Commerce Dept. to consider imposing countervailing duties

By MATEUSZ PERKOWSKI

Capital Press

A preliminary investigation by the U.S. International Trade Commission indicates China is dumping onto the U.S. market several chemicals used to manufacture fertilizers and pesticides.

The commission determined that imports of certain phosphate salts harm or threaten U.S. manufacturers due to Chinese subsidies, which allow the chemicals to be sold in the U.S. at below fair market value prices.

Two of the chemicals studied in the investigation, monopotassium phosphate and dipotassium phosphate, are ingredients in phosphate fertilizers, greenhouse nutrients and fungicides.

The commission’s conclusions will now be studied by the U.S. Commerce Department, which is expected to make preliminary determinations about countervailing and antidumping duties by March 2010.

The commission launched the investigation in October after being petitioned by two U.S. phosphate salt manufacturers, ICL Performance Products of St. Louis, Mo., and Prayon Inc. of Augusta, Ga.

The companies claimed Chinese manufacturers were deliberately underselling U.S. phosphate salt producers to swamp the market.

Aided by Chinese government policies, these producers have been able to capture more than one-third of the import market for these chemicals, up from less than one-sixth just two years ago, the U.S. companies alleged.

Imports of the chemicals into the U.S. have roughly tripled so far this year, to about 9 million pounds, the companies claimed.

The U.S. petitioners say the Chinese government is trying to encourage consolidation and vertical integration in its yellow phosphorous industry.

The country is a major producer of yellow phosphorous and wants to improve its capacity to generate value-added products, such as phosphate salts, instead of simply exporting large quantities of the raw material overseas, the petition said.

For that reason, the Chinese government is imposing export taxes to discourage yellow phosphorous shipments out of the country — thereby boosting internal supplies, driving down domestic prices and helping value-added manufacturers, the petition said.

China also helps value-added producers with forgivable loans, reduced shipping costs and tax benefits, the petition said. The amount of subsidies is difficult to quantify since they’re often enacted by lower-level officials pressured by national Chinese authorities.