold to Canada.

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

[62] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 18.1% for Promet, expressed as a percentage of the export price.

Thailand

Section 20

[63] Section 20 is a provision of SIMA that may be applied to determine the normal value of goods in a dumping investigation where certain conditions prevail in the domestic market of the exporting country. In accordance with paragraph 20(1)(b) of SIMA, it is applied where, in the opinion of the CBSA, the government of that country has a monopoly or substantial monopoly of its export trade, it substantially determines domestic prices and there is sufficient reason to believe that the domestic prices are not substantially the same as they would be in a competitive market.

[64] For purposes of a dumping investigation, the CBSA proceeds on the presumption that section 20 of SIMA is not applicable to the sector under investigation absent sufficient information to the contrary. The CBSA may form an opinion where there is sufficient information that the conditions set forth in paragraph 20(1)(b) of SIMA exist in the sector under investigation.

[65] The complaint did not allege section 20 conditions exists in Thailand’s steel sector and the information available to the CBSA at the time of initiation of the dumping investigation did not suggest otherwise. As such, a section 20 inquiry was not initiated during the initiation of the investigation.

[66] Following the initiation of the investigation, information submitted by the exporters/producers in Thailand in response to the CBSA’s RFI, suggested there were price controls on certain steel bars in Thailand. Counsels for the complainants made representations alleging that domestic rebar prices in Thailand are unreliable due to the presence of price-control measures in Thailand. The CBSA sent SRFIs, containing specific questions related to section 20 of SIMA to the exporters/producers in Thailand to obtain additional information.

[67] A section 20 inquiry refers to the process whereby the CBSA collects information from various sources in order to form an opinion as to whether the conditions described under subsection 20(1) of SIMA exist with respect to the sector under investigation.

[68] For the purposes of the preliminary determination, the CBSA analyzed the information on the record which included, information submitted on behalf of the complainants, exporter responses to the CBSA’s RFIs and SRFIs, and the CBSA’s own research. to determine whether an inquiry under section 20 is warranted.

Particular market situation

[69] The CBSA also reviewed whether a Particular Market Situation exists in Thailand’s domestic rebar market, pursuant paragraph 16(2) of SIMA. However, upon reviewing the information submitted on the administrative record by counsels for the complainants and the exporters/producers in Thailand subsequent to the initiation of the investigation and the CBSA’s additional research, the CBSA found insufficient evidence that supported the position that a Particular Market Situation exists in Thailand’s domestic rebar market.

Tata Steel Manufacturing (Thailand) Public Company Limited (TSMT)

[70] Tata Steel Manufacturing (Thailand) Public Company Limited (TSMT) is a producer and exporter of subject goods and was established in 2002. TSMT has three production facilities located in the provinces of Rayong, Chonburi, and Saraburi, Thailand. All of the subject goods shipped to Canada by TSMT were produced at its production facilities in Rayong and Chonburi provinces. The company also maintains its headquarters in Bangkok, Thailand.

[71] TSMT represents 43.8% of the volume of subject goods exported to Canada from Thailand and 4.6% of subject goods from all countries during the POI. TSMT provided complete responses to the Dumping RFI and subsequent SRFIs.

[72] During the POI, the significant majority of TSMT’s sales to Canada were sold through the related trading company, Tata International Metals (Asia) Limited (TIM Asia), located in Hong Kong, and imported by a related company, Tata International Metals (Americas) Limited (TIM Americas), located in Schaumburg, Illinois, USA. After reviewing and analyzing the information submitted on the record, the CBSA determined that TSMT is the true principal in the export sales to Canada and therefore, the exporter for SIMA purposes.

[73] TSMT’s response to the Dumping RFI included a database of domestic sales of rebar during the PAP. Where applicable, normal values were either estimated using the methodology of section 15 of SIMA based on domestic selling prices of like goods or of paragraph 19(b) of SIMA, based on the aggregate of cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. The cost of production was estimated pursuant to paragraph 11(1)(a) of SIMR, based on the costs associated with the production of the subject goods. During the PAP, TSMT acquired steel billets from its related trading company, TIM Asia, used in the production of rebar. Based on the information available on the record, the CBSA has determined that the price paid by TSMT for steel billets sourced by TIM Asia was higher than the price paid by TIM Asia to acquire the materials from an unrelated producer of steel billets. As such, no adjustment was made to TSMT’s reported steel billet costs, pursuant to paragraph 11.2(1)(a) of SIMR. The amount for profits was estimated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on TSMT’s sales of rebar in their domestic market, during the PAP, of the same general category as the subject goods sold to Canada.

[74] TSMT provided information regarding several discounts (i.e., discounts for prompt payment, special discounts, and project discounts) and rebates offered to domestic customers. The CBSA determined that these discounts were not generally granted. As such, the CBSA did not adjust normal values for discounts and rebates.

[75] For sales to TIM Americas, a reliability test was performed by comparing the export price determined on the basis of the lesser of TSMT’s ex-factory selling price of the goods and TIM Americas’ purchase price of the goods (export price under section 24 of SIMA), to the export price determined on the basis of TIM America’s resale price to unrelated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that were additional to those incurred on the sales of like goods for use in the country of export, all costs included in the resale prices that were incurred in reselling the goods in Canada and an amount representative of the average industry profit in Canada (paragraph 25(1)(c) export price). The test revealed that a significant majority of the export prices determined under section 25 of SIMA were equal to or greater than the export price determined under section 24 of SIMA. As such, the export prices determined in accordance with section 24 of SIMA were deemed reliable. The amount for profit was determined in accordance with paragraph 22(a) of the SIMR, based on sales of like goods in Canada by vendors at substantially the same trade level as the importer.

[76] Further to the preceding paragraph, export prices for sales to all importers were estimated using the methodology of section 24 of SIMA, based on the lesser of the exporter’s selling price and the importers’ purchase prices, 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.

[77] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 2.0% for TSMT, expressed as a percentage of the export price.

Thai Steel Profile Public Company Limited (TSC)

[78] Thai Steel Profile Public Company Limited (TSC) is a producer and exporter of subject goods located in Thailand and was established in 1990. TSC has one production facility located in Rayong province, Thailand. All of the subject goods shipped to Canada by TSC were produced at its production facility in Rayong. The company also maintains its headquarters in Samut Sakhon province, Thailand.

[79] TSC represents 56.2% of the volume of subject goods exported to Canada from Thailand and 5.9% of subject goods from all countries during the POI. TSC provided a complete response to the Dumping RFI and subsequent SRFIs.

[80] TSC’s response to the Dumping RFI included a database of domestic sales of rebar during the PAP. Where applicable, normal values were estimated using the methodology of section 15 of SIMA based on domestic selling prices of like goods. Adjustments were made according to paragraph 5(d) of SIMR to account for differences in timing of the exporter's receipt of money paid by importers in Canada and by the TSC's domestic customers.

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

[82] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 6.9% for TSC, expressed as a percentage of the export price.

United Arab Emirates

Conares Metal Supply Limited (Conares Metal Supply)

[83] Conares Metal Supply Limited (Conares Metal Supply) is a producer and exporter of the subject goods located in the UAE. All of the subject goods exported to Canada by Conares Metal Supply were produced at and shipped from its production facility in the Jebel Ali Freezone located in Dubai, UAE.

[84] Conares Metal Supply represents 100% of the volume of subject goods exported to Canada from the UAE and 27.8% of subject goods from all countries during the POI. Conares Metal Supply provided a complete response to the Dumping RFI and subsequent SRFIs.

[85] Conares Metal Supply’s response to the Dumping RFI included a database of domestic sales of rebar during the original PAP (January 1, 2023 to March 31, 2024). However, given the dates of sale for some of the subject goods imported into Canada towards the beginning of the POI occurred before the beginning of the original PAP, the CBSA requested and received an additional sales database with sales made in the second-half of 2022. As such, the revised PAP applicable to Conares Metal Supply’s now consists of domestic sales made between August 1, 2022 and March 31, 2024.

[86] During the POI, where possible, normal values were estimated using the methodology of section 15 of SIMA based on domestic selling prices of like goods sold during the PAP. Where there were insufficient sales of like goods that met the conditions of sections 15 and 16 of SIMA, normal values were estimated using the methodology of paragraph 19(b) of SIMA, based on the aggregate of cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits. The cost of production was estimated pursuant to paragraph 11(1)(a) of the SIMR, based on the costs associated with the production of the subject goods. The amount for profits was estimated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on Conares Metal Supply’s sales of rebar in their domestic market, during the PAP, of the same general category as the subject goods sold to Canada..

[87] During the POI, all of the subject goods exported to Canada by Conares Metal Supply 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.

[88] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 0.4% for Conares Metal Supply, expressed as a percentage of the export price.

Summary of preliminary results

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

Negligibility

[90] Under section 35 of SIMA, the CBSA is required to terminate an investigation prior to the preliminary determination if the volume of goods of a country is negligible.

[91] 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 all goods of the same description that are released into Canada from all countries.

[92] The table above confirms that the volume of imports from each of the named sources are above 3% of the total volume of goods released into Canada. Based on the definition above, the volume of imports from these sources are therefore not negligible.

Insignificance

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

[94] The margin of dumping estimated for Conares Metal Supply is below 2% of the export price and are therefore insignificant. As a result, the investigation will continue in respect of these goods but provisional anti dumping duty will not be imposed on subject goods imported into Canada from that exporter during the provisional period.

[95] For all other exporters, the estimated margin of dumping, expressed as a percentage of the export price, is at or above 2% and is, therefore, not insignificant. In respect of these goods, provisional anti-dumping duties will be imposed on goods of the same description imported during the provisional period.

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