It was announced yesterday that the government of India will be likely to impose anti-dumping measures on Chinese imported R-134a refrigerant. The proposed tariff would be $1.22 per kilogram of refrigerant brought in, or for us Americans an additional $00.55 per pound on 134a Chinese imports.
The goal of adding tariffs to the imported Chinese is to make the cheaper imported refrigerant cost higher than the domestically made 134a made in India. This allows the local companies to gain sales while punishing the imported product. India’s sole manufacturer of 134a, SRF LTD, filed the application for anti-dumping directly to India’s government. In it’s ruling, the Indian Commerce Ministry, concluded that there is dumping of 134a imports into the India market and hinted that they were going to be ruling in favor of the tariff.
In my opinion the anti-dumping tariff will pass in India without issue mainly because they already passed a law similar in 2011 at $1.15 per kilogram. This tariff from 2011 is set to expire at the end of this year, so this proposed anti-dumping would replace the current one.
The United States
While this article covers India’s measures to stop the flow of Chinese imports it should be noted that the same fight has been going on in the United States over the past couple years. At the end of 2014 an anti-dumping suit was filed with the International Trade Commission, but after some debate it was denied in the middle of 2015.
After only a few months later the law-suit was brought back up and filed again, this time by the HydroFluroCarbon Coalition. This coalition is comprised of the various manufacturers of refrigerants in the United States such as Chemours, Honeywell, and Mexichem. Although the first measure was denied I believe that this latest measure could very well pass.
The trade commission came out with a preliminary ruling in April of 2016 stating that they were leaning towards approving the anti-dumping. They are set to announce their decision in August of 2016. I wrote an article on this in April, click here to view.
If the measure does get approved it is not known yet exactly how much the tariff will be and if it will only apply to Chinese imports. The one thing that I can be sure of is that if this does get approved in the United States expect the pricing on R-134a to go haywire. Can you imagine an extra dollar per pound tariff on a thirty pound cylinder?
There are some companies who have been buying up on R-134a in expectation of a yes ruling, but if the commission decides on another no and the price drops these companies are on the hook with high priced product. It’s a gamble either way, no one really knows what the United States will decide.
Thanks for reading,