FocusPP exporters, converters rebut Indian anti-dumping claims

06 March 2009 07:28  [Source: ICIS news]

By Prema Viswanathan

(Recasts lead for clarity)

SINGAPORE (ICIS news)--New Delhi's investigation into allegations of dumping against suppliers from Saudi Arabia, Oman and Singapore was strongly criticised on Friday by polypropylene (PP) exporters to India and domestic converters.

They said the investigation was unfounded and threatened the interests of the Indian plastics processing industry.

The Indian government recently initiated for the first time an anti-dumping investigation into PP imports, in response to an application filed by Reliance Industries, and supported by Haldia Petrochemicals Ltd, India’s only other PP producer, alleging dumping by suppliers from the three countries.

“This is a totally unjustified allegation and we will fight it tooth and nail,” said a Middle Eastern PP exporter. “Indian producers raised prices frequently without any justification last year, causing a lot of hardship to their customers, and are now blaming us for maintaining a reasonable price level.”

The exporters have been given 40 days to respond to the government’s notification on the investigation.

Dumping, under international trade law, occurs when a manufacturer in one country exports a product to another country at a price which is either below the price it charges in its home market or below its cost of production.

India was the top user of anti-dumping measures in 1995-2008, with 520 cases lodged, according to information portal

Recent anti-dumping activity in India has involved melamine, carbon black, soda ash, oxo-alcohols and phthalic anhydride.

A second PP exporter from the Middle East said domestic prices in his country during the period under investigation (April-December 2008) had been consistently lower than those in India. “So the question of dumping does not arise at all.”

A third PP exporter deemed the dumping allegations as a protectionist move. If anti-dumping duty was imposed on imports into India, “it will come back to bite the Indian producers, as their own export markets, such as China and the Middle East, may also resort to the same protectionist tactics,” he added.

Any imposition of anti-dumping duty would set an unhealthy precedent, another resin exporter said, adding “The Middle East producers will be in a much better position compared to Reliance, if they decide to play the game, as they have deeper pockets, due to their access to low-cost feedstocks.”

The inclusion of copolymer PP in the anti-dumping investigation was totally unjustified as far as Saudia Arabia and Oman were concerned and appeared to aim at preventing future imports from there, said the third exporter. Two new PP projects in Saudi Arabia, due on stream by end-March, include copolymer units, targeted at exports as well as domestic consumption.

“Neither Saudi Arabia nor Oman export copolymer, they only export homopolymer, so seeking anti-dumping duties against these countries for copolymer is a ploy to pre-empt future imports from these countries, and has no bearing on the current situation,” he said.

Indian processors, including those which are export-oriented, were deeply upset by the anti-dumping probe and felt the allegations will not hold ground.

“PP availability in the domestic market has been very tight and unreliable in the past few months, so we have had to increasingly depend on imports," said a PP converter who imports 40% of his total requirement.

A second PP converter, who exports 60% of his output, said he was apprehensive that if anti-dumping duties were imposed on imports, he would be totally at the mercy of the domestic producers. “This will not be a happy situation, as they will increase prices arbitrarily, and our margins will be severely squeezed,” he said.

PP imports in the period April 2008-Feb 2009 were 175,000 tonnes, or 12.5% of total consumption. "This marks a 38% increase in imports from the same period the previous year, which is quite significant," a source close to an Indian producer said. Local PP prices during the period ranged $100 (€80) to $200 higher as compared to the imports.

However, some industry sources said restricting low-priced imports would be beneficial for the Indian downstream industry. “What we need is value-addition in the downstream, which China has managed very effectively. We should direct our polymer production towards expanding our own processing industry, so that we export more finished goods rather than polymers,” said the source.

“There will be no incentive for the Indian producers to export PP if their output can be totally absorbed downstream. This will be possible if low-priced imports are curtailed,” said another source close to a domestic producer.

A second source said that the Middle East exporters had no cause for complaint as the import tariffs in their own countries were quite high. “In Saudi Arabia, the import tariff on PP is 12%, whereas in India the tariff is a mere 5%, so who is being [a] protectionist?", he said.

( $1 = €0.8)

To discuss issues facing the chemical industry visit ICIS connect 
For more information on PP, visit ICIS chemical intelligence

By: Prema Viswanathan
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