US PET resin makers seek action against imports

Four U.S. PET resin makers are asking for anti-dumping duties to be placed on PET imported from five countries.

PET makers DAK Americas LLC, Indorama Ventures USA Inc., M&G Polymers USA LLC and Nan Ya Plastics Corp. America have filed petitions alleging that imports of PET resin from Brazil, Indonesia, South Korea, Pakistan and Taiwan are being sold at less than fair value in the U.S. and are causing material injury to the domestic industry.

Those firms have asked the U.S. government to investigate the dumping and any injury, and to impose anti-dumping duties on imports of PET resin from the named countries, according to a Sept. 26 news release from the New York law firm of Kelley Drye & Warren LLP. The petitions were filed with the U.S. Department of Commerce and the U.S. International Trade Commission.

The filing is in response to surging volumes of "aggressively priced" PET resin imports from Brazil, Indonesia, South Korea, Pakistan and Taiwan, according to the release. Import volume from those countries grew more than four times from 2014 to 2016, climbing from 148 million pounds to almost 600 million pounds.

PET resin from those countries "continued to rapidly enter the U.S. market in the first half of 2017," officials said in the release. Imported material "undersold the domestic industry, taking sales from and exerting considerable downward pricing pressure on U.S. producers."

As a result of increasing volumes of low-priced imports, the condition of the domestic industry has suffered, officials added. U.S. producers "have experienced declining production and shipment volumes and deteriorating financial performance as a result of the lost sales and price depression caused by the subject imports."

Foreign producers of PET resin "also continue to threaten the domestic industry with additional injury due to their massive and growing production capacity and extensive unused capacity that will be used to export large volumes of unfairly low-priced product to the United States," they said in the release, adding that the injury to the domestic PET resin industry "is likely to continue if duties are not imposed to offset these unfair trading practices."

Paul Rosenthal of Kelley Drye & Warren said that "the substantial increase in unfairly-traded PET resin from these five subject countries has hit the domestic industry hard and threatens the livelihoods of American workers."

"U.S. PET resin producers are seeking the trade relief that is badly needed for the recovery and future success of the industry in the United States," he added.

According to the release, the Commerce Department will determine whether to initiate the anti-dumping duty investigations within 20 days of the filing. The USITC will reach a preliminary determination of material injury or threat of material injury within 45 days. The entire investigative process will take approximately a year, with final determinations of dumping and injury likely occurring by fall 2018.

This isn't the first time U.S. PET maker have taken such action. In March 2016, the trade commission voted to place anti-dumping duties on PET resin from Canada, China, India and Oman. That request had been made by DAK, M&G and Nan Ya, again represented by Kelley Dryer & Warren.

Market analyst Phil Karig, managing director of the Mathelin Bay Associates consulting firm in St. Louis, said that it's “not surprising” that PET has flooded into the U.S. from these countries in the last year.

“Once anti-dumping duties were levied on imports from other PET producing countries, especially China, PET buyers here naturally went looking for other suppliers of low cost PET imports,” Karig said in an email to Plastics News. “Absent anti-dumping duties being levied on just about every foreign source of PET, the market has evolved into a game of whack-a-mole where making imports from one country more expensive quickly shifts demand to other low-cost countries.”

He added that, unfortunately for U.S. PET buyers, this new anti-dumping complaint “has the potential to substantially reduce the remaining options for low cost imports.”

“The last complaint was largely successful,” Karig said. “And with the new administration in Washington more favorably disposed to aggressively pursue unilateral solutions to perceived unfairness in relations with our trading partners...the chances of this latest complaint succeeding are quite high.”