Australian Authorities Investigating US for Dumping

31 Jul 2010 • by Natalie Aster

The Australian Customs & Border Protection Service (ACBPS) is investigating allegations that North American manufacturers have dumped LLDPE into the Australian market.

The investigation began after Australia’s sole LLDPE manufacturer, Melbourne-based Qenos, applied for ACBPS to levy a dumping duty on the Canadian and US manufacturers.

ACBPS’s initial investigation agreed with the claim, which means a formal investigation continues. ACBPS must now complete a “statement of essential facts” by 15 September. Parties will be invited to comment within 20 days of the statement being made public. ACBPS must then make a recommendation to the Federal Customs Minister by 30 October on whether to impose penalties.

The application names two Canadian companies – Dow and Nova – and four US companies – Chevron Phillips, Formosa Plastics, Dow and Exxon Mobil.

Stephen Bell, Qenos general manager-commercial, told ACBPS the company had been forced to meet the importers’ prices to maintain market share. Qenos said most of the imported LLDPE was rotational moulding grade with ultraviolet stabiliser.

Chevron Phillips, in a letter to ACBPS, said it only imported medium density PE to Australia.

Stephen Orava, a lawyer with King & Spalding in Washington, represented the Dow companies. He said Qenos was unable to meet the Australian market demand for LLDPE of 352 million pounds per year, as it produced only 265 million pounds. Qenos also did not produce all grades, so imports were needed, and Qenos itself imported some grades, Orava said.

Orava’s 21-page submission to ACBPS said the global financial crisis and Qenos’s decision to shift from producing film and packaging grade LLDPE to rotational moulding grades were reasons for declining profit, not imports. He also said the end of a drought in Australia influenced the market, because 2007 had been a “boom year” for production of LLDPE water storage tanks.

Peter Hexter, corporate account manager for Dow (Australia), agreed, adding that Dow did not import rotomoulding-grade LLDPE into Australia from the US or Canada.

Melbourne-based Aperio Group, which buys LLDPE from Qenos and import sources, said there was no conclusive evidence of damage to Qenos’s market share and business because of imports, which at times were priced higher than the domestic product.

Another submission — ACBPS suppressed the company name at the author’s request — accused Qenos of withholding supply before a price rise and said having imports available to complete with the sole Australian manufacturer was beneficial for the Australian market. It said imported material was inferior to Qenos’s product and the manufacturer therefore could not argue that imported product was “interchangeable”.

Qenos plants in Sydney and Melbourne produce high, low and linear low density PE and specialty polymers.

Qenos is a subsidiary of China National Bluestar, a joint venture between China National Chemical and Blackstone. ChemChina is a large-scale state-owned enterprise established by the State Council of the People’s Republic of China. Blackstone is a global alternative asset manager and provides financial advisory services.

Source: Plastics and Rubber Weekly

More reports available on the product:

Linear Low Density Polyethylene (LLDPE) Market Research (China)