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India extends the anti-dumping duty on imports of CPVC resin and compound from China and Korea for five years

11 Jun 2024 16:36 IST
In a major relief for domestic producers, India has extended the already levied anti-dumping duty (ADD) on chlorinated polyvinyl chloride (CPVC) imports from China and South Korea for five years, effective immediately. With this, the ADD on CPVC resin and compound ranging between US$593 and US$792 a tonne will continue until June 2029, unless revised earlier. The move aims to reduce cheap imports and protect the interests of domestic producers, which will eventually help them allocate fresh investments for capacity expansion.

A recent notification issued by the Directorate General of Trade Remedies (DGTR), under the Union Ministry of Commerce & Industry, found that there is a likelihood of continuation or recurrence of dumping and injury if the existing anti-dumping measures are allowed to cease. “The Department of Revenue Intelligence (DRI) is of the view that continuation of the duration of the duty is required on the imports of CPVC from China and Korea. The form of measures, the Authority considers it appropriate to recommend the modification of the measure to impose a fixed quantum of ADD. The authority examined the quantum of duty that should be recommended to mitigate the dumping injury. The volume of dumped and injurious imports from China and Korea to India and to the rest of the world has also been considered before for extending ADD.”

Furthermore, the surplus capacities coupled with capacity expansions and the price to third countries have also been examined by the concerned Indian authority. Under these circumstances, the authority considers it appropriate to recommend the continuation of the anti-dumping measures on the import of CPVC from China and Korea, which would address and mitigate the likelihood of dumping and injury.

CPVC import during the investigation period

Period

Volume (tonnes)

July ’21 – Jun’22

206,417

Apr’21-Jun’22

205,773

Apr’20-Mar’21

132,134

Apr’19-Mar’20

168,374

Sources: Directorate General of Trade Remedies, and Polymerupdate Research


The notification further reads, “Imports of CPVC have been reported at prices nearing benchmark price and have, therefore, did not attract anti-dumping duty. This has resulted in significant avoidance of anti-dumping duty and consequent loss of revenue to the government. To determine the quantum of anti-dumping duty, the Department of Revenue Intelligence has considered the dumping margins and injury margin determined in the original investigation.”

Taking into account the factual matrix of the case and having regard to contentions raised and examination of the authority on import price being aligned to benchmark level, it is deemed appropriate to recommend a fixed form of anti-dumping measure. The authority thus considers it appropriate and necessary to recommend the continuation of a definitive anti-dumping duty. Accordingly, considering the facts and circumstances of the case, the DGTR recommended an anti-dumping to be extended for another five years.

Existing duty and its expiry
The original anti-dumping investigation concerning the imports of CPVC from China Korea was initiated by the DGTR on March 28, 2019, which recommended in July 2019 the imposition of provisional ADD for an initial period of six months. Accepting this recommendation, the Ministry of Finance notified the imposition of ADD on CPVC imports from China and Korea. Again the ADD was extended for five years expiring on August 25, 2024.

The prima facie evidence submitted by the domestic industry, the DGTR issued a public notice, initiating an ADD investigation to evaluate whether the expiry of such duty is likely to lead to the continuation of recurrence of dumping and injury to the domestic industry and if there is a need for continued imposition of the ADD.

Current status of India’s CPVC industry

Company

Capacity (tonnes)

Investment (Rs crore)

Plant status

DCW Ltd

10,000

300

Started

Epigral Ltd

30,000

200

Started

DCW Ltd

10.000

150

Expected production shortly

Epigral Ltd

45,000

300

Expected production shortly

Lubrizol Ltd

100,000

1,200

Plant construction started

DCW Ltd

20,000

150

Environmental clearance pending

Total

215,000

2,400

 

Source: Directorate General of Trade and Remedies, and Polymerupdate Research


Meanwhile, the period of investigation for the present investigation was considered from July 1. 2022 to June 30, 2023, and the injury period analysed between April 1, 2019, and June 30, 2022. The notification clarified that the Indian authority was satisfied during investigation period as to the accuracy of the information supplied by the interest parties, which forms the basis of the final findings. The investigating officials verified the data documents submitted by the domestic industry, and the interested parties to the extent considered relevant, practicable, and necessary.

The issue
The application was filed by DCW Ltd and supported by Epigral Ltd. No other company is producing CPVC in the market between April 2019 and June 2022. Lubrizol along with Grasim Industries Ltd has proposed to set up a CPVC resin manufacturing unit with a capacity of 100,000 tonnes to meet the growing demand for piping applications in neighbouring countries. The plant is expected to be operational by early 2025.

As a result of dumping from China and Korea, users asked an unreasonably lower price from the Indian producers citing Chinese prices. The domestic industry decided to purchase a small quantity of CPVC resin from the market to check the import prices. Imposition of the ADD improved the performance of the domestic industry which has fully established itself and has been producing to the optimum levels. Further, this has now encouraged other domestic players to set up their plants for CPVC. The Indian producers have also raised their production capacity to meet India’s growing demand.

According to the DGTR notification, India’s total CPVC annual production capacity stands currently at 215,000 tonnes against its yearly demand of 252,000 tonnes. Over and above, Indian players have allocated over Rs 2400 crore of fresh investment on capacity expansion to meet the growing domestic demand.

Applicable anti-dumping duty on Chlorinated Polyvinyl Chloride (CPVC)

Country of origin

Country of exports

Specification

Amount (US$/tonne)

China PR

Any country including China PR

CPVC resin

790

China PR

Any country including China PR

CPVC compound

605

Any country other than China PR and Korea RP

China PR

CPVC resin

790

Any country other than China PR and Korea RP

China PR

CPVC compound

605

Korea RP

Any country including Korea RP

CPVC resin

593

Korea RP

Any country including Korea RP

CPVC compound

792

Korea RP

Any country including Korea RP

CPVC resin

593

Korea RP

Any country including Korea RP

CPVC compound

792

Any country other than China PR and Korea RP

Korea RP

CPVC resin

593

Any country other than China PR and Korea RP

Korea RP

CPVC compound

792

Source: Directorate General of Trade and Remedies (DGTR)


Minuscule volume of imports
The authority notes that the present application has been filed by DCW Ltd which has denied having import of CPVC. However, DCW Ltd further said that it purchased certain quantities of the CPVC resin from the domestic market. Hence, the purchase of CPVC resin by the domestic industry is minuscule in volume. The authority is required to examine if the domestic industry has imported or purchased imported CPVC in such large volumes and under such conditions as to render such domestic producers ineligible.

India’s DCW Ltd has undertaken a substantial investment of Rs 100 crore to set up its second plant for CPVC production and the plant has become operational. The company also submitted that it has plans to set up another plant for the product. Another producer, Epigral Ltd (formerly known as Meghmani Finechem Ltd), is a producer of the product in India with an annual capacity of 30,000 MT in the period of investigation. Epigral has filed a letter stating that they have expanded capacity and commenced commercial production on their new plant of 45,000 MT.


DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com