Anti-dumping PET ruling could push prices up for European converters

By Rory Harrington

- Last updated on GMT

Related tags Market share Middle east United arab emirates European union

A European Union proposal to impose import duties on polyethylene terephthalate (PET) shipments from Iran and the United Arab Emirates (UAE) is expected to result in cost increases for European converters, said Brussels.

The European Union said it intended to slap the anti-dumping and countervailing charges after a probe found companies from the Middle Eastern countries had been selling PET into Europe at below market prices. The illegal practices had hit market share and profits of European PET producers.

While the Commission acknowledged the ruling could see converters suffer it said any negative effects for them would be “outweighed by the expected benefits for the producers and their suppliers”.

The move would also restore fair competition, reasonable prices and promote further PET recycling, added the regulation.

The penalty, outlined in Regulation (EU) 472/2010, would see a provisional 6.6 per cent anti-dumping duty and a 5.1 per cent countervailing charge imposed on PET imported into the EU from the UAE – a total of €97.14 per tonne.

While no anti-dumping duty was imposed on Iranian companies, they were found to have received subsidies from within the country to make their exports cheaper – in violation of EU rules. Consequently, the EU imposed provisional countervailing duties of 17 per cent of Iranian PET exports into the bloc – equivalent to €142.97 per tonne.

Anti-dumping probe

The interim arrangements came into force on 1 June but will not be finalised until 1 December 2010 to give sufficient time for affected companies to make an appeal. If approved, the penalties would be put in place for five years. The measures apply to PET with a viscosity number of 78ml/g or higher according ISO standard 1628-5.

The EU handed down its decision after launching an investigation into the dumping of PET from the Middle East countries from 1 July 2008 to 30 June 2009. The probe found the volume of dumped PET from the two countries into Europe increased 20 times from over 11,752 tonnes in 2006 to 212,198 tonnes by mid 2009. Iran and the UAE boosted its EU market share from 0.4 per cent to 7.1 per cent during the three years.

Companies from the countries were found to have cut their prices by 15 per cent in the three years up to June 2009. During the investigation period they were also adjudged to have undercut European producers by an average of 3.8 per cent.

Material injury

Such tactics, concluded EU investigators, contributed to the regional PET market share for European producers falling by 10 per cent to 75 per cent between 2006 and 2009 – leading them to provisionally conclude the EU industry had “suffered material injury”.

The dumping also forced European PET prices down “preventing the Union industry from keeping its sales prices to a level that would have been necessary to cover its costs and to realise a profit”.

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