Statement of reasons—Expiry review determination: Hollow Structural Sections (HSS 2024 ER)

Decision

Ottawa, February 21, 2025

On February 6, 2025, pursuant to paragraph 76.03(7)(a) of the Special Import Measures Act, the Canada Border Services Agency determined that the expiry of the Canadian International Trade Tribunal’s order made on October 16, 2019 in Expiry Review No. RR-2018-006 is likely to result in the continuation or resumption of dumping of such goods originating in or exported from South Korea and Türkiye.

Executive summary

[1] On September 9, 2024, the Canadian International Trade Tribunal (CITT), pursuant to subsection 76.03(1) of the Special Import Measures Act (SIMA), initiated an expiry review of its order made on October 16, 2019, in Expiry Review No. RR-2018-006, concerning the dumping of structural tubing known as hollow structural sections (HSS) originating in or exported from the Republic of Korea (South Korea) and the Republic of Türkiye (Türkiye).

[2] As a result of the CITT’s notice of expiry review, the Canada Border Services Agency (CBSA), on September 10, 2024, initiated an investigation to determine, pursuant to paragraph 76.03(7)(a) of SIMA, whether the expiry of the order is likely to result in the continuation or resumption of dumping of the subject goods.

[3] The CBSA received responses to the Canadian producer Expiry Review Questionnaire (ERQ) from Nova Steel Inc. and Nova Tube Inc. (Nova), Welded Tube of Canada Corporation (Welded Tube), and Atlas Tube Canada ULC (Atlas Tube).^{Footnote 1} The submissions made by these companies expressed an opinion that the continued or resumed dumping of HSS from South Korea and Türkiye is likely if the CITT’s order expires.

[4] The CBSA did not receive any responses to the importer ERQ or the exporter ERQ.

[5] In addition to responding to the ERQ, Nova, Welded Tube, and Atlas Tube submitted supplemental information prior to the closing of the record.^{Footnote 2} The CBSA also received case briefs from Nova, Welded Tube, and Atlas Tube.^{Footnote 3} The case briefs submitted by the Canadian producers included information supporting their position that continued or resumed dumping of subject goods is likely if the CITT’s order is rescinded. No other case briefs from any party were received by the CBSA.

[6] The analysis of information on the administrative record indicates a likelihood of continued or resumed dumping into Canada of HSS from South Korea and Türkiye should the CITT’s order expire. This analysis relied upon the following factors:

• Substitutability of HSS
• Global Steel & HSS Market Conditions
• Tariffs and Safeguard Measures on Steel Imports and Diversion of HSS into Canada
• Attractiveness of Canadian Market
• Economic Outlook in the Names Countries
• Excess Capacity and Export-Orientation in the Named Countries
• The Inability of Exporters from the Named Countries to Compete at Non-dumped Prices and
• Imposition of Anti-dumping Measures by Authorities of Jurisdictions other than Canada concerning HSS from the Named Countries

[7] Therefore, the CBSA determined under paragraph 76.03(7)(a) of SIMA that the expiry of the CITT’s order in respect of HSS is likely to result in the continuation or resumption of dumping of such goods originating in or exported from South Korea and Türkiye.

Background

[8] On May 21, 2003, following a complaint made by Atlas Tube, Copperweld Corporation and Welded Tube, the Canada Customs and Revenue Agency (CCRA) initiated an investigation, pursuant to subsection 31(1) of SIMA, respecting the dumping of HSS originating in or exported from South Korea, South Africa, and Türkiye.

[9] On November 17, 2003, pursuant to subsection 41(1) of SIMA, the Commissioner of the CCRA made a final determination of dumping concerning the subject goods from South Korea, South Africa and Türkiye. An injury finding was subsequently issued by the CITT on December 23, 2003, pursuant to subsection 43(1) of SIMA.

[10] On August 7, 2008, following the initiation of an expiry review of the CITT’s finding of injury, the CBSA determined that the expiry of the finding was likely to result in the continuation or resumption of dumping of HSS from South Korea, South Africa and Türkiye. On December 22, 2008, in Expiry Review No. RR-2008-001, the CITT continued its finding concerning HSS from South Korea, South Africa, and Türkiye.

[11] On March 11, 2011, the CBSA completed its last re-investigation to update the normal values and export prices of HSS. No exporters cooperated.

[12] On, August 8, 2013, following the initiation of an expiry review of the CITT’s order, the CBSA determined that the expiry of the order was likely to result in the continuation or resumption of dumping of HSS from South Korea, South Africa, and Türkiye. On December 20, 2013, in Expiry Review No. RR-2013-001, the CITT continued its order concerning HSS from South Korea and Türkiye and rescinded its order concerning the goods from South Africa.

[13] On May 9, 2018, following the initiation of an expiry review of the CITT’s order, the CBSA determined that the expiry of the order was likely to result in the continuation or resumption of dumping of HSS from South Korea, and Türkiye. On October 16, 2019, in Expiry Review No. RR-2018-006, the CITT continued its order concerning HSS from South Korea and Türkiye.

[14] On January 18, 2024, the CBSA concluded an expedited review of HSS exported by Histeel Co., Ltd. (Histeel). Since this date, Histeel is the only exporter who has been issued normal values. All imports of subject goods from other exporters are subject to an anti-dumping duty equal to 89% of the declared export price in accordance with the ministerial specification.

[15] On September 9, 2024, the CITT initiated an expiry review of its order made in Expiry Review No. RR-2018-006, pursuant to subsection 76.03(1) of SIMA.

[16] On September 10, 2024, the CBSA initiated an expiry review investigation to determine whether the expiry of the order is likely to result in continued or resumed dumping of the subject goods. The CBSA must make a determination no later than February 6, 2025.

Product definition

[17] The subject goods, referred to as “hollow structural sections”, are defined as:

[18] For purposes of this expiry review investigation, “hollow structural sections” refer to goods that meet the above product definition, irrespective of the country of origin or export. For example, “hollow structural sections” also refer to goods produced domestically in Canada that meet the above product definition.

Classification of imports

[23] Beginning January 1, 2022, the subject goods are usually classified under the following tariff classification numbers:

1. 7306.30.00.41
2. 7306.30.00.51
3. 7306.30.00.61
4. 7306.30.00.71
5. 7306.30.00.89
6. 7306.50.00.00
7. 7306.61.00.39
8. 7306.61.00.49

[24] Prior to January 1, 2022, the subject goods were usually classified under the following tariff classification numbers:

1. 7306.30.00.20
2. 7306.30.00.30
3. 7306.50.00.00
4. 7306.61.00.10
5. 7306.61.00.20

[25] This listing of tariff classification numbers is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.

Period of review

[26] The period of review (POR) for the CBSA’s expiry review investigation is January 1, 2021 to June 30, 2024.

Canadian industry

[27] The Canadian industry for HSS is comprised of the following producers:

• Atlantic Tube & Steel Inc. of Mississauga, Ontario
• Atlas Tube Canada ULC of Harrow, Ontario
• Bull Moose Tube Ltd. of Burlington, Ontario
• Fati Steel Inc. of Varennes, Quebec
• Nova Steel Inc. of Lasalle, Quebec
• Nova Tube Inc. of Montreal, Quebec
• Welded Tube of Canada Corp. of Concord, Ontario
• Quali-T-Tube Inc. of Bromont, Quebec

[28] Three of the Canadian producers which provided ERQ responses in this expiry review are regarded as the largest producers of HSS in Canada and estimated to account for about 90% of the volume of Canadian HSS production. These parties are Atlas Tube, Nova, and Welded Tube.^{Footnote 4} The remaining producers, with comparatively smaller operations, account for the balance of production in Canada.

[29] Atlantic Tube & Steel Inc., Bull Moose Tube Ltd., Fati Steel Inc., and Quali-T-Tube Inc. did not participate in this expiry review investigation. As such, no information on their production and sales was available to the CBSA.

Atlas Tube

[30] Atlas Tube, located in Harrow, Ontario, began producing HSS in 1984. Atlas Tube is now the largest HSS producer in Canada and its parent company Zekelman Industries, with several divisions in the United States, is the largest HSS producer in North America. Atlas Tube and Zekelman Industries produce the broadest range of HSS sizes in Canada and the United States.^{Footnote 5}

Nova

[31] Nova Tube Inc., located in Montreal, QC, and Nova Steel Inc., located in Lasalle, QC, are subsidiaries of Novamerican Steel Inc. Nova Tube focuses on pipe and tubular product production (CSWP, pipe shells, and HSS) while Nova Steel specializes in steel products.^{Footnote 6}

Welded Tube

[32] Welded Tube, a privately-held corporation located in Concord, Ontario, has been manufacturing steel tubing since 1970. The first HSS mill was installed in 1973 and Welded Tube currently operates three HSS mills.^{Footnote 7}

Canadian market

[33] The imports of HSS during the POR are presented in Table 1 below. The CBSA cannot release specific quantitative data regarding the volume and value of Canadian production of HSS sold for domestic consumption, as it would lead to the disclosure of confidential information of the Canadian producers.

Enforcement data

[37] In the enforcement of the CITT’s order during the POR, as detailed in Table 2 below, the CBSA assessed a total amount of anti-dumping duty of $736,577 on subject goods imported from the named countries. The total value for duty of subject goods imports during the POR was approximately $741,062. As a percentage of the total value for duty, the anti-dumping duty assessed during the POR was equal to 99.4%. The total quantity of subject goods, on which anti-dumping duty was assessed was approximately 371 MT.

Parties to the proceedings

[38] On September 9, 2024, the CBSA sent a notice concerning the initiation of the expiry review investigation and ERQs to known Canadian producers, importers, and exporters.

[39] The ERQs requested information relevant to the CBSA’s consideration of the expiry review factors, as listed in subsection 37.2(1) of the Special Import Measures Regulations (SIMR).

[40] The CBSA received responses to the Canadian producer ERQ from Nova, Welded Tube, and Atlas Tube.^{Footnote 10} The submissions made by these companies expressed an opinion that the continued or resumed dumping of HSS from South Korea and Türkiye is likely if the CITT’s order expires. In addition to responding to the ERQ, Nova, Welded Tube, and Atlas Tube submitted supplemental information prior to the closing of the record.^{Footnote 11}

[41] Nova, Welded Tube, and Atlas Tube provided case briefs to the CBSA in support of their position that continued or resumed dumping of HSS from South Korea and Türkiye is likely if the CITT’s order expires.^{Footnote 12}

[42] No other party provided a case brief or reply submission.

Information considered by the CBSA

Position of the parties: Dumping

Consideration and analysis: Dumping

[88] In making a determination under paragraph 76.03(7)(a) of SIMA whether the expiry of the order is likely to result in the continuation or resumption of dumping of the goods, the CBSA may consider the factors identified in subsection 37.2(1) of the SIMR, as well as any other factors relevant under the circumstances.

[89] Guided by these aforementioned factors, the CBSA conducted its review based on the documentation submitted by the various participants and its own research, all of which can be found on the administrative record. The following list represents a summary of the CBSA’s analysis conducted in this expiry review investigation with respect to dumping:

• Substitutability of HSS
• Global Steel & HSS Market Conditions
• Tariffs and Safeguard Measures on Steel Imports and Diversion of HSS into Canada
• Attractiveness of Canadian Market
• Economic Outlook in the Names Countries
• Excess Capacity and Export-Orientation in the Named Countries
• The Inability of Exporters from the Named Countries to Compete at Non-dumped Prices and
• Imposition of Anti-dumping Measures by Authorities of Jurisdictions other than Canada concerning HSS from the Named Countries

Substitutability of HSS

[90] The significant number of anti-dumping measures involving steel products, both in Canada and other jurisdictions, are in large part related to the very nature of the products and the industry. The factors that relate to the nature of the product include the substitutability of steel made to international specifications, as well as the capital-intensive nature of steel production. The combined effects of these characteristics can have a significant impact on pricing.

[91] Generally speaking, like many steel products, HSS produced to an international specification in a given country is physically interchangeable with what is produced to the same specification in any other country. As such, the goods compete amongst themselves regardless of origin and share the same channels of distribution and the same potential customers. This means that HSS must compete in markets that are extremely price sensitive, where price is one of the primary factors affecting purchasing decisions. Furthermore, because of this high degree of price sensitivity, prices in a given market may tend to converge over time towards the lowest available price offerings.

[92] This commodity nature of HSS has been consistently confirmed by the CITT in previous expiry reviews on HSS. In the 2013 expiry review, the CITT stated:

[93] Furthermore in the 2018 expiry review, the CITT stated:

[94] Given the substitutability and the commodity nature of HSS, when anti-dumping measures are put in place against a particular source, other sources of HSS emerge. This is evident from the number of measures in Canada, both historically and currently, with respect to other welded tube products (i.e. standard pipe, line pipe, CSWP).

[95] Furthermore, the equipment used to produce other welded tubular steel products (e.g. standard pipe and CSWP) could also be used to produce HSS. This has been noted in all three expiry reviews, and most recently mentioned in the 2018 expiry review where the CITT stated:

[96] The ability for a foreign producer to manufacture subject goods at facilities that produce other welded pipe and tube is significant, given the flexibility it affords the producer to easily switch production to subject goods where market conditions are favorable to do so.

[97] Given the trade measures against tubular products originating in the subject countries identified later in this report, the absence of the CITT order on HSS would provide a clear opportunity to capitalize on this flexibility as the trade restrictions make exports of other welded tubular products more difficult. Additionally, due to the price sensitivity of HSS and the fact that HSS produced abroad versus domestic are virtually interchangeable, if the CITT’s order expires there is a likelihood of continued or resumed dumping of subject goods into Canada.

Global Steel & HSS Market Conditions

[98] In July 2024, the IMF, in its World Economic Outlook update, projects a global growth of 3.2% in 2024 and 3.3% in 2025 which remains stable when compared to a 3.5% growth in 2022 and 3.3% in 2023.^{Footnote 54} The tightening of central bank policy to combat inflation will result in higher interest costs and pose challenges to firms refinancing their debt. The IMF notes that increased interest rates will lead to weaker business and residential investment.^{Footnote 55}

[99] In the 2018 expiry review of HSS, the CITT noted that “the Tribunal has recognized the existence of global steel overcapacity and its continued detrimental impact on global steel trade.”^{Footnote 56} According to a report by the OECD, steel capacity is continuing to be made at a rapid pace while global steel demand remains sluggish, and the sector’s profitability has slipped to unsustainable lows. In 2023, world crude steelmaking capacity was estimated at 2,432 million tonnes (mmt), exceeding global steel production by 543 mmt. Over the last five years, global steel capacity has increased by approximately 62 mmt and has projects underway or planned to add another 157 in the next three years while demand is only projected to increase by about 1.9% or 36 mmt per year.^{Footnote 57}

[100] In addition, a precursor of steel demand – the real estate and construction sectors – are also feeling heavy pressure from the inflationary environment. According to Nova, the construction sector is the main downstream industry for HSS. The global construction industry is projected to grow by only 2.2% in 2024, following growth of 4.1% in 2023. From 2025 to 2030, annual construction growth is projected at 2.7% in light of downside risks and economic pressures. For instance, high interest rates have driven up construction costs, and residential construction projects have contracted by 4.5% in 2023 and are forecasted to contract another 3.2% in 2024. Commercial construction is expected to have some growth from 2024 through 2027 but remain only 5% higher than in 2019. The global construction industry remains susceptible to various supply chain risks including competitive climates, geopolitical risks from ongoing conflicts and trade disputes, shortages and disruptions for materials including labour shortages and construction delays, among others.^{Footnote 58}

[101] Tightening global monetary policy, and a downstream slowdown in the construction sector is putting significant pressure on the global steel market. If the CITT’s order expires, the current volatility in the market represents an opportunity for exporters of the named countries to dump excess goods into Canada. As a result, this increases the likelihood of continued or resumed dumping of subject goods to Canada.

[102] Additionally, with the ever-increasing excess capacity of steel producers, HSS producers in the named countries will be incentivized to export to the Canadian market to improve capacity-utilization if the CITT’s order expires. As a result, this increases the likelihood of continued or resumed dumping of subject goods to Canada.

Tariffs and safeguard measures on steel imports and diversion of HSS into Canada

[103] On March 8, 2018, the United States issued a proclamation regulating imports of steel into the United States under section 232 of the US Trade Expansion Act of 1962, imposing tariffs of 25% on imports of steel into the United States.^{Footnote 59}

[104] Although tariffs still remain on imports from Türkiye, South Korea negotiated changes to the US-Korea Free Trade Agreement (KORUS), which removed the surcharges and imposed a quota on South Korean exports of steel to the United States.^{Footnote 60} Quotas which restrict exports from South Korea to the United States to levels this far below pre-quota levels will likely result in diversion of those exports to other markets.

[105] These section 232 measures created a ripple effect as the EU also announced their own provisional tariff measures on July 19, 2018 to address the reality of goods being diverted from the United States. The EU later replaced the provisional tariffs with definitive safeguard measures, including a tariff rate quota system for HSS from Türkiye and South Korea (shared with other countries). In June 2024, the EU announced that it is extending steel safeguard measures until 2026.^{Footnote 61}

[106] Divergence of exports was a key rationale for the EU’s extension of the definitive safeguard measures. In its official release, the European Commission stated:

[107] Due to the geographic proximity of the United States to Canada and the size of the American market for steel, compounded with the effect of European safeguard measures against HSS imports and the demand for HSS in Canada, the imposition of these measures will likely cause HSS to be diverted to Canada and price pressures already created by existing non-subject sources noted earlier in this report by the Canadian producers are likely to result in dumping.

Attractiveness of Canadian Market

[108] According to the IMF, real GDP growth in Canada was 1.2% in 2023 and was expected to remain close at 1.3% in 2024 but recover slightly to 2.4% in 2025. It also reported that inflation is cooling more in line with expectations, is ahead of the United States in the easing cycle,^{Footnote 62} and is expected to reach 2% in 2025.^{Footnote 63}

[109] Following a period of high inflation and rising interest rates, the Bank of Canada has announced a series of reductions to the target overnight lending rate since June 2024. Most recently, on December 11, 2024, the Bank of Canada reduced its target rate by 50 basis points to 3.25% to support growth and keep inflation close to the middle of the 1-3% target.^{Footnote 64}

[110] Sectors which normally procure HSS, such as the construction and agricultural sectors, are projected to grow in the near future. BuildForce Canada believes that a recent downturn to residential construction will be reversed in 2025 due to interest rate easing and continue growing into 2028. Similarly, it is projected that non-residential construction will grow steadily driven by public sector investment in health care, as well as robust investment from the private sector.^{Footnote 65} For the agricultural sector, Agri-Food Canada expected 2024 net cash income to be 28 percent above the 2018-2022 average which can translate into stronger purchasing power for farmers to purchase machinery using HSS.^{Footnote 66}

[111] The Canadian market for HSS will remain attractive for a few reasons. Growth in Canada’s economy is expected to increase over the near future. Interest rates in Canada have decreased along with inflation. The CBSA notes that as interest rates fall, the construction sector will begin to recover, largely due to decreased borrowing costs. Consequently, demand for HSS in Canada will begin to rise. Additionally, the agricultural sector has already shown signs of improvement in the last five years and the growth is continuing, allowing farmers to make additional investments into agricultural equipment or buildings made with HSS. Thus, if the CITT’s order expires there is an increased likelihood of the resumption or continuation of dumped subject goods into Canada.

South Korea

Economic Outlook

[112] According to the IMF, South Korea experienced real GDP growth rates of 2.6% and 1.4% in 2022 and 2023, respectively. It is also projected to have growth rates of 2.5% and 2.2% in 2024 and 2025, respectively.^{Footnote 67}

[113] Over the past few years, successive interest rate hikes to combat inflationary pressures in South Korea have severely impacted the construction sector. High interest rates led housing prices to a nominal decline of about 9% in June 2023 from their post-pandemic peak. Consequently housing transactions spiraled down and inventories of unsold properties surged, slowing mortgage lending. The weak housing market has also reverberated on project financing in the construction sector; high interest rates devalued the real estate collateral in asset-backed securities, increased the debt servicing delinquency rates, and forced certain construction companies to default on their debts or to reach an agreement with their creditors.^{Footnote 68}

[114] South Korean authorities intervened to ward off severe declines in housing prices by easing macro-prudential regulations such as reducing housing taxes, relaxing laws pertaining to zoning and reconstruction, and introducing new lending programs.^{Footnote 69} The Bank of Korea has also lowered its policy rate to 3% with a 25 basis point cut as recent as November 28, 2024.^{Footnote 70} These regulations and policy changes seem to have stabilised the falling housing prices; however, housing market sentiment is expected to remain hesitant, due to high household debt levels, in the year ahead before it starts gaining confidence.^{Footnote 71}

[115] Commercial real estate is anticipated to pick up as the market sentiment improves, with the office sector to remain buoyant due to demand supply imbalance. The retail sector is also expected to rebound, as foreign tourists come back and households improve their purchasing power due to abating inflation and debt levels. Vacancy rate is projected to remain high in logistics, which will eventually be absorbed as economic activities increase. All in all, investment in the commercial sector will remain timid in the short-run and will gradually pick up, pending interest rate cuts, with the office sector leading the way.^{Footnote 72}

[116] Inflationary pressure is easing and trending down from its peak in July 2022 towards the 2% target, despite showing stubbornness in the food and energy sectors. The IMF projects inflation, as measured by the consumer prices, to post 2.5% rate in 2024 and to display a downward trend in 2025 to attain 2.0%.^{Footnote 73}

[117] The labour market remains resilient with an unemployment rate expected to reach 3.0% in 2024 and to slightly edge up to 3.1% in 2025, according to the IMF. It is important to note that the Korean fertility rate is among the lowest in the world and the population is set to halve in the next 60 years. This will result in increasing old-age dependency ratio, decreasing labour supply thus exerting pressure on government fiscal policies, economic growth, and consequently the real estate market. Additionally, the labour market duality, regular versus non-regular workers, shows a big gap in pay, job quality and security, productivity and social protection, restricting access of non-regular workers to credit markets.^{Footnote 74}

[118] In sum, high interest rates resulting in elevated debt servicing levels coupled with inflationary pressures and falling housing prices will remain a drag on consumption. The housing real estate sector is expected to remain stagnant in the near future, and the commercial real estate to fare slightly better. The expected interest rates cuts will not have an immediate effect on market sentiment, as there is a delayed response to the intended monetary policy goals. The labour market stayed resilient and prevented a contraction of domestic demand; however it is aging as fertility rate is decreasing. If the fertility rate is not reversed along with tapping into underutilized labour resources and immigration, there will be a shortage in labour supply and consequently higher construction costs. Regulating the labour market duality will also give access to credit markets to a large portion of workers. In the face of a hesitant real estate market, Korean exporters and producers of HSS will have no choice but to go after opportunities abroad to liquidate their excess inventories.

Excess Capacity and Export-Orientation

[119] According to the OECD, steel excess capacity is set to become increasingly problematic in the coming years. From 2019 to 2023, South Korea’s steel capacity remained constant at 81.6 mmt.^{Footnote 75}

[120] Welded Tube contends that a shrinking domestic construction sector coupled with increased competition in the Korean market with Chinese steel imports has consequently exacerbated Korean HSS producers’ excess capacity issues. Indeed, the issue of excess capacity was expressly identified by the President of Hyundai Steel Pipe, who observed that in the small diameter and square pipe markets, “the steel pipe industry needs to make efforts to escape the low-profit structure due to continued low-price competition caused by oversupply.” While excess production capacity data is not available for Korean HSS producers, the magnitude of their total capacity and the current slowdown in the Korean market together support the inference that excess capacity is of a sufficient scale that would lead exporters to resume dumping in Canada if the order were not renewed.^{Footnote 76}

[121] The participating Canadian producers all provided estimates of the production capacity for South Korean HSS producers. Nova submitted a publicly available estimate of 5,188,000 MT for all producers in 2024.^{Footnote 77}

[122] As noted earlier, according to the OECD, South Korea was on pace to export 26,929,000 tonnes of steel products in 2023, an increase of 5.8 percent on a year-on-year basis. Given that South Korea was estimated to have produced 53 million tonnes of finished steel products in 2023, this suggests that nearly half of its production is destined for exports, which is supported by steelmaker SeAH who stated that export sales of steel pipe exceed domestic sales, comprising of 54 percent of all sales.^{Footnote 78}

[123] It was also noted that several South Korean producers such as SeAh Steel, Hyundai Steel, and Histeel Pipe & Tube Inc., have subsidiaries in North America, allowing easier access to the North American market.^{Footnote 79} Furthermore, Nova and Welded Tube submitted that several export-oriented statements have been made in Korean exporters’ annual statements such as Histeel stating that “they export to 30 countries around the world, and established an overseas sales corporation for steel products to conquer the North American market.^{Footnote 80}

[124] Lastly, it was noted that Korea HSS producers possess certifications that meet international manufacturing and factory standards, facilitating South Korea’s export-orientation for the products. In Canada, South Korean subject goods are fully substitutable for domestic HSS. Many producers hold certifications for the ASTM A500 and ASTM A513 standards (e.g., SeAh Steel and Histeel’s HSS products comply with these two standards),which is another indicator that Canada continues to be an attractive market for South Korean HSS and that these producers are willing and able to produce HSS for the Canadian market.^{Footnote 81}

[125] Given that South Korea has some of the largest pipe producers in the world, the excess capacity to fulfill the needs of the Canadian market, and have an export-orientation, it is likely that excess capacity would be utilized at low prices to Canadian customers if the order is rescinded.

Inability to Compete at Non-dumped Prices

[126] As can be seen in Table 1, import volumes of subject goods from South Korea were virtually non-existent during the POR. This trend continued from the last expiry review in 2018 where similar results were found by the CBSA.^{Footnote 82}

[127] Based on the Enforcement data section, a total of approximately 71 MT (value of $203,000) entered Canada during the POR. Subject imports of HSS from South Korea were assessed a total of $174,552 in anti-dumping duties. This is in contrast to the approximately 514,667 MT imports from all other sources.

[128] For the first time since the HSS final determination in 2003, an exporter from South Korea participated in a SIMA proceeding in 2023 during the CBSA’s expedited review of HSS exported to Canada by Histeel. At the conclusion of the expedited review in January 2024, normal values were determined for Histeel in accordance with section 15 and paragraph 19(b) of SIMA.^{Footnote 83} Although Histeel obtained normal values at the beginning of 2024, import volumes still remained virtually non-existent from South Korean exporters. In fact, 2024 was on pace to have the lowest volume of imports from South Korea with a total of 0.07 MT imported in H1 2024.

[129] In conclusion, although recent evidence shows that exporters of HSS from South Korea do have an interest in the Canadian market via the request for an expedited review in 2023, subject imports continue to remain almost null. The continued lack of a presence in the Canadian market, even with established normal values under section 15 and paragraph 19(b), show that exporters of HSS from South Korea are unable to compete at non-dumped prices. As a result, if the order is rescinded, there is an increased likelihood of the resumption or continuation of dumped subject goods into Canada.

Imposition of Anti-dumping Measures by Authorities of Jurisdictions other than Canada concerning HSS from South Korea

[130] Based on the information on the record, two countries (other than Canada) have imposed anti-dumping measures on HSS from South Korea. The countries include Australia and the United States.

[131] The United States Department of Commerce (USDOC) published its final decision with respect to heavy walled rectangular welded carbon steel pipes and tubes (HWR), which includes HSS products, from South Korea, Mexico, and Türkiye on July 15, 2016. The USDOC determined dumping margins ranging from 2.34% and 3.82% on subject goods from South Korea. In the USDOC’s most recent sunset review of 2021, it was found that the revocation of the order of the subject goods from South Korea would likely lead to the continuation or resumption of dumping.^{Footnote 84} In the United States International Trade Commission’s (USITC) most recent sunset review of 2022, it was found that the revocation of the order would be likely to lead to continuation or recurrence of material injury.^{Footnote 85}

[132] On May 27, 2022, the Australia Anti-dumping Commission concluded its sunset review of HSS from China, South Korea, Malaysia, and Taiwan. In the decision the Commission determined dumping margins from 0% to 13.8% for South Korean exporters. The Commission also determined that dumping would be likely to continue if the anti-dumping measures expired.^{Footnote 86}

[133] Consequently, while the record does not indicate that there are a large number of anti-dumping measures concerning South Korean HSS in other countries, the fact that one of those measures concerns the United States is significant, given the size of that market and the proximity of the United States to Canada.

CBSA Anti-dumping Measures Concerning South Korea

[134] The CBSA currently has seven other anti-dumping measures against South Korean steel products, three of which are tubular goods as follows:

• CSWP—2012^{Footnote 87}
• Plate—2013^{Footnote 88}
• Concrete Reinforcing Bar (Rebar)—2014^{Footnote 89}
• OCTG—2015^{Footnote 90}
• Carbon Steel Line Pipe—2017^{Footnote 91}
• Cold-rolled steel sheet—2018^{Footnote 92} and
• Corrosion-resistant steel sheet—2019^{Footnote 93}

[135] As such, notwithstanding the lack of participation in most proceedings related to the Canadian anti-dumping measures on HSS, exporters in South Korea have continued to have an active – and recent – interest in the Canadian market, including those exporting pipe and tube products, as evidenced by the numerous anti-dumping measures against these products noted above.

Türkiye

Economic Outlook

[136] According to the IMF, Türkiye experienced real GDP growth rates of 5.5% and 4.5% in 2022 and 2023, respectively. It is also projected to have further declining growth rates of 3.6% and 2.7% in 2024 and 2025, respectively.^{Footnote 94}

[137] The OECD notes that inflation in 2022 and 2023 was 72.3% and 44.6%, respectively.^{Footnote 95} As of December 2024, inflation remained close to 2023 levels at 44.38% but experienced an extremely volatile year reaching a peak of 75.45% in May 2024.^{Footnote 96} Inflation has risen to a 20-year high, exacerbated by global supply constraints and buoyant domestic and external demand.

[138] The high interest rates imposed by the central bank to curb inflation have made it difficult for construction companies to access financing. As a result, the issuance of new building permits and residential unit approvals is in sharp decline. Building permit numbers peaked in Q4 2023 but have since decreased in Q1 and Q2 2024. In Q2 2024, the number of buildings, dwelling units, and floor area of buildings decreased by 22.7%, 28.9%, and 30.9%, respectively, compared with the same period in 2023. At the same time, construction costs have surged by 66% year on year, driven by a 50% increase in material prices. These higher costs, coupled with limited credit access, have made new construction projects financially unviable for many developers, leading to a slowdown in the construction sector. Although there was reconstruction activity following the earthquakes in February 2023, this activity was limited and has slowed. A government official told Reuters that there is "insufficient funding in the budget to open new tenders".^{Footnote 97}

[139] The economic situation in Türkiye has been further compounded by a depreciating currency. The Turkish lira depreciated significantly and rapidly, declining by 89% since 2017 (from 0.3565 in 2017 to 0.0398 in September 2024). Since 2021, it is estimated that the Turkish central bank has allocated over USD$177 billion to bolster the value of the Turkish lira. Just in 2023, the Turkish central bank incurred a loss of US$ 25 billion mostly due to significant hikes in interest rates and expenses associated with government supported savings program that protected depositors against currency depreciation. With shrinking foreign exchange reserves and the threat of possible default, the Turkish government has reversed policies that maintain the value of the Turkish lira and sharply increased interest rates, which is expected to slow domestic demand.^{Footnote 98}

[140] After periods of consecutive unemployment rates above 10% since 2019,^{Footnote 99} the unemployment rate cooled off in 2023 at a rate of 8.9%.^{Footnote 100} According to the OECD, the structure of the Turkish economy has changed considerably in the past two decades and will continue to change. Job creation in business service and manufacturing sectors coupled with urbanisation has raised living standards and allowed many workers to move away from low-productivity subsistence farming. Lower income regions in the Eastern parts of the country could close part of the gap in living standards. Exports increased as the economy got more integrated into global value chains. Labour productivity, also spurred by increased competition with worldwide markets, rose by more than 3% annually over 2003-19.^{Footnote 101}

[141] Given the economic outlook, harsh financial and monetary conditions and a struggling construction sector, the demand for HSS in Türkiye is likely to remain low. As domestic demand of HSS is not expected to rebound in the near future, it is likely that producers in Türkiye will rely heavily on export markets which may increase the likelihood of continued or resumed dumping of subject goods into Canada if the CITT’s order expires.

Excess Capacity, Weak Demand, and Export-Orientation

[142] According to the OECD, steel excess capacity is set to become increasingly problematic in the coming years, including expansions to capacity in Türkiye. Since 2019, Türkiye’s capacity has grown from 50.7 mmt to 57.4 mmt in 2023.^{Footnote 102}

[143] Nova submitted a publicly available estimate of 3,587,000 MT for all producers of HSS in 2024.^{Footnote 103} As reported by CEBID (the Turkish Steel Pipe Manufacturers Association), Turkish welded steel pipe producers (including HSS) for 2021-2023 had a utilization rate of 61%, 64%, and 60%, respectively.^{Footnote 104}

[144] As noted earlier in the report, Türkiye is the fourth largest steel exporter globally with exports totalling approximately 12.38 million tonnes in 2023,^{Footnote 105} including 1,286,218 MT of HSS.^{Footnote 106} Despite a contraction in overall steel and HSS exports between 2022 to 2023 owing to weakness in export markets such as the European Union, Israel, and Morocco^{Footnote 107}, there has been an increase in HSS exports when comparing H1 2023 to H1 2024.^{Footnote 108}

[145] Atlas noted that on the domestic side, Türkiye’s steel market has been struggling to compete with Chinese and Russian steel imports. Türkiye’s steel imports from China have surged from 396,000 tons in 2020 to 3.3 million tons in 2023, threatening the viability of steel producers in Türkiye. Turkish producers are also unable to sell their production due to the combination of low-priced imports from China and rising costs. Russian steel producers began exporting to Türkiye at reduced prices in 2022. GMK reported on August 24, 2022 that Turkish steel exporters may halt their activities domestically in October or November due to reduced competitiveness, partly driven by the influx of cheap Russian steel in the local market.^{Footnote 109}

[146] Public statements of the importance of HSS exports to sustain operations, have also been made by Turkish HSS producers including statements from Toscelik, Borusan, Cayirova Boru, Cinar Boru, MMZ, Noksel, and Ozdemir.^{Footnote 110}

[147] Given that Türkiye has some of the largest pipe producers in the world, the excess capacity to fulfill the needs of the Canadian market, and have an export-orientation, it is likely that excess capacity would be utilized at low prices to Canadian customers if the order is rescinded.

Inability to Compete at Non-dumped Prices

[148] As can be seen in Table 1, import volumes of subject goods from Türkiye were virtually non-existent during the POR. This trend continued from the last expiry review in 2018 where similar results were found by the CBSA.^{Footnote 111}

[149] Based on the Enforcement data section, a total of approximately 300 MT (value of $578,014) entered Canada during the POR. Subject imports of HSS from Türkiye were assessed a total of $517,174 in anti-dumping duties. This is in contrast to the approximately 514,667 MT imports from all other sources.

[150] The continued lack of a presence in the Canadian market, show that exporters of HSS from Türkiye are unable to compete at non-dumped prices. As a result, if the order is rescinded, there is an increased likelihood of the resumption or continuation of dumped subject goods into Canada.

Imposition of Anti-dumping Measures by Authorities of Jurisdictions other than Canada concerning HSS from Türkiye

[151] Based on the information on the record, the United States has imposed anti-dumping measures on HSS from Türkiye.

[152] The USDOC published its final decision with respect to HWR from South Korea, Mexico, and Türkiye on July 15, 2016. The USDOC determined dumping margins ranging from 0% and 35.66% on subject goods from Türkiye. Additionally, the USDOC determined subsidy rates ranging from 15.08% and 23.37%. In the USDOC’s most recent sunset review of 2021, it was found that the revocation of the anti-dumping and countervailing orders of the subject goods from Türkiye would likely lead to the continuation or resumption of dumping and subsidization.^{Footnote 112} In the USITC’s most recent sunset review of 2022, it was found that the revocation of the anti-dumping and countervailing duty orders would be likely to lead to continuation or recurrence of material injury.^{Footnote 113}

[153] Consequently, while the record does not indicate that there are a large number of anti-dumping measures concerning Turkish HSS in other countries, the fact that one of those measures concerns the United States is significant, given the size of that market and the proximity of the United States to Canada.

CBSA Anti-dumping Measures Concerning Türkiye

[154] The CBSA currently has four other anti-dumping and/or countervailing measures against Turkish steel products, three of which are tubular goods as follows:

• Rebar—2014^{Footnote 114}
• Oil country tubular goods (OCTG)—2015^{Footnote 115}
• CWSP—2019^{Footnote 116} and
• Corrosion-resistant steel sheet—2020^{Footnote 117}

[155] As such, notwithstanding the lack of participation in all proceedings related to the Canadian anti-dumping measures on HSS, exporters in Türkiye have continued to have an active – and recent – interest in the Canadian market, including those exporting pipe and tube products, as evidenced by the numerous anti-dumping measures against these products noted above.

Determination regarding likelihood of continued or resumed dumping

[156] Based on the available information concerning various factors:

• Substitutability of HSS
• Global Steel & HSS Market Conditions
• Tariffs and Safeguard Measures on Steel Imports and Diversion of HSS into Canada
• Attractiveness of Canadian Market
• Economic Outlook in the Names Countries
• Excess Capacity and Export-Orientation in the Named Countries
• The Inability of Exporters from the Named Countries to Compete at Non-dumped Prices and
• Imposition of Anti-dumping Measures by Authorities of Jurisdictions other than Canada concerning HSS from the Named Countries

the CBSA has determined that the expiry of the order in respect of hollow structural sections originating in or exported from South Korea and Türkiye is likely to result in the continuation or resumption of dumping of the goods.

Conclusion

[157] For the purpose of making a determination in this expiry review investigation, the CBSA conducted its analysis within the scope of the factors found under subsection 37.2(1) of the SIMR and considered any other factors relevant in the circumstances. Based on the foregoing analysis of pertinent factors and consideration of information on the record, on February 6, 2025, the CBSA made a determination pursuant to paragraph 76.03(7)(a) of SIMA that the expiry of the order made by the CITT on October 16, 2019, in Expiry Review No. RR-2018-006 in respect of HSS originating in or exported from South Korea and Türkiye is likely to result in the continuation or resumption of dumping of the goods from South Korea and Türkiye.

Future action

[158] The CITT has now initiated its expiry review to determine whether the continued or resumed dumping is likely to result in injury. The CITT’s expiry review schedule indicates that it will make its decision by July 16, 2025.

[159] If the CITT determines that the expiry of the order with respect to the goods is likely to result in injury, the order will be continued in respect of those goods, with or without amendment. If this is the case, the CBSA will continue to levy anti-dumping duties on dumped importations of the subject goods.

[160] If the CITT determines that the expiry of the order with respect to the goods is not likely to result in injury, the order will expire in respect of those goods. Anti-dumping duties would then no longer be levied on importations of the subject goods, and any anti-dumping duties paid in respect of goods that were released after the date that the order was scheduled to expire will be returned to the importer.

Contact us

[161] For further information, please contact the SIMA Registry listed below:

Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca