The Canadian International Trade Tribunal (CITT) has rescinded its June 27, 2000, finding on dumped hot rolled carbon steel plate from Brazil, Finland, India, Indonesia, Thailand and Ukraine and subsidized hot rolled carbon plate from India, Indonesia and Thailand.

The CITT’s decision follows an expiry review conducted in accordance with the Special Import Measures Act. Notice of the review was issued on October 13, 2004, and the Tribunal and the Canada Border Services Agency (CBSA) sent questionnaires to Canadian producers, importers, exporters and foreign producers of plate. The CBSA initiated its investigation in October 2004 to determine whether expiry of the finding was likely to result in continuation or resumption of dumping and subsidizing of plate originating in the subject countries.

The CBSA concluded its investigation on February 10, 2005. As a result of its investigation, the CBSA determined that expiry of the finding was likely to result in continuation or resumption of dumping of plate from Brazil, India, Indonesia and Ukraine, was unlikely to result in the continuation or resumption of dumping of plate from Finland and Thailand, and was likely to result in the continuation or resumption of subsidizing of plate from India, Indonesia and Thailand.

The Tribunal initiated its inquiry on February 11, 2005, to determine whether the expiry of the finding was likely to result in injury or retardation to the domestic industry. Hearings were held in Ottawa, Ontario, on May 2 and 3, 2005. Algoma Steel Inc. and Ipsco Inc., which were represented by counsel at the hearing, submitted evidence and made arguments in support of a continuation of the finding. Azovstal Iron & Steel Works, a foreign producer in Ukraine, was represented by counsel at the hearing and made a submission in support of a rescission of the finding.

Until 2003, the plate industry in Canada consisted of Algoma, Ipsco and Stelco Inc. In August 2002, Stelco reduced the operating rate at its Hamilton, Ont., plate mill to 25% of capacity and, in April 2003, Stelco idled its plate mill. The Hamilton mill was capable of producing the full range of plate, including thick plate. Today, Algoma and Ipsco account for the majority of plate produced in Canada.

Some Canadian steel service centers also cut to length plate from plate in coil form. On the basis of data obtained in earlier inquiries, it has been estimated that sales of plate cut from coil by steel service centers account for about 15 percent of the market for plate.

The Tribunal noted that the domestic industry did very well in 2004 despite its apparent unwillingness to increase its plate production to supply a new source of demand in the market. The Tribunal also stated that it appears that, despite some softening in prices, the industry will continue to do well in 2005 and 2006. The Tribunal heard testimony that the global plate market is, by and large, a stronger market than the general steel market and that the industry can expect strong global demand in the major market sectors that it supplies, such as shipbuilding (particularly in Asia), oil and gas, defense, agriculture and construction. In North America, a strong demand for plate is also expected in the agricultural and non-residential construction sectors.

Raw material and energy costs are one area over which the industry does not have much control. Prices are set on a global basis for the major inputs such as iron ore and coking coal and, for 2005-2006 contracts, iron ore prices rose by over 70%, while the price for coking coal nearly doubled. The Tribunal believes that Algoma may fare better on certain input costs, since its coal costs are fixed by contracts that extend into 2006. Ipsco, being a mini-mill, is more affected by the price of scrap. According to testimony, scrap prices have recently fallen, which should provide a cost advantage to Ipsco.

The Tribunal further stated that the domestic industry is currently producing about as much plate as it can and does not intend to significantly increase the volume of plate that it produces for sale in the domestic market. Further, considering that the market sectors that use plate, both globally and in North America, are doing well and are expected to continue to do well in the near to medium term, the Tribunal is of the opinion that plate prices will remain relatively high and that the domestic industry will continue to be profitable.

Based on the above, the Tribunal stated that it does not consider that expiry of the finding would likely result in material injury to the domestic industry in the near to medium term.