The European Union (EU) has opened an inquiry into whether producers in the U.S., Russia, and Trinidad and Tobago are dumping UAN. The inquiry will determine whether shipments from those countries to the EU are “being dumped, and whether the dumped imports have caused injury to the union industry,” the European Commission (EC), the bloc’s trade authority in Brussels, said in the Aug. 13 issue of the Official Journal.
According to the report, the investigation was prompted by a June 29 complaint filed by Fertilizers Europe on behalf of producers that account for more than 50 percent of the EU’s output of UAN. Fertilizers Europe told Green Markets that they do not comment on prospective or active proceedings under investigation, while the EC said it won’t comment beyond the documents that have been made public.
The complaint alleges that UAN volume and prices under investigation have had a negative impact on the prices charged and the market share held by the EU industry, resulting in substantial adverse effects on the overall performance and financial situation of the EU industry.
The investigation of dumping and injury will cover the period July 1, 2017, to June 30, 2018. The examination of trends relevant for the assessment will be Jan. 1, 2015, through June 30, 2018.
All interested parties wishing to comment on the complaint or any aspects regarding the initiation of this investigation must do so within 37 days of the Aug. 13 notice. Any request for a hearing with regard to this investigation initiation must be submitted within 15 days.
Under new EU rules that speed up dumping probes, the commission has eight months to decide whether to impose provisional antidumping duties against the three countries, and 14 months to decide whether to apply “definitive” levies, which usually last for five years. The provisional date is put as May 13, 2019, and definitive as Nov. 9, 2019.
Major U.S. UAN producer CF Industries Holdings Inc., Deerfield, Ill., had already prepared analysts for the possible inquiry (GM Aug. 10, p. 25), telling them that its UAN exports to the EU account for about only 1 percent of EBITDA, and that it can readily market its product elsewhere no matter what the EC may or may not do.
Referring to the economic challenges facing EU producers, a CF executive, in a call with analysts, said “life is tough in the fourth quartile.” The company said European producers already have a 6.5 percent protectionist tariff for imported products, and yet they are struggling economically. CF noted its own challenges in the U.K., where it must pay much higher natural gas prices, and said that it has been bringing in lower-priced ammonia to the U.K.
CF saw any antidumping action as a move to try to prop up European nitrogen producer economics, but at the end of the day, it said it would be at the expense of European farmers.
The U.S. exported 1.63 million st of UAN in the fertilizer year ending June 30, 2018, up 9 percent from the prior year 1.49 million st. Most, if not all, of those exports were presumably made by CF. Exports to France were up 18.4 percent, to 660,263 st from the prior year 557,392 st, while exports to Belgium were up 18.6 percent, to 167,770 st from 141,491 st. Much smaller quantities went to the U.K., at 27,551 st versus the year-ago 40,812 st, and Ireland – 1,177 st versus 639 st.
After France, Argentina was the second largest taker of U.S. UAN at 413,374 st, up 44 percent from the prior year 287,453 st.