December sees latest Chinese DAP/MAP export halt
CF Industries has filed petitions with the US Department of Commerce and the US International Trade Commission (ITC) requesting the initiation of antidumping and countervailing duty investigations on imports of UAN from Russian and Trinidad and Tobago.
The ITC has now officially listed an active import injury investigation on its website (Inv. No. 701-TA-668-669 and 731-TA-1565-1566). The notice states that the investigation is in the preliminary phase with this due to end on the 23 August.
In a statement, CF Industries, the largest producer of UAN in the USA, stated that it had requested the investigations “due to the harm the domestic UAN industry has experienced from dumped and unfairly subsidized UAN imports from Russia and Trinidad”. The statement notes that “CF Industries filed its petitions under United States antidumping and countervailing duty laws, which authorize Commerce to level the playing field for domestic industries injured by foreign imports that are dumped and unfairly subsidized.”
As outlined in the CF Industries statement, if affirmative determinations are made by Commerce and the ITC, then Commerce can impose duties equal to the level of dumping and unfair subsidies.
The Department of Commerce will now decide whether to initiate investigations to determine the extent of dumping and unfair subsidies associated with imports from Russia and Trinidad and Tobago. The ITC will initiate a concurrent investigation to determine whether such imports materially injure the U.S. industry. CF Industries states that it intends to participate actively in proceedings before both agencies.
Commenting, Tony Will, president and chief executive officer of CF Industries Holdings said:
“For too long, UAN producers in the United States, who are among the most efficient in the world, have competed on an uneven playing field due to dumped and unfairly subsidized imports from Russia and Trinidad. The duties we are seeking will restore fairness to our highly competitive industry and help ensure that American UAN producers remain a reliable source of fertilizers for American farmers for years to come.”
The full statement from CF Industries can be found here.
Affected offshore suppliers provided 2m. tonnes of UAN in 2020
The USA imported 2.4m. tonnes of UAN in 2020 with Russia supplying 1.04m. tonnes (43%) and Trinidad 0.9m. tonnes (38%). The balance was mainly overland from Canada. Offshore imports in 2019 were slightly higher, around 2.4m. tonnes.
In the first four months of 2021 total imports were 844,000t comprising 315,000t from Russia (53%) and 286,000t from Trinidad (34%). Several cargoes from Russia have already been lined up for Q3 arrival.
If the action is successful, and depending on the level of duties, more Russian and Caribbean product will likely need to be targeted at Europe and, on a smaller scale, Latin America. However, finding a home for 2m. tonnes of UAN combined outside the USA will not be easy and some movement to the Gulf/east coast may be necessary unless, given a positive response to the complaint, duties are punitive.
Market yet to react as offseason begins
The market has yet to react with the news coming as the US market transitions into the offseason. Average UAN prices year to date have been over $260ps ton fob Nola, with Nola barge values hitting $320ps ton fob Nola and above earlier this year. This stands in stark contrast to 2020 which saw an average price for the first half of the year of $131ps ton fob Nola. UAN values this year have been bolstered by strong international nitrogen markets, as well as firm grain prices and the impact of planned and unplanned domestic production outages.
The market is awaiting the release of summer fill pricing from the company, the largest domestic producer of UAN. Some business has been taking place prior to this with Nutrien issuing pricing for July-September movement at several locations at $280ps ton fob Nola equivalent. The company intended to close the order book at the latest today (1 July). Offshore tonnes have been sold at lower levels at both the terminals and on a barge basis. While any investigation, if announced by the ITC and Department of Commerce, may take time, the prospect of duties on supply from Russia and Trinidad clearly aids domestic suppliers at the negotiating table.
Further news and analysis is available via the Profercy Nitrogen Service.
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