The US International Trade Commission (ITC) released its full report on Aug. 9, explaining in more detail its July 18 unanimous decision that the US UAN industry was not materially injured or threatened with material injury by reason of imports of UAN from Russia and Trinidad and Tobago (GM July 22, p. 1).
In evaluating the price effects of the subject imports, ITC said under the Tariff Act it considered whether there had been significant price underselling by the imported product and if the effect of the imports depressed prices by a significant degree or prevented price increases.
The ITC collected usable price data from seven US producers and nine importers. It said the price data showed that cumulated subject imports undersold the domestic product in 39 of 108 monthly comparisons, or 36.1% of the time, at margins ranging between 0.1 and 22.1%, averaging 8%. The imports oversold domestic product in the remaining 69 of 108 monthly comparisons, or 63.9% of the time, at margins ranging between 0.1 and 47%, averaging 14.3%.
Months in which subject imports undersold domestic product accounted for 41.9% of the reported volume, or 2.5 million st, whereas the months imports oversold domestic product accounted for 58.1% of reported volume, or 3.5 million st.
A majority of responding purchasers (22 of 33) reported that they usually purchased the lowest priced UAN. However, the ITC noted that other purchasers identified non-price reasons for purchasing imported product instead of domestic, including lack of domestic product availability, regional unavailability, and logistics.
“In light of the evidence on record, we find that subject import underselling was not significant,” said the decision. “We note that the domestic industry gained 2.2 percentage points of market share from subject imports over the period.”
ITC also said that in 2021, subject imports maintained a significant presence in the market, but the domestic industry was able to raise prices substantially, including prior to the petitions being filed. It also said the record did not show any significant buildup of subject import inventories during the 2019-2020 period, whether held by importers or by purchasers. It added that the domestic industry increased US shipment quantity by 7% and market share by 3.7% between 2019 and 2020.
“As domestic prices increased sharply from 2020 to 2021, and subject import volumes remained relatively flat, the domestic industry’s financial performance increased dramatically to the highest level of the period of investigation (POI),” said ITC.
ITC noted that volumes of product from Russia and Trinidad and Tobago both declined over the POI, and while their volumes remained significant, pricing data indicated that the imports generally followed the same price trends over the POI.
“It is noteworthy that the subject producers’ declining focus on the US market during the POI, and their declining exports to the US, occurred despite the antidumping measures imposed by the EU on UAN from Russia and Trinidad and Tobago in 2019.”
ITC found that the subject imports did not depress prices for the domestic product to a significant degree.
ITC said the record indicated that the subject producers are unlikely to substantially increase their exports to the US in the imminent future, with reported capacity and production down from 2019 to 2021, with a projected decrease in 2022 and 2023.
The ITC found that the domestic industry’s performance improved by many measures and the industry gained market share over the POI. It said the domestic industry added capacity and workers and raised prices during the POI, and its gross profits and operating income both exceeded $1 billion in 2021.
“Given the domestic industry’s strong financial performance in 2021, we do not find that the industry is vulnerable to material injury from cumulated subject imports.”
The Commission public report, Urea Ammonium Nitrate Solutions from Russia and Trinidad and Tobago [Inv. Nos. 701-TA-668-669 and 731-TA-1565-1566 (Final), USITC Publication 5338, August 2022] contains the views of the Commission and information developed during the investigations. The report may be accessed on the USITC website at http://pubapps.usitc.gov/applications/publogs/qry_publication_loglist.asp.