Final Findings issued in anti-dumping investigation on imports of Low-Density Polyethylene (LDPE) from Saudi Arabia, Singapore, Thailand and United States of America (31.03.2022)

Product description – Low-density polyethylene or high-pressure polyethylene, excluding:

  1. Compounded LDPE
  2. LDPE having density greater than 0.925 GM/cubic cm.

LDPE is a type of polyethylene, having a density range of 0.910–0.935 grams per cubic centimeter and is often referred to as the branched polyethylene. It is produced using high-pressure reactors, either through tubular or stirred autoclaves.

HS Codes – 3901

Uses – The product is used in applications requiring clarity, inertness, processing ease, sealability, moisture barriers, and good electrical properties. It is also used for producing trash bags, carrier bags, heavy duty bags, agricultural films, automatic packaging films and bags for food and sanitary articles, frozen food packaging, shrink and stretch hood film, surface protection film, lamination film, bubble wrap, adhesive tape backing films, foam for manufacture of mattresses etc.

Countries involved – Qatar, Saudi Arabia, Singapore, Thailand, United Arab Emirates and the United States of America.

Applicant – Chemicals and Petrochemicals Manufacturers Association

Domestic Industry – Reliance Industries Limited (“RIL”)

Date of Initiation – 23rd October 2020

Period of Investigation – 1st April 2019 – 30th June 2020 (15 months).

Injury Period – 2016-17,2017-18, 2018-19 and the period of investigation.

Margin and Proposed Duty –

Country Producers Dumping Margin (Range) Injury Margin (Range) Proposed Duty (US$/MT)
Saudi Arabia Rabigh Refining and Petrochemical Company 0-10% 10-20% 48.73
Sadara Chemical Company 0-10% 10-20% 48.73
Saudi Ethylene and Polyethylene Company 0-10% 10-20% 17.05
Non-cooperative / residual exporters 0-10% 10-20% 70.09
Singapore Non-cooperative / residual exporters 30-40% 10-20% 185.17
Thailand Thai Polyethylene Company Limited 20-30% 0-10% 89.14
PTT Global Chemical Public Company 10-20% 10-20% 134.47
Non-cooperative / residual exporters 40-50% 20-30% 216.76
USA Westlake Polymers LLC 20-30% Negative Nil
Westlake Longview Corporation 20-30% Negative Nil
Non-cooperative / residual exporters 40-50% 0-10% 74.27

Key Findings-

  1. A product type can be excluded only when the domestic industry is not producing and selling like article. In case a user chooses to import product from a particular supplier, it does not imply that such product type should be excluded.
  2. RIL is the sole producer of subject goods in India. It had placed orders for negligible volume of imports prior to the period of investigation, the same has been received during the period of investigation. Thus, RIL has been considered eligible to constitute domestic industry.
  3. There exists a particular market situation in Saudi Arabia since the price of inputs such as ethane, propane, butane and natural gas are fixed by the Government of Saudi Arabia through Saudi Aramco.
  4. The very fact that the prices of inputs is regulated in Saudi Arabia, even if the prices have been increased pursuant to regulations, means that the prices are not determined by free market forces and are controlled by the Government.
  5. Equistar Chemicals LP has not been allowed individual duties since the related entity involved in sales in its domestic market and the traders who were involved in exports to India have not participated in the investigation. The company also sold products produced by other producers who have not participated in the investigation.
  6. Al-Jubail Petrochemical Company and Saudi Kayan Petrochemical Company have not been allowed individual duty since Al-Jubail Petrochemical Company misrepresented in its response and the related exporter, ExxonMobil, did not participate in the investigation.
  7. Investigation against imports from Qatar and UAE have been terminated since there was no dumping from the said countries.
  8. Injury analysis is required to be undertaken in relation to production of the like article, or the narrowest range of products which includes domestic like article. Since data with regards to LDPE is available, there is no requirement to analyse the performance of polymers segment of RIL.
  9. Subject imports have caused injury to the domestic industry as they were undercutting the prices of the domestic industry. The subject imports have suppressed and depressed the prices of the domestic industry. Domestic industry was forced to sell at low prices to match the import prices, even though the cost of raw material namely, ethylene, increased. Due to dumped imports in India, the inventories have increased and the profits, cash profits and return on capital employed have declined over the injury period.
  10. The injury to the domestic industry is not due to capacity expansion and increase in depreciation and interest cost as the EBITDA per unit of the domestic industry has also declined over the injury period.
  11. The domestic industry was forced to undertake exports at lesser profits than domestic sales due to absence of orders in the domestic market. The adverse performance of the domestic industry in the export market, is a consequence of dumping in India.
  12. The existence of sole supplier does not imply that it will enjoy a monopoly post imposition of anti-dumping duty as the product can be imported from multiple sources. In case the operations of sole producer in India are hampered and become unviable, the country will become fully dependent on imports.
  13. The injury to the domestic industry is not due to use of a particular raw material, that is naptha, as the domestic industry has been using the same throughout the injury period, including in the period when it earned higher profits.
  14. LDPE forms an insignificant part of the cost of the final downstream product. Since the downstream industry is a pass-through industry, it will not be affected by imposition of anti-dumping duty.
  15. No conclusions on injury can be drawn based on the injury margin, as injury margin is only intended for imposition of duty based on lesser duty rule.
  16. Demand-supply gap is not a justification for dumping in India. While imposition of anti-dumping duty will not hamper the availability of the product, it will re-establish fair competition in India.
  17.  The number of products on which duty has been sought by a company cannot be considered for the decision concerning imposition of duty. Anti-dumping duty is recommended based on analysis of dumping, injury and causal link.