CF Industries Holdings Inc., Deerfield, Ill., on June 30 filed petitions with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) requesting the initiation of antidumping and countervailing duty investigations (CVD) on imports of urea ammonium nitrate solutions (UAN) from Russia and Trinidad and Tobago (Trinidad).
“For too long, UAN producers in the United States, who are among the most efficient in the world, have competed on an uneven playing field due to dumped and unfairly subsidized imports from Russia and Trinidad,” said Tony Will, CF President and CEO. “The duties we are seeking will restore fairness to our highly competitive industry and help ensure that American UAN producers remain a reliable source of fertilizers for American farmers for years to come.”
CF said in May it was taking a hard look at bringing a CVD case regarding UAN imports from Russia and Trinidad (GM May 7, p. 1). At the time, CF noted that The Mosaic Co.’s successful CVD case against Russian phosphate imports included findings of subsidized natural gas.
CF added that the gas angle was even less in DAP and MAP, but that it would be 70-80 percent of the cost of UAN production. “So, when ITC found that there was subsidized gas and therefore duties that the Russians need to pay, you know if that’s true on MAP and DAP, it should be for UAN,” said CF Senior Vice President and CFO Chris Bohn.
In first-quarter 2021, CF’s UAN segment had the worst performance by far of its five segments, posting a gross margin of only $2 million on net sales of $232 million, down from the year-ago $42 million and $235 million, respectively (GM May 7, p. 32). It was the only CF segment to see a price decrease.
The U.S. became a more attractive market for Russian and Trinidad producers in 2019 when the European Union imposed duties on imports from Russia, Trinidad, and the U.S. (GM Oct. 11, 2019).
According to the CF petition, UAN imports from Russia topped 1.7 million st for calendar year 2019, up from 2018’s 1.23 million st. However, they have been on the decline since then. Trinidad imports topped out at 996,136 st in 2020, up from 2019’s 942,578 st. They have also been on the decline.
The most recent data has Russian imports at 843,812 st for the current fertilizer year July 2020-April 2021, down 31.2 percent from the year-ago 1.23 million st (GM June 18, p. 1). Trinidad imports were off only 1.9 percent, to 792,817 st from 807,983 st. Total imports were down 14.3 percent for the fertilizer year, to 2.1 million st from the year-ago 2.44 million st.
However, North American UAN NOLA prices have been under pressure since December 2018, losing their premium over urea and dragging the bottom last July-August at $115/st FOB. Significant improvement did not come until the current fertilizer rally that lifted all boats.
In the coming weeks, DOC will decide whether to initiate investigations to determine the extent of dumping and unfair subsidies associated with the imports, and the ITC will initiate a concurrent investigation to determine whether such imports materially injure the U.S. industry. CF said it intends to participate actively in proceedings before both agencies.