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News
July 13, 1998 02:00 AM

MEXICO INVESTIGATES PS DUMPING CHARGES

Joann D. McKinlay PLASTICS NEWS CORRESPONDENT
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    MEXICO CITY — The Mexican government may impose protective tariffs on imported polystyrene resin.

    The government trade ministry, Secretaria de Comercio y Fomento Industrial (Secofi), is investigating after a complaint by the two principal PS producers in Mexico, Resirene SA de CV and Poliestireno y Derivados SA de CV. The Mexico City-based firms claim European PS producers are selling resin in Mexico below market prices.

    U.S. suppliers are not included in the dumping investigation.

    The leading European PS producer disputes the claims.

    ``BASF ... has had nothing to hide,'' said Klaus Frei, director of BASF Mexicana SA de CV's polymers division. He said the two domestic Mexican suppliers, which ``until one year ago were the only producers in Mexico, are trying to close the national PS market since they are not prepared to deal with a global and open market.''

    BASF no longer imports PS into Mexico; the company started operations at its PS plant in Altamira, Mexico, in 1997.

    This is the second investigation touched off by the two domestic PS suppliers. A 1992 study resulted in tariffs on PS resins from some U.S. suppliers beginning in 1993. The government in December 1997 agreed to extend those tariffs.

    This time the companies targeted imports from any of the 15 member countries of the European Union, and from the United States. However, Secofi on June 10 decided the dumping investigation would proceed against the European Union countries, but not against U.S. suppliers.

    Representatives of the Mexican companies requesting the investigation declined to comment, stating that they could not do so because it is currently under way. Both referred questions to Secofi.

    The two Mexican companies claim that from 1992-96, crystal PS imports increased 144.1 percent from the United States and 251 percent from the European Community.

    According to Secofi, PS consumption in Mexico increased 26 percent in that same period, and profits for the two companies fell by 19 percent.

    Figures from BASF Mexicana reflect the change in the market.

    ``We had 15 percent of the Mexican market before the Altamira plant opened, and now we have closer to 40 percent,'' Frei said.

    Secofi found that PS imported from the European Union had a price that was 13 percent lower than that of the average sale price of the Mexican firms from July 1996 to June 1997.

    Under the North American Free Trade Agreement, crystal PS from the United States should carry a 9 percent tariff, while EC and other imports carry a 15 percent tariff. However, as a result of the earlier dumping investigations, PS coming from the United States now carries tariffs ranging from 11.8-44.3 percent, and BASF pays a 28.1 percent tariff on imported PS.

    The next stage of the investigation is to study if Mexican processors reduced purchases overall, or just those from the Mexican PS suppliers, according to Secofi.

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