The Department of Trade and Industry (DTI) said increased imports have caused injury to the local petrochemical industry but did not find critical circumstances to warrant an imposition of provisional safeguard duty.
In two separate orders dated Sept. 17, 2021, DTI Secretary Ramon Lopez said after conducting a preliminary determination, and on the basis of the submissions of interested parties and pieces of evidence, the department finds that a causal link exists between increased imports of high-density polyethylene (HDPE) and linear low density polyethylene (LLDPE) pellets and granules and serious injury to the domestic industry.
HDPE and LLDPE are used in the production of various plastic products from common household items to industrial pipes.
“The existence of critical circumstances was not established to warrant the imposition of a provisional safeguard measure,” Lopez said.
Critical circumstances are the basis for imposing provisional safeguard duty and where a delay can cause serious or irreparable damage to the industry.
Lopez forwarded the cases to the Tariff Commission for the conduct of a formal investigation through a full blown hearing among stakeholders, taking into consideration the impact to downstream industries.
“A formal investigation by the Commission is wider in scope as it includes marathon public hearings which provides parties directly affected and interested parties the opportunity to be heard, present evidence, including the opportunity to respond to the presentations of other parties and submit their views,” Lopez said.
The period of investigation was 2015 to 2019.
DTI acted on a petition filed in 2020 by JG Summit Petrochemical Corp., the largest manufacturer of polyolefins and the first and only integrated manufacturer of polypropylene and PE in the country.
Based on DTI’s findings, imports of HDPE rose 73 percent in the past five years reaching their highest in 2019 at 107,530 metric tons (MT). Main sources of imports are Malaysia, Thailand and Singapore.
In 2019, JGSPC’s sales of HDPE dropped 12 percent to 120 MT and production fell 18 percent to 94 MT. HDPE capacity utilization fell 13 percent to 67 percent.
Imports of LLDPE rose 9 percent to 120,542 in 2019. Main sources are Saudi Arabia and Singapore.
Local production stood at 71 MT in 2019 when capacity utilization hit its lowest at 67 percent. – Irma Isip
