Statement of reasons—Preliminary determination: Corrosion-Resistant Steel Sheet 3 (COR3 2024 IN)

Decision

Ottawa, May 2, 2025

Pursuant to subsection 38(1) of the Special Import Measures Act, the Canada Border Services Agency made preliminary determination on April 17, 2025, respecting the alleged injurious dumping of corrosion-resistant steel sheet originating in or exported from the Republic of Türkiye by Borçelik Çelik Sanayi Ticaret A.Ş.

Summary of events

[1] On December 5, 2024, pursuant to subsection 31(1) of Special Import Measures Act (SIMA), the CBSA, on its own initiative, initiated an investigation respecting the dumping of corrosion-resistant steel sheet (COR) from the Republic of Türkiye (Türkiye) by Borçelik Çelik Sanayi Ticaret A.Ş (Borçelik).

[2] Upon receiving notice of the initiation of the investigation, the Canadian International Trade Tribunal (CITT) commenced a preliminary injury inquiry, pursuant to subsection 34(2) of SIMA, into whether the evidence discloses a reasonable indication that the dumping of the above-mentioned goods have caused injury or are threatening to cause injury to the Canadian industry producing the like goods.

[3] On February 3, 2025, pursuant to subsection 37.1(1) of SIMA, the CITT made a preliminary determination that there is evidence that discloses a reasonable indication that the dumping of COR originating in or exported from the Türkiye by Borçelik has caused injury to the domestic industry.

[4] On February 26, 2025, the CBSA notified interested parties that the preliminary stage of the investigation will be extended pursuant to subsection 39(1) of SIMA.

[5] On April 17, 2025, as a result of the CBSA’s preliminary investigation and pursuant to subsection 38(1) of SIMA, the CBSA made preliminary determination of dumping of COR originating in or exported from Türkiye by Borçelik.

[6] On the same date, pursuant to subsection 8(1) of SIMA, provisional duties were imposed on imports of dumped goods that are of the same description as any goods to which the preliminary determination apply, and that are released during the period commencing on the day the preliminary determination was made and ending on the earlier of the day on which the CBSA causes the investigation in respect of any goods to be terminated pursuant to subsection 41(1) of SIMA or the day the CITT makes an order or finding pursuant to subsection 43(1) of SIMA.

Period of investigation

[7] The period of investigation (POI) is October 1, 2023 to September 30, 2024.

Profitability analysis period

[8] The profitability analysis period (PAP) is October 1, 2023 to September 30, 2024.

Interested parties

Product information

Like goods and class of goods

[29] Subsection 2(1) of SIMA defines “like goods” in relation to any other goods as

[30] In its preliminary injury inquiry for this investigation, the CITT further reviewed the matter of like goods and classes of goods. On February 18, 2025, the CITT issued its preliminary inquiry Statement of Reasons^{Footnote 5} for the investigation, indicating that it considered that domestically produced COR are like goods to the subject goods and that there is one class of goods.

Imports into Canada

[31] During the preliminary phase of the investigation, the CBSA refined the estimated volume and value of imports based on information from CBSA import entry documentation and other information received from the exporter and importers.

[32] The following table presents the CBSA’s analysis of imports of COR for the purposes of the preliminary determination:

Investigation process

[33] Regarding the investigation, information was requested from Borçelik, its potential producer(s), and all known and potential importers, concerning shipments of COR released into Canada during the POI. Information was also requested from all associated suppliers of inputs that are a significant factor in the production of COR, if any.

[34] As information available to the CBSA at initiation demonstrated that a PMS may exist with respect to Türkiye due to evidence of distorted input costs, the CBSA also requested information from the GOT^{Footnote 6} as well as from Canadian producers.^{Footnote 7}

[35] Borçelik’s producer(s) and related companies were also notified that failure to submit all required information and documentation, including non-confidential versions, failure to comply with all instructions contained in the RFI, failure to permit verification of any information, or failure to provide documentation requested during the verification visits or the desk audits may result in the margin of dumping and the assessment of anti-dumping duties on subject goods being based on facts available to the CBSA. Further, they were notified that determinations on the basis of facts available could be less favorable to them than if complete, verifiable information was made available.

[36] Several parties (i.e., importers and the exporter) requested an extension to respond to their respective RFIs. The CBSA reviewed each request on a case-by-case basis. Where reasons for making the request constituted unforeseen circumstances or unusual burdens, an extension was granted.

[37] After reviewing Borçelik’s RFI response,^{Footnote 8} three supplemental RFIs (SRFIs) were sent to seek additional information and clarification. Borçelik provided responses to these SRFIs.^{Footnote 9} The GOT and the Canadian producers were also sent SRFIs and provided their responses.^{Footnote 10}

[38] The preliminary determination is based on the information available to the CBSA at that time. During the final phase of the investigation, the CBSA will continue to collect and verify information, the results of which will be incorporated into the CBSA’s final decision, which must be made by July 16, 2025.

Representations

[39] During the preliminary phase of the investigation, counsels for the Canadian producers made representations concerning various exhibits on the administrative records, including the RFI responses, and also submitted information and representations with respect to PMS.^{Footnote 11} These representations concern topics including the accuracy and completeness of information provided, and other missing or unclear information provided in the RFI responses, and with respect to a particular market situation (PMS) in Türkiye, particularly as it pertains to input material.

[40] The CBSA has noted the arguments submitted in these representations and will take them into consideration in the course of analyzing and verifying information for the purposes of the final decisions.

Dumping investigation

[41] The following presents the preliminary results of the investigation into the dumping of COR originating in or exported from Türkiye by Borçelik.

Normal value

[42] Normal values are generally estimated based on the domestic selling prices of like goods in the country of export, in accordance with the methodology of section 15 of SIMA, or on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits, in accordance with the methodology of paragraph 19(b) of SIMA.

Export price

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

Margin of dumping

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

Preliminary results of the dumping investigation

Borçelik

[45] Borçelik is the producer and exporter and is responsible for shipping the subject goods to Canada. Borçelik produces hot-dip galvanized steel, cold-rolled steel, and pickled & oiled hot-rolled steel. The administration, production, sale and distribution activities of the company are undertaken at Borçelik’s facility in Gemlik, Bursa.

[46] For the purposes of the preliminary determination the CBSA has determined that due to a number of concerns, Borçelik’s costing and domestic pricing data was incomplete or otherwise unreliable. As a result, Borçelik’s margin of dumping is based on facts available.

[47] In establishing the methodology for estimating the normal values for Borçelik, the CBSA considered all of the information on the administrative record, including the CBSA’s estimates at the initiation of the investigation.

[48] The CBSA decided that the methodology it used to estimate normal values at the time of initiation consisted of the best information available. For purposes of initiation, the CBSA estimated normal values using the normal values for future use issued to cooperative Turkish COR exporters during the most recent COR2 re-investigation. The CBSA considers this to be the best information available as these are actual normal values that were issued pursuant to section 15 or paragraph 19(b) of SIMA and they are currently in place for those cooperative exporters. Additionally, these normal values were in place during the POI. Lastly, COR2 shares the same product definition and the normal values covered a wide variety of subject COR.

[49] Based on a lack of any other publically available information, the CBSA finds these estimates to be reasonable for the purposes of estimating normal values for the preliminary determination.

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

[51] The total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 22.9%, expressed as a percentage of the export price.

Particular market situation

[52] The CBSA is investigating if a PMS exists in Türkiye for Borçelik. A PMS may be found to exist where factors such as government regulations, significant macroeconomic volatility, or distorted input costs have a significant impact on the domestic sales of like goods in the country of export.

[53] In accordance with paragraph 16(2)(c) of SIMA, and for the purposes of determining normal values under section 15, the CBSA will not consider any sales of like goods for use in the country of export that, in the opinion of the CBSA, do not permit a proper comparison with the sales of subject goods to the importers in Canada due to the existence of a PMS. The normal value of those goods will be determined under section 19 of SIMA, where possible, or section 29 of SIMA.

[54] Subsection 16(2.1) of SIMA provides that, for the purposes of paragraph 16(2)(c), a PMS may be found to exist in respect of any goods of a particular exporter or of a particular country, as appropriate in the circumstances.

[55] Where the CBSA forms the opinions that a PMS does not allow for a proper comparison of domestic sales of like goods with sales of subject goods to Canada pursuant to section 15 of SIMA and that a PMS also impacts the cost of an input, for the purposes of constructing normal values pursuant to paragraph 19(b) of SIMA, the CBSA will not take into consideration the acquisition price of an input that does not allow a proper comparison as it does not reasonably reflect the actual costs of that input due to a PMS. The input costs will be determined in accordance with subsection 11.2(2) of the Special Import Measures Regulations (SIMR), to be the amount that reasonably reflects the actual cost of the input in the country of export to permit a proper comparison.

[56] The information available to the CBSA at the initiation of the investigation demonstrated that a PMS may exist in Türkiye for Borçelik due to distorted input costs. Specifically, due to the GOT’s finding that hot-rolled coil (HRC) imports from China, Russia, Japan and India were dumped and caused material injury to Turkish domestic industry, therefore normal conditions in the domestic market of Türkiye appeared to not prevail.

[57] At the initiation of the investigation, the CBSA sent PMS RFIs to the GOT and Canadian domestic producers.^{Footnote 12} The Dumping RFI sent to Borçelik also included questions relating to the potential PMS.^{Footnote 13} During the preliminary phase of the investigation, the CBSA further sent SRFIs to the GOT, Canadian domestic producers and Borçelik to collect additional information relating to PMS. Responses to the RFIs and SRFIs were received by the CBSA.^{Footnote 14} The information requested through the RFIs and SRFIs will be used to evaluate if a PMS existed in Türkiye for Borçelik due to distorted input costs; if Borçelik’s export sales of subject goods to Canada and their domestic sales of like goods were impacted differently by distorted input costs; and if information is available for the application of subsection 11.2(2) of SIMR.

[58] The preliminary phase of the investigation is now complete, and due to the discrepancies in Borçelik’s domestic sales and costing information, sufficient information is not available to form an opinion whether a PMS exists such that Borçelik’s export sales of subject goods to Canada and their domestic sales of like goods were impacted differently by distorted input costs.

[59] However, there are indications that a PMS may exist in Türkiye for Borçelik due to distorted input costs. Distortions to COR pricing in Türkiye appear to be caused by the influx of significant volumes of unfairly-traded (low-priced) HRC from China, Russian, Japan and India, which first depressed Turkish domestic and import prices of HRC and cold-rolled coils (CRC), and then further depressed Turkish domestic COR prices.

[60] HRC is a significant input for CRC and both HRC and CRC are used as significant inputs for COR. HRC, CRC and COR are considered as mature products in the steel industry and have a standardized manufacturing processes. They are produced and sold according to well-established standards that specify their chemical composition, mechanical properties, dimensional tolerances, surface finish, etc. By their nature, they are commodity products. HRC, CRC and/or COR offered by one supplier is easily substitutable by another supplier and domestic supply can be easily substituted by imports. In light of this characteristic, purchasers of HRC, CRC and/or COR are very price sensitive when selecting their supply source.

[61] As such, if significant volumes of unfairly-traded (low-priced) HRC imports become available in the Turkish HRC market, these low-priced HRC imports may influence HRC prices in Türkiye. In other words, these low-priced HRC imports may depress the general HRC price level in Türkiye, as their availability would result in downward pressure on the prices in that market. The more competitive a market is, the more there would be downward pressure on the prices. This is due to the effect of increased supply of low-priced products. Furthermore, considering the relationship between HRC, CRC and COR, the general CRC price level and the domestic COR price level in Türkiye could also be subsequently depressed.

[62] Information on the record shows that there are significant volumes of HRC imports into Türkiye from China, Russia, Japan and India for the period from January 1, 2023 to September 30, 2024.^{Footnote 15} This information indicates that imports are the most significant from China. Further, information on the record also demonstrates that the average unit HRC import prices from those four countries for this period are significantly lower than the average unit HRC import prices from those same four countries for the period of July 1, 2022 to June 30, 2023, which is the investigation period for the GOT’s dumping investigation on HRC imports.^{Footnote 16} As discussed previously, the GOT found through their investigation that HRC imports from China, Russia, Japan and India were dumped and caused a material injury to Turkish domestic industry.

[63] Based on the CBSA’s research, it appears that the Southern European market (including Italy) is the most appropriate market that could be selected as the benchmark to evaluate if HRC, CRC and/or COR prices in Türkiye were distorted. This is based on a consideration of the following factors: the geographical proximity between Southern Europe and Türkiye; the relationship between the Europe Union (EU) and Türkiye (e.g. Türkiye’s current status as a candidate country for the EU membership, and Türkiye’s integration into the EU Customs Union since 1995); the free trade agreements between the EU and Türkiye (e.g. European Coal and Steel Community (ECSC) Free Trade Agreement); the stable economic conditions in the EU; and the EU’s trade remedy measures against unfairly-traded HRC, CRC, and COR.

[64] Further, there is also indications that Borçelik’s export sales of subject goods to Canada and their domestic sales of like goods may have been impacted by distorted input costs differently, due to a significant difference between Canadian and Turkish COR market conditions. Information on the record shows a significant difference between Turkish and Canadian COR market conditions in the areas of supply and demand dynamics, economic indicators (such as GDP, GDP growth, inflation rates, interest rates, exchange rates, and unemployment levels), customer behaviors and raw material costs/supplies.^{Footnote 17}

[65] In the final phase of the investigation, the CBSA will continue to review and gather the information necessary in order to form an opinion as to whether a PMS exists in Türkiye for Borçelik due to distorted input costs, which does not allow a proper comparison of Borçelik’s domestic sales of like goods with their sales of subject goods to the importers in Canada.

Decision

[73] On April 17, 2025, pursuant to subsection 38(1) of SIMA, the CBSA made a preliminary determination of dumping respecting corrosion-resistant steel sheet originating in or exported from the Republic of Türkiye by Borçelik Çelik Sanayi Ticaret A.Ş.

Provisional duty

[74] Pursuant to subsection 8(1) of SIMA, provisional duty payable by the importer in Canada will be applied to dumped imports of COR that are released from the CBSA during the period commencing on the day the preliminary determination is made and ending on the earlier of the day on which the CBSA causes the investigation in respect of any goods to be terminated, in accordance with subsection 41(1), or the day on which the CITT makes an order or finding. The CBSA considers that the imposition of provisional duty is needed to prevent injury. As noted in the CITT’s preliminary determination, there is evidence that discloses a reasonable indication that the dumping of COR has caused injury to the domestic industry.

[75] Imports of COR from Borçelik released by the CBSA on or after April 17, 2025, will be subject to provisional duty equal to the estimated margin of dumping, expressed as a percentage of the export price. Appendix 1 contains the estimated margin of dumping and the rate of provisional duty.

[76] Importers are required to pay provisional duty in cash or by certified cheque. Alternatively, they may post security equal to the amount payable. Importers should contact their CBSA regional office if they require further information on the payment of provisional duty or the posting of security. If the importers of such goods do not indicate the required SIMA code or do not correctly describe the goods in the import documents, an administrative monetary penalty could be imposed. The imported goods are also subject to the Customs Act. As a result, failure to pay duties within the specified time will result in the application of the provisions of the Customs Act regarding interest.

Future action

The Canada Border Services Agency

[77] The CBSA will continue its investigation and will make a final decision by July 16, 2025.

[78] If the margin of dumping is found to be insignificant, the CBSA will terminate the investigation and any provisional duties paid or security posted will be refunded to importers, as appropriate. If the CBSA is satisfied that the goods were dumped, a final determination will be made.

The Canadian International Trade Tribunal

[79] The CITT has begun its inquiry into the question of injury to the Canadian industry. The CITT is expected to issue its finding by August 15, 2025.

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

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

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

Retroactive duty on massive importations

[83] Under certain circumstances, anti-dumping duty can be imposed retroactively on subject goods imported into Canada. When the CITT conducts its inquiry on material injury to the Canadian industry, it may consider if dumped goods that were imported close to or after the initiation of the investigation constitute massive importations over a relatively short period of time and have caused injury to the Canadian industry. Should the CITT issue a finding that there were recent massive importations of dumped goods that caused injury, imports of subject goods released by the CBSA in the 90 days preceding the day of the preliminary determination could be subject to anti-dumping duty.

Undertakings

[84] After a preliminary determination of dumping by the CBSA, other than a preliminary determination in which a determination was made that the margin of dumping of the goods is insignificant, an exporter may submit a written undertaking to revise selling prices to Canada so that the margin of dumping or the injury caused by the dumping is eliminated. An acceptable undertaking must account for all or substantially all of the exports to Canada of the dumped goods.

[85] In view of the time needed for consideration of undertakings, written undertaking proposals should be made as early as possible, and no later than 60 days after the preliminary determination of dumping. Further details regarding undertakings can be found in the CBSA’s Memorandum D14-1-9: Information Pertaining to the Acceptance, Enforcement and Renewal of Undertakings in Dumping and Subsidy Investigations.

[86] Interested parties may provide comments regarding the acceptability of undertakings within nine days of the receipt of an undertaking by the CBSA. The CBSA will maintain a list of parties who wish to be notified should an undertaking proposal be received. Those who are interested in being notified should provide their name, telephone number, mailing address and email address to the email address identified in the Contact us section of this document.

[87] If undertakings were to be accepted, the investigation and the collection of provisional duties would be suspended. Notwithstanding the acceptance of an undertaking, an exporter may request that the CBSA’s investigation be completed and that the CITT complete its injury inquiry.

Publication

[88] A notice of the preliminary determination of dumping will be published in the Canada Gazette pursuant to paragraph 38(3)(a) of SIMA.

Contact us

[89] For further information, please contact the email address identified below:

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

Appendix 1: Summary of estimated margin of dumping and the provisional duty payable

The following table lists the estimated margin of dumping and the provisional duty rate as a result of the decision mentioned above. Imports of subject goods released from the Canada Border Services Agency on or after April 17, 2025, will be subject to the provisional duty at the rate specified below.