04 September 2012 16:08 [Source: ICIS news]
LONDON (ICIS)--Egypt's Ministry of Industry and Foreign Trade will respond in October to a report that argues against a 15% import duty imposed by the country on polypropylene (PP), a couple of GCC producers said on Tuesday.
The report, submitted by a group of Gulf Cooperation Council (GCC) producers to the Egyptian government body on 3 September, is a summary of arguments first presented by the GCC producers in a public hearing held on 22 August, attended by both the importing and local PP producers, the sources added.
GCC PP offers into Egypt have become unattractive to buyers after the Egyptian government imposed the import duty on PP resins for a period of 200 days from 5 June.
"We presented our final argument to the body, and we are waiting for them to respond. They are going to reply to all interested parties begining to mid Oct, after that they will give us a chance to respond," said a GCC PP producer.
The GCC report argues the data presented by local authorites on import figures is exaggerated, the producer said. Secondly, a claim that both India and China have undertaken a similar course of action against the GCC countries is incorrect and unsupported by any quaifying data.
Finally, the report argues that local production alone cannot satisfy all the PP consumption requirements in Egypt, the producer said.
"They are going to kill all downstream business," the source added.
A second GCC PP producer that regularly exports to Egypt attributed the import duty to the rising cost pressures on Egyptian producers from loss of feedstock from Libya.
"I think they are right to regulate it. They lost the feed supply from Libya which made them import their raw material from Italy and so on... so that drove up their cost, which made it hard for them to compete with imports," the source said.
But the producer said the imports have to continue as downstream buyers in Egypt "will also want international supply especially for some of the grades."
Homopolymer Raffia PP September imports offers are at $1,420-1,470/tonne (€1,122-1,161/tonne) CFR Egypt.
"Any interested party can buy this. But at $1,470/tonne, plus 15% import tax, who will buy it?" asked the first GCC producer.
Local Egyptian PP producers include Egyptian Propylene and Polypropylene Co (EPPC) and Oriental Petrochemicals Co (OPC).
($1 = €0.79)
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