PLA7 2019 ER
Certain Hot-rolled Carbon Steel Plate
Statement of Reasons

[25] The goods subject to the finding under review are defined as:

[26] For greater certainty, the subject goods include steel plate which contains alloys greater than required by recognized industry standards provided that the steel does not meet recognized industry standards for an alloy-grade steel plate.

[27] Hot-rolled carbon steel plate is manufactured to meet certain Canadian Standards Association (CSA) and/or American Society for Testing & Materials (ASTM) specifications or equivalent specifications.

[28] CSA specification G40.21 covers steel for general construction purposes. In the ASTM specifications, for instance, specification A36M/A36 comprises structural plate; specification A572M/A572 comprises high-strength low-alloy steel plate; and specification A516M/A516 comprises pressure vessel quality plate. ASTM standards, such as A6/A6M and A20/A20M, recognize permissible variations for dimensions.

[54] Two parties expressed a position of likelihood of continued or resumed dumping. The Canadian producer, Algoma, provided a case brief supporting its position that dumping from the named countries is likely to continue or resume in the event the finding is allowed to expire. The arguments made by Algoma were supported by Evraz, SSAB, and Acier Nova , all of whom produce plate and/or cut-to-length plate in Canada. Algoma also provided a reply submission in response to the case brief submitted by USIMINAS.

[55] The main global factors identified by the parties can be summarized as follows:

• International Market Conditions
• Factor Specific to Named Countries
• Final Safeguard Measures on Heavy Plate
• Canadian Market Conditions

International Market Conditions

[56] Algoma submits that the international market conditions contextualize the macro-economic trends affecting steel plate globally. Algoma argues that these would make the Canadian domestic industry susceptible to resumed dumping if the finding was allowed to expire. These developments are further explained below.

Global Excess Capacity

[57] Algoma submits that the world continues to face a global excess steel production capacity. Algoma also contends that the excess capacity for steel products extends to steel plate as well. Specifically, Algoma argues that it is a crisis that pushes global steel producers to find new markets in which to sell their steel products, including plate, and to price aggressively to secure throughput on their mills.^{Footnote 25}

[58] Algoma states that global steel overcapacity will continue to be a significant issue affecting global steel trade for years to come.^{Footnote 26} Algoma argues that the CRU^{Footnote 27} data shows a concerning trend with respect to global production and consumption of steel plate. Specifically, Algoma claims that this trend of increasing oversupply of steel plate globally will be resulting in pressure on producers in the named countries to price aggressively where market opportunities become available. In 2016, 297 million MT of steel plate was produced compared to the 321 million MT forecasted for year 2019. The production is expected to fall to 315 million MT in 2020. The consumption level was 299 million MT in 2016, 318 million MT in 2018 and is expected to fall to 312 million MT in 2020. Algoma states that the consumption failed to keep pace with production, resulting in a widening gap, which is forecasted to grow in 2020.

[59] Algoma submits that these trends in global production and increasing steel plate production capacity demonstrate that the structural imbalance existing in the steel market will remain a major destabilizing factor in the steel plate market for at least the next 12 to 24 months.^{Footnote 28}

Global Economic Conditions

[60] Algoma states that most major end use industries such as construction, railroad and shipbuilding are facing weak growth and will continue to in the future. As per Algoma’s submission, construction growth is expected to show a modest growth of 0.2% from 2019 to 2021.^{Footnote 29} Further, Algoma, referring to the April 2019 International Monetary Fund (IMF) report and the Organisation for Economic Co-operation and Development (OECD) Interim Economic Outlook, released in March 2019, claims that the weakening global economic outlook will exacerbate the excess capacity crisis.^{Footnote 30} Algoma contends that this pressure will incentivize producers in the named countries to target Canada at low prices to maintain throughput on their mills.^{Footnote 31}

Crisis in the European Steel Market

[61] Algoma points to various sources as evidence indicating that the “European steel market is presently in crisis.”^{Footnote 32} A May 2019 press release by EUROFER, the European Steel Association, characterizes the market as one with “surging import volumes, stalling economic growth, high and volatile raw material costs and sharply growing carbon costs.”^{Footnote 33} The association reports that European steel safeguards have not worked and projects that steel demand in the EU will decline by 0.4% in 2019.^{Footnote 34}

[62] Further, Algoma points to an open letter to the EU government, in which 45 CEOs from the European steel industry ask that the steel safeguard measures be tightened in light of the fact that imports have more than doubled since 2013, but particularly accentuated in the wake of the U.S. imposing 25% steel import tariffs in 2018.^{Footnote 35}

Factors Specific to Named Countries

Brazil

[63] Algoma submits that Brazil is the world’s tenth largest steel exporter and that it is an export-oriented country with over 40% of production exported.^{Footnote 36} Algoma, referring to COMTRADE data, argues that exports of steel plate from Brazil increased from 67,952 MT in 2016 to 179,754 MT in 2018. For the first four months of 2019, steel plate exports amounted to 59,660 MT which would annualize to 179,000 MT for 2019.^{Footnote 37} Meanwhile, net steel plate exports are projected to increase by 83% from 2018 to 2021. Furthermore, Algoma, referring to the CITT administrative record of Expiry No. LE-2008-009, states that exports of steel to Canada in the first six months of 2018, compared to the same period in 2017, increased by 218% and are projected to further increase between 2018 and 2021.^{Footnote 38}

[64] Algoma claims that Brazil’s steel plate producers operate with very significant excess production capacity and intense price rivalry will continue to restrict sales profitability.^{Footnote 39} Further, Algoma states that production capacity in Brazil has been increasing over the POR and cites the new facility by Gerdau (a steel producer) as an example. Algoma mentions that Gerdau specifically stated that they have idle capacity in Brazil that could be rapidly put into operation.^{Footnote 40} Algoma argues that the increased production and production capacity of heavy plate in Brazil will be directed to both its domestic and export market.^{Footnote 41}

[65] Algoma points to the state of Brazil’s economy, stating that it is still recovering from its 2015-2016 recession, and that the country’s GDP grew by 1.1% in 2017 and 2018, while the projections of 2.1% in 2018 and 2.5% in 2020 are not expected to lift Brazil off its economic stagnation.^{Footnote 42} Algoma also points out that steel demand in the EU is declining, with production outpacing demand, while European producers band together to tighten safeguard measures.^{Footnote 43} Algoma argues that economic conditions in both Brazil and in the European market will push Brazilian steel producers to export their products to countries such as Canada, should the finding be allowed to expire.

Denmark

[66] Algoma notes that steel plate capacity in Denmark is projected to grow by 38% from 2018 to 2020. Referring to an article characterizing the Danish steel plate market as subdued, Algoma states that the Danish market will likely be unable to absorb the projected capacity increases.^{Footnote 44}

[67] Algoma points to the United Nations COMTRADE database which shows that Danish exports of steel plate have grown from 376,326 MT in 2015 to 531,084 in 2018, an increase of 41%. In the first quarter of 2019, steel plate exports were 152,986 MT, equating to an annualized volume of over 610,000 MT. Algoma notes that NLMK Dansteel A/S’s export growth in 2018 and 2019 coincided with the increase in Danish reversing mill capacity that occurred in 2018. It states that, given NLMK’s export orientation, one can infer that the company’s exports will increase again in 2020 when the company’s capacity will increase by another 115,000 MT.^{Footnote 45}

[68] Algoma points to the information on the record indicating that the EU is Denmark’s main export market for steel plate and contends that, due to the present crisis in the European steel market, Denmark is likely to export steel plate to other non-European countries, such as Canada, if the finding was allowed to expire.^{Footnote 46}

Indonesia

[69] Algoma submits that the Indonesian economy is expected to grow by 5.2% in 2019 and 5.1% in 2020 but the steel plate production in Indonesia is expected to expand even further.^{Footnote 47} COMTRADE data demonstrates that this increase in production has been dedicated largely to export markets. In 2015, Indonesia’s steel plate exports were listed at 353,000 MT. This figure grew in each year leading up to 2018, when exports were 575,000 MT, or 62% greater than in 2015.^{Footnote 48}

[70] Algoma further states that increase in exports follows a general increase in imports of steel products. From 2009 to 2018, steel imports to Indonesia increased by 105%, with exports increasing by 256%. The majority of Indonesia’s steel imports are flat and semi-finished products. Three countries that have been found to have dumped steel plate in Canada – Japan, Korea and China – were the largest sources of flat product imports to Indonesia in 2018. Competition with low-priced steel plate imports in its domestic market appears to have pushed Indonesian producers to export markets.^{Footnote 49}

Italy

[71] Italy is the world’s 10th largest steel producer and 7th largest steel exporter. In 2018, Italy exported 17.4 million MT of steel, with flat products accounting for the largest share at 35%, or 6.2 million MT, of that total. Italy is highly export-oriented, with 71% of its steel production dedicated to the export market. Further, Italy’s steel exports have grown by 42% since 2009.^{Footnote 50}

[72] In 2019, Italy’s economy is expected to contract by 0.2% according to the OECD, with a downgraded growth expectation of only 0.5% in 2020. At the end of 2018, Italy formally entered a recession with two consecutive quarters of contraction. This was the third recession Italy has experienced in a decade.^{Footnote 51}

[73] The prospects for Italian steel plate exporters are further dimmed by weak conditions in the European market. Italian exporters are heavily reliant on other European countries for their exports, with Germany, France, Spain, Austria and Poland being their top destinations for exports of flat products in 2018. According to CRU, Italy also exports a significant volume of reversing mill plate to India. These exports are likely to be restricted, as the Indian government has used trade barriers to limit imports.^{Footnote 52}

Japan

[74] Algoma refers to the Japan Iron and Steel Federation report and COMTRADE data, stating that Japan increased its exports of medium and heavy plate to 2.9 million MT in 2018 from 2.1 million MT in 2017, an increase of 39%.^{Footnote 53} Algoma states that Japan is operating with significant excess reversing mill capacity which is expected to remain stable below 70% until 2022.^{Footnote 54}

[75] Algoma, referring to the CBSA’s research on steel plate pricing in Japan’s market in June 2019 and to COMTRADE’s data for export prices, which extends to February 2019, claims that the domestic steel plate price amounted to US $822 per MT while export price amounted to US $674 per MT, suggesting that Japan recently sold steel plate for export below its domestic market price.^{Footnote 55}

[76] Algoma argues that Japan’s economy is in a fragile state. Referring to the OECD and IMF statement, Algoma indicates that Japan’s economy has a projected growth of 1% in 2019 and below 1% for 2020.^{Footnote 56} Further, steel exports in Japan have also been impacted by the weakening economy of China.^{Footnote 57}

[77] Algoma states that Japan’s steel industry is reliant on export and that flat products account for 69% of its exports. Algoma submits that U.S. Section 232 measures led to a decline of 21% in exports to the U.S. in 2018 compared to 2017. Algoma also claims that Japan is likely to face further trade barriers in the U.S. and possible restrictions regarding steel plate imports in India. The U.S. already has 14 anti-dumping measures in place against the Japanese steel market. Algoma argues that these factors will lead Japanese exporters to aggressively pursue exports to open markets, and should the finding be allowed to expire, will be more likely to ship steel plate to Canada and price at a dumped level.^{Footnote 58}

South Korea

[78] Algoma states that South Korea was the world’s fourth largest steel exporter in 2017. Since 2009, over 40% of the country’s steel production has been exported and its steel exports have increased by 49%. More specifically, between 2017 and 2018, the country’s steel exports to Canada increased by 66%.^{Footnote 59}

[79] Algoma refers to Hyundai Canada Inc.’s response to the ERQ and states that the company’s response demonstrates that it is well positioned to re-enter the Canadian market for subject plate if the finding is allowed to expire.^{Footnote 60} It further submits that, in 2018, Canada was South Korea’s fifth largest export market for long products and second largest export market for pipe and tube products.^{Footnote 61}

[80] Algoma presents CRU data which shows that steel plate production in South Korea has been increasing since 2016 and is projected to continue increasing into 2022.^{Footnote 62} Algoma points to an OECD report that revised its GDP forecast for South Korea down to 2.6% growth in 2019 and 2020.^{Footnote 63} A South Korea Iron and Steel Association report shows a decline in domestic shipbuilding and machinery production from 2017 to 2018 and indicates that the construction industry is experiencing “continuous negative growth rate due to slump in new construction orders.”^{Footnote 64} These conditions, asserts Algoma, will likely lead exporters in that country to rely more heavily on exports to markets such as Canada.^{Footnote 65}

Final Safeguard Measures on Heavy Plate

[81] Algoma states that “the 232 measures as well as resulting measures in other markets are having, or will continue to have, significant effects on the global steel trade.”^{Footnote 66} Algoma cites the CITT’s statistical summary in the April 2019 safeguard inquiry report which indicates that as of 2018, there were 20 safeguard measures in force on subject steel products, and another 23 had been initiated.^{Footnote 67} Algoma contends that the named countries have been impacted by the U.S. Section 232 measures and notes that “a significant portion of the steel goods that would have been imported into the U.S. is expected to be shut out of the U.S. and diverted into other markets.”^{Footnote 68} In addition, Algoma explains that five of the six named countries have seen substantial declines in their exports of steel plate to the U.S., as shown in the U.S. census data.^{Footnote 69}

Canadian Market Conditions

[82] Algoma states that the Canadian economy is forecast to experience slowing growth; TD Bank forecasts GDP growth of 1.3% in 2019 and 1.7% in 2020 while the IMF projects GDP growth of 1.5% for 2019 and 1.9% for 2020. Algoma refers to CRU data and states that steel plate consumption in Canada fell significantly in 2018 and is expected to remain below levels experienced in 2015-17 through 2019 and will only grow slightly in 2020. Algoma contends that given the reduced demand for steel plate and falling prices, exporters in the named countries would have an incentive to compete fiercely on price to regain a foothold in the Canadian steel plate market.

Evraz

[83] Evraz supports Algoma’s position and states that if the finding is allowed to expire, there would be a significant likelihood of resumed dumping of subject goods from Brazil, Japan, Denmark, Indonesia, Italy and South Korea.^{Footnote 70} Based on information on the record, Evraz states that the named countries have a strong focus on growing their export and that their production capacities have expanded during the POR.^{Footnote 71}

Other Canadian Producers

[84] Two Canadian service centres, Acier Nova^{Footnote 72} and SSAB^{Footnote 73} submitted letters endorsing the case brief filed by Algoma, supporting the notion that if the finding was allowed to expire, it would likely result in the continuation and/or resumption of dumping of subject goods from Brazil, Japan, Denmark, Indonesia, Italy and South Korea.

[85] One party expressed a position of unlikelihood of continued or resumed dumping. USIMINAS, a Brazilian steel producer and exporter, provided a response to the Exporter ERQ and made a representation in its case brief opposing the position that dumping from the named countries is likely to continue or resume in the event the finding was allowed to expire. USIMINAS argued that the measures should be removed. The exporter also provided a reply submission to the case brief of Algoma.

[86] The main factors identified by USIMINAS can be summarized as follows:

• Expiry Review Proceeding
• Standard of Evidence and Burden of Proof
• Brazil’s Exclusion from the Finding

Expiry Review Proceeding

[87] USIMINAS refers to Article 6.4 of the WTO Anti-dumping Agreement, and states that the authorities should provide timely opportunities for all interested parties to see and prepare presentations and claims that the CBSA’s rules, which permitted the parties to file numerous documents a few hours or minutes before the administrative record closed, deprived USIMINAS of the ability to file its own evidence in reply.^{Footnote 74}

Standard of Evidence and Burden of Proof

[88] USIMINAS submits that the determination must be based on an objective examination of positive evidence, and not on allegations, conjectures or speculation.^{Footnote 75} USIMINAS, indicates that the finding must be allowed to expire unless it can be demonstrated that there is a real likelihood of resumed dumping.^{Footnote 76}

[89] USIMINAS claims that the extensive documentation filed by the Canadian producers relates to steel in general instead of the subject goods, and that there is no evidence which establishes that global trends or conditions will result in USIMINAS returning to the Canadian market at dumped prices, nor at volumes and prices that would cause an injury to the Canadian production.^{Footnote 77} USIMINAS claims that Algoma has not provided positive evidence indicating that there is likelihood of resumed dumping, and thus, has failed to meet the burden of proof to support the continuation of measures against the subject goods.^{Footnote 78}

Brazil’s Exclusion from the Finding

[90] USIMINAS submits that there is no evidence of dumping of subject goods from Brazil into Canada during the POR and points that there have been no imports of subject goods from Brazil during the POR.^{Footnote 79} USIMINAS claims that the absence of SIMA duty collection from Brazil supports the expiry of the finding.^{Footnote 80} It further argues that its exports are higher priced and more profitable than domestic slabs.^{Footnote 81}

[91] USIMINAS claims that “the performance of the exporters, foreign producers, brokers and traders including, where applicable, in respect of production, capacity utilisation, cost, sales volumes, prices, inventories, market shares, exports and profit” is an outdated indicator,^{Footnote 82} and that there is no such information on the record.^{Footnote 83} Specifically, USIMINAS argues that it reduced its production to match demand and that there is no evidence on the record that any factor would encourage USIMINAS to re-open its plant in Cubatão to increase its capacity.^{Footnote 84}

[92] USIMINAS submits anti-dumping duties are in effect against Brazilian carbon and alloy steel cut-to-length plate in the U.S. and carbon steel plate in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) with margins of 74.52% and 31.10% respectively.^{Footnote 85} The exporter argues that these measures are not likely to divert dumped goods to Canada. Specifically, USIMINAS claims that the safeguard measures on heavy plate by Canada is preventing diversion.^{Footnote 86}

[115] As earlier indicated, the CBSA received an ERQ response, a case brief and a reply submission to this expiry review investigation from USIMINAS, a producer and exporter of subject goods in Brazil. The CBSA relied on the information submitted by USIMINAS and other participating parties, as well as other information on the administrative record for the purposes of the expiry review investigation with respect to Brazil.

[116] According to the Ministerial Report on the 2018 Global forum on steel excess capacity, Brazil’s steelmaking capacity was 51.5 million MT in both 2016 and 2017.^{Footnote 106} According to the U.S. Department of Commerce, the major Brazilian steel producers are Gerdau SA, which produced the most steel with 26 million MT worldwide; ArcelorMittal Brazil, which produced 11.3 million MT; USIMINAS, which was reported to have produced 9.6 million MT; and CSN with a production of 5.6 million MT.^{Footnote 107}

[117] Brazil’s steel industry is export-oriented as Brazil exports 40% of its steel production.^{Footnote 108} Brazil’s steel exports reached a peak in 2017 with 15.3 million MT.^{Footnote 109} In 2018, its exports decreased by 9% from 2017 to reach 13.9 million MT. However, the value of Brazil’s steel exports increased by 10% in 2018 to USD $ 8.8 billion, from USD $ 8.0 billion in 2017. Flat products represented 18% (2.5 million MT) of all exported steel products from Brazil.^{Footnote 110}

[118] While Brazil’s exports decreased during the POR, the information on the record indicates that additional production capacity has been put in place by Brazilian producer, Gerdau. Algoma submitted evidence that Gerdau started the production of heavy plate in Minas Gerais, Brazil at the end of 2016, with a capacity of 1.1 million MT per year destined for both domestic and export markets.^{Footnote 111}

[119] With respect to capacity utilization in Brazil, USIMINAS reported that “current level of plate capacity utilization in Brazil is barely above 30%”.^{Footnote 112}

[120] Algoma provided evidence of Brazil’s steel plate export price (USD/T) throughout the POR where the average price was US$ 792.36 in 2016, US$ 675.86 in 2018, and US$ 695.81 in the first quarter of 2019.^{Footnote 113} When converted into CAD, Brazilian export price for these years was $1,049.72, $875.71, and $926,66 for the first quarter of 2019 respectively.^{Footnote 114} Further examination of Canadian import data and Brazilian export data shows that during the POR, Brazil’s export prices have been significantly below Canada’s import prices. It is likely that Brazilian producers will be willing to price aggressively while pursuing new export markets. Table 5 below shows a summary of this pricing difference.

[121] CBSA’s analysis of confidential information on the record indicates that Brazilian export prices of subject goods have been significantly lower than prices in their domestic market during the POR.

[122] Based on the CBSA’s pricing analysis, it is evident that average Brazilian export prices are well below average Canadian import prices and that the exporters from Brazil sell at low and potentially dumped prices in other markets. As such, in the event that the current finding was allowed to expire, it is likely that subject goods originating or exported from Brazil would be at prices lower than the domestic Brazilian prices and well below Canadian import prices.

[123] The propensity of Brazilian exporters to dump steel products in Canada and other markets is further demonstrated by numerous anti-dumping measures imposed against them by Canada and other countries. There are currently 27 trade remedies in effect involving steel mill imports from Brazil.^{Footnote 117} Of these trade remedies, 24 involve anti-dumping duties in 8 countries (2 in Canada, 1 in the EU, 1 in India, 9 in Mexico, 1 in Taiwan, 1 in Thailand, 6 in the U.S. and 3 in Vietnam).

[124] Since the CITT’s finding, Brazilian exporters have not exported subject goods to Canada. Brazilian exporters continued to show an interest in the Canadian market throughout the POR by maintaining a presence in Canada’s flat product market by selling non subject steel plate.^{Footnote 118} This demonstrates that Brazilian exporters remain interested in the Canadian market for steel plate but have been unable to compete in the hot-rolled carbon steel plate market during the POR, while the finding is in place. This may indicate an inability to compete in the Canadian market at non-dumped prices.

Determination Regarding Likelihood of Continued or Resumed Dumping for Brazil

[125] Based on the evidence on the record in respect of: the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; steel market developments and trends; Brazil’s high export dependency on steel products; Brazil’s significant excess production capacity; the fact that Brazilian exporters sell subject goods to other markets at a lower prices than their domestic market; pricing data suggesting Brazilian exporters sell steel plate in other countries at prices below Canadian import prices; the multiple anti-dumping measures imposed by countries other than Canada against steel products from Brazil; and the inability of Brazilian producers to compete in Canada at non-dumped prices, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Brazil.

[126] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Denmark. The CBSA, therefore, relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from Denmark is likely to continue if the finding is allowed to expire.

[127] NLMK Dansteel A/S produces steel plate in widths of up to 4,000 mm and in thicknesses ranging from 5 – 200 mm.^{Footnote 119} It is the largest producer of steel plate in Denmark with a plant capacity of 520,000 tonnes. Confidential information on the record indicates that NLMK Dansteel’s steel plate capacity is projected to increase in 2019 and further in 2020.^{Footnote 120} The planned production capacity for this single Danish steel plate producer would put its total plate capacity in proximity to the apparent Canadian market for subject goods.

[128] NLMK Dansteel is wholly owned by NLMK Group of Russia, one of the world’s largest steel producers. NLMK Dansteel receives its slab feedstock from its parent’s production facilities in Lipetsk, Russia.^{Footnote 121} Confidential information on the record indicates that NLMK Group intends to increase its steel slab production in Russia.^{Footnote 122}

[129] Despite a large concentration of steel plate producers in Europe, the region is experiencing a flood of imports according to the European steel industry. Imports have more than doubled since 2013 and the industry itself is described as in crisis.^{Footnote 123} The import surge is attributed to the EU becoming a target for dumping for the world’s excess steel capacity and steel products being diverted to the EU as a result of the U.S. imposing steel tariffs in 2018. As neither of these issues will be resolved in the near future, EU will likely continue to experience high import volumes for steel plate products.

[130] The crisis in the European market is also being attributed to high prices for raw materials and energy as well as sharply increasing CO2 emission costs, the latter being borne by EU steel producers but not by steel imports into the EU.^{Footnote 124} Arcelor Mittal, the world’s largest steel maker, has been affected by the weak demand and high imports in the EU and, as a result, has announced cuts to production at several plants in Europe, including France, Germany, Spain and Poland.^{Footnote 125} EUROFER, the European Steel Association, adds its voice to the concerns over the state of the steel sector by projecting that steel demand in the EU will decline by 0.4% in 2019. Despite steel safeguard measures in place, EUROFER is concerned that they are not adequately protecting against surging import volumes and that the employment gains the steel industry made in 2017 and 2018 will be reversed as European steel producers idle facilities and cut back production.^{Footnote 126} In light of the challenges mentioned above, it is likely that producers of steel plate in Denmark will be forced to pursue other markets for their products, including Canada.

[131] Based on United Nations COMTRADE data, exports of steel plate from Denmark have grown from 376,326 MT in 2015 to 531,084 MT in 2018, an increase of 41%. In the first quarter of 2019 Danish exports of steel plate were 152,986 MT, which equates to an annualized volume of over 610,000 MT.^{Footnote 127} With respect to NLMK Dansteel, the company’s website states that its main markets are countries in Northern Europe.^{Footnote 128}

[132] Algoma provided evidence of Danish steel plate export prices (USD/T) throughout the POR where the average price was US$ 519 in 2016, US$ 648 in 2017, US$ 784 in 2018, and US$ 759.27 in the first quarter of 2019.^{Footnote 129} When converted into CAD, Danish export price for these years was $687.57, $841.49, $1015.83 and $1011.17 for the first quarter of 2019 respectively.^{Footnote 130} Further examination of Canadian import data and Danish export data shows that throughout the POR, Denmark’s export prices were consistently below Canada’s import prices. Table 6 below shows a summary of this pricing difference.

[133] Based on the pricing analysis above, it is evident that average Danish export prices are well below average Canadian import prices. As such, in the event that the current finding was allowed to expire, it is likely that subject goods originating or exported from Denmark would be at prices below Canadian import price.

[134] As shown in Table 1 and 2, a small quantity of hot-rolled carbon steel plate that originated in Denmark was dumped into Canada during the POR. Although the amount may not be considered to be significant, the goods were nonetheless dumped. This indicates that subject goods from Denmark have been dumped into Canada during the POR and that there remains interest for these goods in the Canadian market.

Determination Regarding Likelihood of Continued or Resumed Dumping for Denmark

[135] Based on information on the record regarding the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; steel market developments and trends; the planned production capacity increases for steel plate products in Denmark at a time when the European steel market is experiencing decreasing demand, increasing imports and production cutbacks; the fact that a large proportion of steel plate produced in Denmark is exported out of the country and that the volume of these exports is increasing; the current challenges that the steel plate exporters from Denmark continue to face due to increased competition in the European market and restrictive steel tariffs imposed by the U.S.; pricing data suggesting that the Danish exporters sell steel plate to other countries at prices below Canadian import prices; the fact that the exporters from Denmark have shown interest in the Canadian market during the POR; and the fact that exporters from Denmark have continued dumping in the Canadian market during the POR, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Denmark.

[136] The CBSA received an ERQ response from the exporter PT Krakatau Posco (PTKP). No case briefs or reply submissions from exporters in Indonesia were received. The CBSA relied on the information submitted by the exporter, the Canadian producers as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to Indonesia.

[137] Algoma provided evidence of Indonesia’s steel plate export price (USD/MT) throughout the POR where the average price was US$ 392 in 2016, US$ 528 in 2017 and US$ 642 in 2018.^{Footnote 133} When converted into CAD, Indonesian export price for these years was $519.32, $685.66 and $831.84 respectively.^{Footnote 134} Further examination of Canadian import data and Indonesian export data shows that during the POR, Indonesia’s export prices have been significantly below Canada’s import prices. Table 7 below shows a summary of this pricing difference.

[138] CBSA’s analysis of confidential information on the record indicates that Indonesian export prices of subject goods have been significantly lower than prices in their domestic market during the POR.

[139] Based on the CBSA’s pricing analysis, it is evident that average Indonesian export prices are well below average Canadian import prices and that Indonesian exporters are selling at low and potentially dumped prices in other markets. As such, in the event that the current finding was allowed to expire, it is likely that subject goods originating or exported from Indonesia would be at prices lower than domestic Indonesian prices and well below Canadian import prices.

[140] During the first three years of the POR (2016, 2017 and 2018), Indonesia’s production of hot-rolled carbon steel plate experienced an increase, along with increased exports of flat steel products. According to the World Steel Association’s Steel Statistical Yearbook issued in 2018, Indonesian production of hot-rolled plate (≥3mm) increased by 29% (1.3 million MT to 1.8 million MT) between 2015 and 2017 which coincided with a 30% increase (2.9 million MT to 4.2 million MT) in exports of flat products during the same period.^{Footnote 137}

[141] In the ministerial report on the global forum for steel excess capacity, issued on September 20, 2018, Indonesia reported specific targets for increasing crude steel capacity; a target of 25 million MT was announced in 2015 to be reached by 2035.^{Footnote 138} Indonesia has also indicated that its National Master Plan of Industrial Development 2015-2035 foresees an increase in crude steel capacity.^{Footnote 139} Additionally, Deputy Governor of Central Java Heru Sudjatmoko said that China-based steel producer Hebei Bishi Steel Group has invested US$ 2.54 billion to build a steel plant in Kendal regency, Central Java.^{Footnote 140} This plant is being publicized as the biggest steel plant in Asia.^{Footnote 141} It should be noted that between 2014 and 2017, the steel production capacity in Indonesia has already increased by 1.2 million MT.^{Footnote 142}

[142] COMTRADE data demonstrates that this increase in production has been dedicated largely to export markets. In 2015, Indonesia’s steel plate exports to Canada are listed at 353,198 MT. This figure grew in each year leading up to 2018, when exports were 574,711 MT, or 220,000 MT greater than in 2015. This amounts to a rate of increase of 62%.

[143] During the POR, there were no shipments of steel plate from Indonesia to Canada. The absence of shipments suggests an inability on behalf of the Indonesian steel plate producers to compete in Canada at non-dumped prices.

Determination Regarding Likelihood of Continued or Resumed Dumping for Indonesia

[144] Based on information on the record in respect of the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; steel market developments and trends; pricing data suggesting that Indonesian exporters sell subject goods to other markets at prices lower than their domestic market; pricing data suggesting the Indonesian exporters sell steel plate in other countries at prices below Canadian import prices; the planned production capacity increases for steel plate products in Indonesia despite the prevalent excess capacity in the steel market; the increasing volume of exports; and the current challenges that steel plate exports from Indonesia continue to face due to increased competition in the world market and restrictive steel tariffs imposed by the U.S.; and the inability of Indonesian producers to compete in Canada at non-dumped prices, it is recommended that the CBSA determine that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Indonesia.

[145] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Italy. The CBSA, therefore, relied on information submitted by participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to Italy.

[146] According to the European steel industry, imports have more than doubled since 2013 and the European steel industry itself is described as in crisis.^{Footnote 143} The import surge is attributed to the steel tariffs imposed by the U.S., which has led to the dumping of excess capacity in Europe. Furthermore, the production in the EU is also impacted by high prices for raw materials and energy and increasing costs of CO2 emission, the latter being borne by EU steel producers but not by steel imports into the EU.^{Footnote 144} As such, the EU will undoubtedly continue to experience high import volumes for steel plate products in the near future.

[147] With respect to Italy, as per the OECD, Italy’s economy is expected to contract by 0.2% in 2019.^{Footnote 145} Steel “demand in Italy is expected to fall on weaker fundamentals”^{Footnote 146} including a downward trend in construction industry. Weak demand and high imports have already led Arcelor Mittal to cut production in its European plants, including Arcelor Mittal Italia.

[148] Despite the economic recession in Italy, in 2017, Italy added steel production capacity of 250,000 MT. “Italy produced 24.5 million MT (of crude steel) in 2018, up by 1.7% on 2017.”^{Footnote 147} Regarding steel exports, “the steel exports as a share of Italy’s production have been decreasing since 2016, from 74.4% to 71%, but are significantly higher than from 2009 to 2013.”^{Footnote 148} Flat products accounted for the largest share of the Italian steel exports in 2018 at 35% or 6.2 million MT.^{Footnote 149} Exports further increased in 2018 and between 2017 and 2018, Italian exports to the U.S. saw the largest increase in volume (41%).^{Footnote 150} The weak economic conditions in Italy and the heavy influx of imports into the EU have resulted in Italian steel being directed to other markets.

[149] Algoma provided evidence of Italy’s steel plate export price (USD/T) throughout the POR where the average price was US$ 513.49 in 2016, US$ 650.58 in 2017, US$ 740.76 in 2018, and US$ 704.47 in the first quarter of 2019.^{Footnote 151} When converted into CAD, Italian export price for these years was $680.27, $844.84, $959.80 and $938.19 for the first quarter of 2019 respectively.^{Footnote 152} Further examination of Canadian import data and Italian export data shows that during the POR, Italy’s export prices have been consistently below Canada’s import prices. It is likely that Italian producers will be willing to price aggressively while pursing new export markets. Table 8 below shows a summary of this pricing difference.

[150] Based on the pricing analysis above, it is evident that average Italian export prices are well below average Canadian import prices. As such, in the event that the current finding is allowed to expire, it is likely that subject goods originating or exported from Italy would be at prices below Canadian import prices.

[151] During the POR for this expiry review, there were no shipments of steel plate from Italy to Canada. The absence of shipments suggests an inability on behalf of the Italian steel plate producers to compete in Canada at non-dumped prices.

[152] Evidence on the record reveals that multiple anti-dumping measures were imposed by other countries in respect of steel plate and other steel products from Italy. U.S. has four steel anti-dumping duties and two countervailing duties in effect against the steel industry in Italy.^{Footnote 155} Similarly, Mexico has anti-dumping duties in place against steel plate from Italy.^{Footnote 156} These anti-dumping measures demonstrate a propensity to dump by steel producers in Italy.

Determination Regarding Likelihood of Continued or Resumed Dumping for Italy

[153] Based on information on the record regarding the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; the steel market developments and trends; the increase in steel production capacity of Italian producers despite the decreasing demand, increasing imports and production cutbacks in Italy and the EU; the challenges in the European steel market and restrictive steel tariffs imposed by the U.S.; the pricing data suggesting Italian exporters sell steel plate to other countries at prices below Canadian import prices; the inability of Italian producers to compete in Canada at non-dumped prices; and the multiple anti-dumping measures imposed by countries other than Canada against steel products from Italy, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Italy.

[154] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in Japan. The CBSA, therefore, relied on information submitted by participating parties, as well as other information on the administrative record, for the purposes of the expiry review investigation with respect to Japan.

[155] The Japanese steel industry is export-oriented. Japan is the world’s second largest steel exporter and according to the OECD and the U.S. Department of Commerce^{Footnote 157}, Japanese steel exports represented 8% of global steel exports in 2017 with 37.4 million MT.^{Footnote 158} In 2018, the volume of Japanese steel exports decreased by 4% from 2017 to reach 35.8 million MT. Additionally, exports of flat products amounted to 24.5 million MT or 69% of Japan’s steel exports in 2018.^{Footnote 159} Meanwhile, the value of Japan’s steel exports increased by 6% and amounted to US$ 30.0 billion in 2018. During the same period, Japan imported 5.9 million MT of steel products resulting in net exports of 29.9 million MT in 2018.^{Footnote 160}

[156] Table 9 below shows a summary of Japan’s crude steel imports, exports as well as its production destined to export markets.

[157] According to the above figures, Japan experienced a sharp decrease in its steel exports (4.6 million MT) during the 2016-2018 period. In 2017, the volume of steel exports decreased in eight of Japan’s top 10 steel export markets.^{Footnote 162} Exports to the U.S. decreased by 21% in 2017^{Footnote 163} and were heavily impacted by Section 232 measures in 2018.^{Footnote 164} During the POR, Japanese steel exports decreased by 11.4%, while the apparent consumption grew by only 5.7%.^{Footnote 165} The growth of Japan’s apparent consumption was not enough to offset its decline in exports. Meanwhile, Japan’s production remained virtually unchanged (-0.5 million MT) at 104.3 million MT in 2018.^{Footnote 166} Thus, Japan is likely to have accumulated excess steel during the POR and, as such, Japanese producers are likely to pursue new export markets and may price aggressively to secure market shares.

[158] Meanwhile, evidence on the record shows that global exports from Japan contracted for four straight months at the end of the POR.^{Footnote 167} As reported by the OECD, the Japanese economy is expected to grow by only 0.8% for 2019 and 0.7% for 2020.^{Footnote 168}

[159] During the POR, Japan’s steelmaking capacity slightly declined while actual production remained flat, resulting in a slight reduction in Japan’s total excess capacity.^{Footnote 169} However, Japanese producers continuously operated with at least over 27.7 million MT of total steelmaking excess capacity. While this information is regarding crude steel, it should be noted that 69% of Japanese steel exports are flat products which includes subject goods.^{Footnote 170} The excess capacity could be rapidly put into operation by Japanese producers. Given the size of the industry and the information on the record regarding excess production capacity, Japanese producers could easily supply the entire apparent Canadian market of certain hot-rolled carbon steel plate for the entire POR and would still have significant amount of excess capacity.

[160] Algoma provided evidence of Japan’s steel plate export price (USD/T) throughout the POR where the average price was US$ 447.33 in 2016, US$ 528.92 in 2017, US$ 627.44 in 2018, and US$ 673.57 in the first quarter of 2019.^{Footnote 171} When converted into CAD, Japanese export price for these years was $592.62, $686.86, $812.97 and $897.04 for the first quarter of 2019 respectively.^{Footnote 172} Further examination of Canadian import data and Japanese export data shows that throughout the POR, Japan’s export prices were significantly below Canada’s import prices. Table 10 below shows a summary of this pricing difference.

[161] Based on the pricing analysis above, it is evident that average Japanese export prices are well below average Canadian import prices. As such, in the event that the current finding is allowed to expire, it is likely that subject goods originating or exported from Japan would be at prices significantly below Canadian import price.

[162] The propensity of Japanese exporters to dump steel products in Canada and other markets is further demonstrated by the numerous anti-dumping measures imposed against them by Canada and other countries. There are currently 31 trade remedies in effect involving steel mill imports from Japan.^{Footnote 175} Of these trade remedies, 30 involve anti-dumping duties in 10 countries (three in Canada, three in Australia, two in China, 1 in the EU, two in India, one in Indonesia, one in Mexico, one in South Korea, two in Thailand and 14 in the U.S.).

[163] Since the CITT’s finding, Japanese exporters have not exported subject goods to Canada. Japanese exporters of steel plate continued to show an interest in selling into the Canadian market throughout the POR by maintaining a presence in Canada’s flat product market by selling non-subject goods.^{Footnote 176} This demonstrates that Japanese exporters remain interested in the Canadian market for subject goods but have been unable to compete in the hot-rolled carbon steel plate market during the POR, while the finding was in place. This indicates an inability to compete in the Canadian market at non dumped prices.

Determination Regarding Likelihood of Continued or Resumed Dumping for Japan

[164] Based on the evidence on the record in respect of the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; steel market developments and trends; Japan’s significant excess production capacity; Japan’s high export dependency on steel products; pricing data suggesting Japanese exporters sell steel plate to other countries at prices below Canadian import prices; the multiple anti-dumping measures imposed by countries other than Canada against steel products from Japan; and the inability of Japanese producers to compete in Canada at non-dumped prices, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Japan.

[165] The CBSA did not receive any ERQ responses, case briefs, or reply submissions from exporters in South Korea. The CBSA, therefore, relied on information submitted by participating parties, as well as other information on the administrative record, in considering whether the dumping of subject goods from South Korea is likely to continue if the finding is allowed to expire.

[166] Information on the records shows that South Korea’s steel exports increased by 49% from 2009 to 2018 which is the same percentage that the country’s crude steel production grew over the same period. In 2017, South Korea was ranked as the world’s fourth largest exporter of steel and its exports represented about 7% of all steel exported globally in that year. Over the past ten years, steel manufacturers in South Korea have consistently exported over 40% of their production, indicating a strong reliance on foreign markets to maintain production levels. In terms of South Korea’s steel exports to Canada, these increased by 66% between 2017 and 2018.^{Footnote 177}

[167] According to a U.S. Department of Commerce report, South Korea’s crude steel production grew from 48.6 million MT in 2009 to 72.5 million MT in 2018, an increase of over 49%.^{Footnote 178} South Korea’s top three steelmakers – POSCO, Hyundai Steel Company, and Dongkuk Steel Mill Co., Ltd. have a combined production capacity of 12.5 million MT.^{Footnote 179} By way of comparison, the apparent Canadian market for like goods is determined to be approximately 800,000 MT. While the production capacity figures noted above relate to all steel plate products, it is nonetheless worth noting that the excess capacity available to steel plate producers in South Korea is many times larger than the apparent Canadian market for like goods.

[168] Algoma provided evidence of South Korea’s steel plate export price (USD/MT) during the POR where the average price was US$ 477 in 2016, US$ 564 in 2017, US$ 664.04 in 2018.^{Footnote 180} When converted into CAD, South Korean export price for these years was $631.93, $732.41, $860.34 respectively.^{Footnote 181} Further examination of Canadian import data and South Korean export data shows that throughout the POR, South Korea’s export prices were significantly below Canada’s import prices. Table 11 shows a summary of this pricing difference.

[169] Based on the pricing analysis above, it is evident that average South Korean export prices are well below average Canadian import prices. As such, in the event that the current finding was allowed to expire, it is likely that subject goods originating or exported from South Korea would be at prices below Canadian import price.

[170] The propensity of South Korean exporters to dump steel products in Canada and other markets is further demonstrated by the numerous anti-dumping measures imposed against them by Canada and other countries. According to the WTO, steel products from South Korea are currently subject to 59 trade remedies around the world, 46 of which are anti-dumping duties.^{Footnote 184} In Canada, nine steel-related products from South Korea are currently subject to anti-dumping duty, including flat-rolled products, tubular products, rebar and fabricated industrial steel components.

[171] As indicated earlier in this document, a certain amount of subject hot-rolled carbon steel plate originating in South Korea was assessed anti-dumping duty after being imported into Canada during the POR. Although small in quantity, this indicates that subject goods from South Korea have continued to be dumped into Canada during the POR and that there remains interest in the Canadian market for these goods.

[172] The economy in South Korea is currently facing a number of serious challenges including a declining GDP and falling currency values. According to the Bank of Korea, GDP fell 0.3% in the first quarter of 2019, the biggest reduction since 2008. At the same time capital expenditures plunged 10.8%, the worst drop since the Asian financial crisis of 1998.^{Footnote 185} South Korea’s construction industry, which is traditionally a major consumer of steel plate products and which comprises almost a fifth of the country’s economic output, is also under duress. Investment in this industry fell 8.6% in the third quarter of 2018, the deepest fall since the 1990s.^{Footnote 186} Both the country’s shipbuilding industry, which accounts for 7% of exports and employment, and its machinery industry have seen declines from 2017 to 2018.^{Footnote 187Footnote 188}

[173] In South Korea, exports make up more than 40% of the country’s GDP, so changes in the global economy have a significant impact on its economy. For example, China is South Korea’s largest trade partner, accounting for 27% of its exports. However, these exports are under pressure due to China’s economy itself being adversely affected by an escalating trade war with the U.S.^{Footnote 189} Due to the export reliance of steel manufacturers in South Korea, including manufacturers of steel plate products, it is likely that these companies will look increasingly to other foreign markets, including Canada, as both their domestic market and China’s domestic market continue to face economic challenges.

Determination Regarding Likelihood of Continued or Resumed Dumping for South Korea

[174] Based on information on the record regarding the commodity nature of hot-rolled carbon steel plate; the capital intensive nature of steel production; steel market developments and trends; the large production capacity and excess capacity associated with steel plate producers in South Korea relative to Canadian producers; the export-oriented nature of steel producers in that country; pricing data suggesting South Korean exporters sell steel plate to other countries at prices below Canadian import price; the multiple anti-dumping measures imposed by countries other than Canada against steel products from South Korea; the fact that exporters from South Korea have continued dumping and shown interest in the Canadian market during the POR; and the current challenges that steel plate producers from South Korea continue to face due to worsening economic conditions in their domestic market, the CBSA determined that the expiry of the finding is likely to result in the continuation or resumption of dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from South Korea.