The European Commission (EC) has begun a sunset expiry review of the antidumping measures in place on imports of ammonium nitrate (AN) originating from Russia following a request for a review by Brussels-based Fertilizers Europe. Fertilizers Europe represents the majority of Europe’s major fertilizer manufacturers.
According to the announcement of the review in the E.U.’s Official Journal on Sept. 23, the request for a review by Fertilizers Europe is on behalf of over 73 percent of the integrated E.U. AN industry production using calendar year 2018 as a base reference. Fertilizers Europe’s request is based on the grounds that “the expiry of the measures would be likely to result in continuation of dumping and recurrence of injury to the E.U. industry.” The request by Fertilizers Europe was lodged with the Commission on June 21.
The antidumping measures currently in place on imports of Russian AN into the E.U. were due to expire on Sept. 25, but will now remain in place during the EC investigation, which could take as long as 15 months.
The E.U. ruled last November on two partial interim reviews of the antidumping measures in place on Russian AN imports into the E.U. (GM Nov. 16, 2018); the reviews were initiated in August 2017. One interim review was limited to injury on behalf of eight national farmers’ organizations, who had called for the removal of the duties. as users of the product.
The EC had found “certain changed circumstances,” but also found that the profound threat of injury presented by the Russian AN industry in terms of massive expert capacity, price undercutting, and cost underselling “truly remained” (GM Nov. 16, 2018). The net result was a reduction in the E.U. antidumping specific duty from a rate of €47/mt to a rate applied typically currently of €32.7/mt.
Under the other interim review, which had been prompted by a request by Russia’s Acron Group, Moscow, the E.U. found there were “no changed circumstances” with regard to the domestic gas situation in Russia (GM Nov. 16, 2018).
The Fertilizers Europe application for a review claims there to have been “regular high structural dumping rates over the year 2018 which arise from Russian exporter/producers’ exploitation of artificially low state fixed gas costs in Russia,” according to an EC executive summary of the application.
The manufacturing industry body argues that the very likely recurrence of dumping arises “from the very definite and permanent continuation of distorted artificially low state fixed gas prices in Russia – probably even up to the year 2035, according to a Gazprom Capital Markets Day in February 2019. It claims the expiry of the measures would result “in a permanent triple threat of injury” for the E.U. industry.
It explained that this triple threat of injury arising as:
(i) there is actual dumping or “the permanent menace of dumping campaigns” by Russia on the E.U. market;
(ii) Russia’s domestic gas pricing policy is allied with “a deliberate gas dual pricing policy,” whereby gas is sold on an artificially low state fixed basis in Russia to local UAN industry – $2.4 mmBtu in 2018, while selling at “very high export prices” to the E.U. ($6.8 mmBtu). “Thus, the E.U. nitrogen fertilizer industry is injured by Russia/Gazprom’s sale of “high export monopolistic gas prices” to Europe under “a Russian government-run export pipeline monopoly;” and
(iii) The low Russian gas pricing provides the Russian exporters/producers with “a menacing and dangerous” ability to conduct “very serious high levels” of both price undercutting and underselling, according to the Fertilizers Europe application.
Evidence on price cutting and underselling, as well as evidence on the likely recurrence of volume injury, was also submitted.
Antidumping measures have been in place on imports of Russian AN since 1995