The U.S. Department of Commerce (DOC) has revoked the antidumping duty orders on solid urea imports from Russia and Ukraine, according to a Dec. 20 notice in the Federal Register. The decision follows the fourth sunset review of the order, which was initiated on Nov. 1.
According to the notice posted by the DOC’s International Trade Administration (ITA), the DOC’s decision to revoke the order came after no domestic interested parties opted to participate in the review, which occurs every five years. On Nov. 21, the DOC notified the International Trade Commission (ITC) that it intended to revoke the antidumping duties, which have been in place since the late 1980s.
“Because the domestic interested parties did not file a notice of intent to participate in these sunset reviews, the Department finds that no domestic party is interested in participating in these sunset review,” the DOC said. “Therefore … we are revoking these antidumping duty orders effective Dec. 20, 2016, the fifth anniversary of the date the Department published its most recent notice of continuation of the antidumping duty orders.”
The DOC noted that it did, however, receive a submission on Dec. 1 from the Ministry of Economic Development and Trade of Ukraine regarding its position on the antidumping duties.
The revocation of the duties comes after years of changing market dynamics, and on the cusp of a new presidential administration that has signaled its intent to embrace more friendly relations with Russia.
The antidumping duties were first imposed in 1987 and covered solid urea imports from the German Democratic Republic (GDR), Romania, and the Soviet Union. After the collapse of the Soviet Union in 1991, the order was divided into 15 states, including Russia and Ukraine. In 1999, the orders were continued only for Russia and Ukraine (GM Oct. 25, 1999.)
In past reviews, arguments in favor of keeping the antidumping duty orders centered on state-subsidized natural gas prices in Russia and Ukraine that benefited urea producers and allowed them to import urea into the U.S. at low prices that threatened injury to the domestic industry.
Domestic parties who participated in past reviews included the Ad Hoc Committee of Domestic Nitrogen Producers, whose urea-producing members included CF Industries Inc. and PCS Nitrogen, a unit of Potash Corp. of Saskatchewan Inc. Agrium Inc. also submitted comments as an intervener in past DOC actions involving urea imports from Russia and Ukraine.
The last two sunset reviews were contentious. In 2005, a group of Russian urea producers appealed the DOC’s decision to continue the antidumping duty order, and the Agricultural Retailers Association (ARA) and other buying groups also weighed in, arguing for an end to the antidumping duties because of changing market dynamics (GM Dec. 3, 2007).
The last sunset review in 2011 (GM Nov. 21, 2011) drew responses from a number of domestic producers, as well as a letter from U.S. Senators Rob Portman (R-Ohio) and Sherrod Brown (D-Ohio) urging the DOC to rule that American urea producers such as PCS Nitrogen Ohio L.P., which operates a nitrogen fertilizer plant in Lima, Ohio, should continue to receive relief from “unfairly traded Russian and Ukrainian imports” of urea. The ruling to continue the antidumping duties was disputed by two ITC judges, however, who wrote a dissenting opinion in the case (GM Feb. 6, 2012)
Over the last 10 years, the U.S. industry has consolidated and benefited from low gas prices, which spurred a number of new domestic production facilities that are now coming online, including CF’s expansion at Port Neal, Iowa, and the OCI plant at Wever, Iowa (see related p. 1 story). By contrast, Ukraine has higher natural gas prices and has become a swing producer.