Statement of Reasons—Expiry review determination: Oil Country Tubular Goods 1 (OCTG1 2025 ER)

Parties contending that continued or resumed dumping is likely

Domestic producers: Tenaris, Interpro and Welded Tube (Collectively, the Canadian Producers)

[31] In their ERQ response and case briefs, the Canadian producers argued that continued or resumed dumping is likely should the order be allowed to expire. The Canadian producers each provided the CBSA with additional information prior to the close of the record in support of its position. Each party further expanded and elaborated on their position in their respective case briefs. The following section summarizes the arguments of the Canadian producers collectively.

[32] The factors identified by the Canadian producers in support of their position are summarized as follows:

• Continued dumping and subsidizing over the period of review
• Global overcapacity and China’s slowing economy
• Economic conditions in China
• Trade measures in other jurisdictions and
• International market conditions

Continued dumping and subsidizing over the period of review

[33] The Canadian producers referenced the CBSA’s compliance statistics showing that subject goods continued to be sold to Canada during the POR and that SIMA duties were collected from subject goods from both countries. The CBSA’s compliance statistics show that OCTG producers remain interested in the Canadian market and duties were collected every year of the OCTG. The Canadian producers argue that Chinese OCTG producers exported substantial volumes of OCTG in 2022 when normal values did not accurately reflect market conditions. When normal values reflected up-to-date market conditions, volumes declined from China.

[34] Chinese producers were able to quickly export larger volumes of OCTG in 2022 when demand for energy had surged following the COVID-19 pandemic and Russia-Ukraine armed conflict. Canada’s position as an energy supplier leads Canada to be ground for the dumping of OCTG goods. Chinese producers exported smaller volumes of OCTG following the proceedings which updated normal values near the end of 2022 and in 2023 but SIMA duties as a percentage of value for duty were higher.

[35] Canadian producers argue that without the finding in place, the volume of dumped and subsidized exports to Canada will almost certainly rise and the margin of dumping and subsidizing will also rise as producers compete for market share in Canada.

Global overcapacity and China’s slowing economy will limit market opportunities for subject countries and incentivize continued or resumed dumping

[36] Canadian producers argue that the combination of systemic global steel overcapacity and China’s deteriorating domestic economy creates a "crisis" level of excess supply that will inevitably be directed toward open markets like Canada.^{Footnote 15} Despite international calls for capacity reduction, Chinese state-owned enterprises have continued to expand production, leading to a collapse in global prices and the displacement of producers in market economies.^{Footnote 16} Domestic producers highlight that while China’s steelmaking capacity remains massive at approximately 1.14 billion tonnes, its domestic consumption is projected to continue declining through 2026 as its housing market bottoms out.^{Footnote 17}

[37] This imbalance is further exacerbated by a sharp contraction in China’s domestic demand for OCTG specifically.^{Footnote 18} Producers point to reports from the International Energy Agency (IEA) showing that China’s oil demand growth has slowed dramatically due to the rapid deployment of electric vehicles, the expansion of high-speed rail, and a prolonged downturn in the property sector.^{Footnote 19} Domestic producers point to recent findings of CBSA’s Seamless Casings Expiry Review which determined with domestic demand reaching a plateau or declining, Chinese OCTG producers—who are already highly export-oriented—are forced to seek foreign markets to maintain their high production levels and throughput.^{Footnote 20}

[38] Furthermore, Canadian producers contend that because OCTG is a price-sensitive commodity, Chinese exporters must use dumped pricing to secure market share in any available jurisdiction.^{Footnote 21} They argue that as other major markets like the United States and the European Union become increasingly restrictive through tariffs and safeguards, Canada remains a highly attractive "target" for the diversion of these excess, unfairly traded goods.^{Footnote 22} Without the continued protection of the current Order, producers maintain that the Canadian market would likely be flooded with dumped Chinese OCTG as producers seek to relieve their internal "capacity crisis."^{Footnote 23}

China's economic conditions

[39] China’s domestic steel market is currently in what industry analysts describe as a "deep crisis," driven primarily by a prolonged downturn in the property sector.^{Footnote 24} In June 2025, S&P Global reported a 12.31 percent year-over-year decline in Chinese domestic steel consumption. Analysts predict that domestic demand will continue to fall through 2026 as the housing market bottoms out.^{Footnote 25} These conditions exert extreme downward pressure on prices and force Chinese producers to seek export markets to maintain production levels. Canadian producers argue these dynamics create a "capacity crisis" that compels Chinese suppliers to offload surplus supply in open markets like Canada.^{Footnote 26}

China's OCTG demand

[40] China’s domestic demand for OCTG is slowing significantly due to a "visible" deceleration in oil demand growth. The International Energy Agency (IEA) attributes this to the rapid deployment of electric vehicles (EVs), the expansion of high-speed rail, and the ongoing property sector crisis.^{Footnote 27} Because Chinese OCTG producers are highly export-oriented and operate with capacity utilization rates often below 80%, they require high export volumes to maintain throughput. Canadian producers argue that with domestic demand reaching a plateau, exports remain the only viable option for Chinese mills to sustain operations.^{Footnote 28}

[41] In summary, the Canadian producers argue that the production imperative, global steel excess capacity concerns and China’s disruptive impact on the global OCTG export market all provide important context which creates an environment where producers in China would be incentivized to sell goods to Canada at dumped prices if the finding was rescinded.

China's steel industry and global trade measures

[42] Chinese exporters face an increasingly restrictive global trade environment, with over 50 anti-dumping measures currently in force against Chinese steel tubular products worldwide.^{Footnote 29} Major markets like the United States and the European Union have implemented rigorous safeguards and tariffs—such as the EU's 25 percent duty and reduced quotas—to prevent the influx of cheap Chinese steel.^{Footnote 30}

[43] The Canadian producers argue that these existing trade remedies in other jurisdictions are an important factor in determining whether or not dumping would continue or resume in the event that the order is rescinded. Numerous other trade remedies against Subject Goods across numerous jurisdictions increases the likelihood that Subject Good producers will resume exporting OCTG to Canada at dumped prices if the order expires, the Canadian producers argue.

[44] Other trade measures like safeguards and tariff-rate quotas have been imposed on Subject Countries, limiting the availability of alternative export markets. The European Union has a global steel safeguard covering OCTG until June 30, 2026, which includes China. Over quota volumes are subject to a 25% duty, although this is likely to increase to 50% duty in June of 2026.^{Footnote 31} The United Kingdom has similar measures in place.^{Footnote 32} Most significantly, U.S. Section 232 tariffs continue to restrict access to one of the largest steel markets in the world.

[45] Canadian producers argue that these global restrictions result in "diversion," where Chinese goods blocked from other markets are redirected toward Canada.^{Footnote 33} While Canada has implemented its own 25 percent surtax on Chinese steel, producers maintain that without the underlying SIMA Order, exporters could simply lower prices to absorb the surtax, rendering it ineffective at preventing dumping.

China's export orientation

[46] Chinese producers are inherently export-oriented, with major entities like Tianjin Pipe Corporation (TPCO) maintaining global marketing networks covering over 100 countries.^{Footnote 34} Record evidence from the POR indicates that China's reliance on exports has only intensified as domestic demand weakens.^{Footnote 35Footnote 36} Canadian producers argue that the recent "explosion" of Chinese imports in 2022—which surged 638% for seamless goods—proves that China will immediately exploit any opportunity to flood the Canadian market if price disciplines are relaxed.^{Footnote 37}

[47] The Canadian producers argue that a substantial portion of Chinese OCTG production is utilized by domestic OCTG users, leaving Chinese producers to seek sales in export markets for their products. The Tribunal previously found that the production in excess of domestic demand confirms a net-export orientation of the Chinese domestic producers.^{Footnote 38} The Canadian producers provided examples of Chinese producers, such as China Petroleum Technology and Development Corporation,^{Footnote 39} Dalipal^{Footnote 40} and Hengyang Valin Steel Tube Co., Ltd.^{Footnote 41} to emphasize their capacity and desire to serve export markets.

Chinese OCTG exports to Canada were at dumped prices

[48] The administrative record demonstrates that Chinese OCTG was consistently dumped during the POR. The CBSA collected over $5 million in SIMA duties between 2022 and mid-2025, with nearly $3 million collected in 2022 alone.^{Footnote 42} Canadian producers point to this as evidence that Chinese exporters are unable to compete in Canada at fair market prices and will resume dumping if the finding order is rescinded.

International market conditions

[49] International market conditions for OCTG have deteriorated following a brief post-pandemic recovery, characterized now by volatility and softening demand. Global oil prices are projected to decline over the next 12 to 24 months due to a supply glut from non-OPEC+ production and slowing demand growth in key markets like China.^{Footnote 43} As drilling activity correlates directly with oil prices, this downturn is expected to suppress global demand for OCTG, intensifying competition among exporters to secure sales in the few remaining stable markets.

[50] Simultaneously, the global steel industry is facing a deepening crisis of overcapacity. The OECD reports that global excess steel capacity is projected to reach 637 million tonnes in 2025, with China accounting for a disproportionate share.^{Footnote 44} This structural imbalance is exacerbated by China's slowing domestic economy, particularly the collapse of its property sector, which has traditionally absorbed vast quantities of steel. With domestic consumption waning, Chinese producers are under immense pressure to export to maintain capacity utilization rates.^{Footnote 45}

[51] The Canadian producers argue that international market conditions for OCTG continued to show expanding production capacity that exceeds global consumption, discussed in the previous section. This will encourage excess low-priced OCTG into global markets with Canada being a prime export market in the event that the finding is rescinded. Prices in North America remain substantially higher than Asian OCTG prices and OCTG consumers in Canada are likely to remain interested in Subject Goods if the finding is rescinded.

[52] In contrast to this bleak international outlook, the Canadian market remains relatively attractive. Canadian producers argue that this disparity, supported by evidence on the record, between a stable, high-value Canadian market and a depressed global market will inevitably attract diverted Chinese volumes if the anti-dumping measures are removed.

[53] Under Canada’s Tariff-Rate Quota system , Canadian producers argue exporters can use their quota volumes under the TRQ system if the measures expire, which would allow them to ship to Canada within their quota limits duty free, arguably at dumped prices.

Parties contending that continued or resumed dumping is unlikely

Importers

[54] No case briefs or reply submissions were submitted contending that the dumping of the subject goods from China is not likely to continue or resume if the order is rescinded.

Exporters and foreign producers

[55] No case briefs or reply submissions were submitted contending that the dumping of the subject goods from China is not likely to continue or resume if the order is rescinded.

Continued dumping and subsidizing over the period of review

[58] CBSA compliance statistics show that during the period of review, subject goods remained dumped and/or subsidized. In every year of the period of review SIMA duties were collected from OCTG products subject to this measure from China.

[59] Compliance data shows that Chinese imports of OCTG were priced below-market prices in the POR and were charged SIMA duties. These imports disrupted the domestic market and demonstrated dumping to gain market share. SIMA duties in the first half of 2025 are already on pace to exceed those of 2022 despite a significantly reduced volume of imports indicating a higher margin of dumping from OCTG imported from China.^{Footnote 46}

[60] The administrative record demonstrates a clear propensity for Chinese exporters to dump Subject Goods when enforcement mechanisms are not fully aligned with market realities. During the POR, specifically in 2022, Chinese imports surged by over 600% when normal values became detached due to rapid global price increases.^{Footnote 47} This "explosion" of imports ceased only after the CBSA concluded re-investigations in 2023 to update normal values, at which point Chinese import volumes collapsed. This pattern confirms that Chinese exporters are unable to compete in the Canadian market at non-dumped prices and will immediately revert to dumping if the Order is rescinded.

Global overcapacity and China’s slowing economy

[61] The global steel market is facing worsening conditions due to excess production capacity and sluggish demand. Post-COVID recovery was short-lived, and now the imbalance between growing production and weakening demand, notably in Asia, is expected to persist through 2027.^{Footnote 48} This oversupply is creating instability and incentivizing producers to seek new markets to maintain output and reduce costs. Despite international challenges, Canada is seen as a relatively stable and attractive market for OCTG exports over the next 12–18 months. The evidence on record establishes that China possesses massive, systemic overcapacity. China’s crude steel capacity remains at approximately 1.14 billion tonnes, with State-Owned Enterprises (SOEs) controlling 41% of this total.^{Footnote 49}

[62] Specific to the goods at issue, Chinese seamless OCTG capacity is projected to reach 30 million tonnes by 2025.^{Footnote 50} With domestic utilization rates hovering below 80% and internal demand plateauing due to the property sector crisis, Chinese producers face a "capacity crisis."^{Footnote 51} This structural imbalance creates a powerful imperative to export excess production to maintain throughput, characterizing the industry as heavily export-oriented.

Market conditions and commodity nature

[63] OCTG is a price-sensitive commodity, meaning that purchase decisions are driven primarily by price. Consequently, to capture market share in Canada, Chinese exporters must undercut domestic prices.

[64] Internationally, demand is softening. The International Energy Agency (IEA) reports that China’s oil demand growth has slowed dramatically due to the rapid deployment of electric vehicles and a downturn in the construction sector.^{Footnote 52} This contraction in China’s home market forces producers to look outward, making the relatively stable and higher-priced Canadian market a prime target for resumed dumping.

Trade measures and diversion

[65] The global trade landscape has become increasingly hostile to Chinese steel. The United States has escalated Section 232 tariffs to 50%, and the European Union has tightened its safeguard quotas.

[66] These measures effectively close off major alternative markets. Canadian producers argue that this creates a high risk of diversion, where Chinese steel originally destined for the U.S. or EU will be redirected to Canada. Without the protection of the Order, Canada would become a "dumping ground" for this displaced global supply.

Determinations

[67] Based on evidence on the record, the CBSA determined that the expiry of the order is likely to result in the continuation or resumption of dumping into Canada of certain oil country tubular goods from China.

Parties contending that continued or resumed subsidizing is likely

Domestic producers

[68] The Canadian producers provided case briefs supporting their position that subsidizing from China is likely to continue or resume in the event the order is allowed to expire.

[69] In assessing the likelihood of continued or resumed subsidizing, the CBSA considers the factors under SIMR subsection 37.2(1), particularly those relating to the nature of subsidy programs and the behaviour of the foreign government.

[70] The Canadian producers contend many factors relate to both dumping and subsidization that have already been presented in the dumping section of this report:

• Continued dumping and subsidizing over the period of review
• Global overcapacity and China’s slowing economy
• Economic conditions in Türkiye
• Trade measures in other jurisdictions and
• International market conditions

These positions will not be re-iterated here, please refer to the relevant section in the dumping portion for a summary of the Canadian producer’s position on these factors.

Parties contending that continued or resumed subsidizing is unlikely

[71] No case briefs or reply submissions were submitted contending that the subsidizing of certain oil country tubular goods from China is not likely to continue or resume if the order is rescinded. No submissions were received from the Government of China.