Johannesburg - Brazil has slapped a 50-percent duty on South African imports of butyl acrylate, which petrochemical giant Sasol exports to the country, following sales to different markets at different prices.
Butyl acrylate is a chemical, which is used in the making of plastics. Sasol said the amount and revenue of the product from Brazil was near insignificant, constituting 0.1 percent in terms of Sasol base chemicals’ total product range.
“There is no impact on our production at all, as we sell butyl acrylate globally,” said Sasol’s head for media relations, Alex Anderson, in reaction to the imposition of the tariff.
However, industry insiders were concerned that the tariff imposed by Brazil might be the first pebble in an avalanche if other countries, including the US, to which Sasol sells the butyl acrylate, considered the price disparity an act of dumping.
“While Brazil only accounted for 6 percent of the export volume, countries like Belgium and the US bought a lot more of the product (35 percent and 20 percent of the volume, respectively).
They also bought it at lower prices than Brazil, raising the prospect of anti-dumping actions in those markets too,” said Donald Mackay of XA International Trade Advisors, which is a firm based in Centurion near Pretoria.
Mackay said Brazil had imposed final anti-dumping duties against South Africa of $650.42 (R8 923) per ton on butyl acrylate given that South Africa had been exporting this product at a free on board value of about $1 300 per ton in the last 12 months. This was around a 50 percent duty, “which I am guessing will shut off the Brazilian market completely”.
South Africa faced the largest anti-dumping duty of all the countries investigated.
It exported R53 million worth of butyl acrylate to Brazil in the period of August 2014 to July 2015, accounting for about 6 percent of the total volume exported in that period.
“The US is being particularly worrisome, as is is already facing an anti-dumping duty in Brazil and would thus be even more sensitive to competition in their home market.
“South Africa’s price to the US is 14 percent lower than it was to Brazil, so I would not be surprised to see a US anti-dumping action against South Africa in the near future,” Mackay said.
Anderson said Sasol prices all its chemical products at prevailing market prices in the respective country where they were sold, justifying the different prices charged at different markets.
BUSINESS REPORT