I can’t say that I am surprised by this. Most people saw this coming when the international trade commission ruled against MexiChem in the anti-dumping lawsuit on Chinese R-134a in November of 2014. The reader’s digest version of the lawsuit is that MexiChem is claiming that the Chinese R-134a Refrigerant that is being imported to the United States is being brought in at an unfair price. The price point of which it is being brought in makes it so North American manufacturers are either not able to compete or have to drop their margins down to barely anything. The Chinese’s price on 134a is so low because their government subsidies the product to artificially reduce the cost of their refrigerant and to make it easier to export. They then bring it into America at $20, $30, or $40 a jug lower than the American competition. Mexichem proposed to have the federal goverment issue tariffs against the incoming 134a product with hopes that the tariffs would offset the lower price refrigerant and allow North American companies to compete against the Chinese product.
The announcement of MexiChem’s lawsuit in late 2013 caused the price of R-134a refrigerant to sky rocket. I remember buying at about $60-$70 a jug back then and within a couple weeks it jumped up to about $150 a jug. No one knew for sure what was going to happen. Were there going to be tariffs instated on all imported refrigerant? Was this new price in the $100s going to be the industry standard now? Most companies were anxiously awaiting the trade commissions’ ruling.
Well, in November of 2014 the trade commission came out against MexiChem saying that the imported refrigerant does NOT put locally based companies at an unfair advantage in the market place. You can read this ruling by clicking here. Obviously, MexiChem did not like this decision by the trade commission and promised to appeal. Since November it’s been rather quiet, but that was most likely them getting their lawyers ready for the next battle.
The Appeal
There was a decision made on MexiChem’s case of anti-dumping on R-134A Refrigerant by the International Trade Commission. The gist of MexiChem’s case is that the Chinese Refrigerant is being imported in such quantity and at such a low price that it prevents American companies from competing. They filed a lawsuit to the ITC hoping that tariffs would be forced against the Chinese product which would in turn raise the cost of the imports to be on the same level as the American made product.
Well, it was announced in January 2015 that MexiChem is formally appealing the trade commission’s ruling. An article about the challenge can be found by clicking here. The case is expected to be in front of the trade commission again in about a year from today. I am a little surprised that they are putting so many resources into this appeal considering that 134a will most likely be banned in the next five years or so.
The problem with this appeal is it now causes a whole new wave of uncertainty in the market. For the most part R-134a prices fell back to normal levels as 2014 went on. Now, I am concerned yet again about what the pricing is going to do. We may end up going through this whole debacle again with the price hitting the roof. All because North American companies are complaining about competition. If you are running low on 134a today I would definitely consider looking at buying a pallet or to now before the price jumps again.
I don’t know about you, but I am perfectly fine with the Chinese imports. It provides needed competition to the big companies here in the states and it also provides a better cost to the technicians as well as consumers. Here’s hoping pricing stays stable in 2015.