WASHINGTON — Reversing traditional trade roles, China instituted antidumping duties this month on spandex yarn made in the U.S., Japan, Singapore, South Korea and Taiwan, to help stave off competition from low-priced goods.
The duties, ranging from zero to 61 percent depending on the firm, will be in effect until October 2011. They will have a muted impact on the overall market, though costs will rise for some producers, said Gregory Vas Nunes, president for Europe and the Americas at Hyosung Corp. The South Korea-based spandex firm does not ship much into China and thus dodged the antidumping duties.
“Most of the major players — ourselves, Invista — we already produce in China, so we have the local capacity to produce and sell,” said Vas Nunes.
Overall, there is excess spandex production capacity, though the market for higher-quality yarns remains tight, Vas Nunes noted.
“This will provide some of the Chinese producers a chance to sell outside of China,” he said.
Imported goods that are sold at below-market price compared with the price in the country where they are made or below the cost of production plus a reasonable profit are considered to be dumped. Antidumping laws are in place to protect domestic markets from unfair pricing practices, but free-market advocates claim dumping can be beneficial for consumers.
“If the market price of a McDonald’s hamburger is a $1.99 in the U.S. and you can only get $1.25 for it in Mexico, you’re dumping hamburgers in Mexico,” said Paul Brinkman, a partner at Alston & Bird, a Washington-based law firm.
Accordingly, it is not difficult for China to show dumping in most goods, since prices in the country are so low.
“China has been at the butt of antidumping cases for a long time, and China has recently joining the game of suing those who sued it,” said Brinkman. “They have the right to play the same games everybody else is playing.”
U.S. companies are being levied duties of 61 percent. Five specific producers from the other countries were levied with duties, including Opelontex Co. (12.9 percent), Invista (Singapore) Fibres (10.9 percent), TongKook Corp. (2.9 percent), Taekwang Industrial Co. (2.3 percent) and Formosa Asahi Spandex Co. (5.2 percent), according to a translation of the Chinese government document.
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The Fiber Price Sheet
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| Fiber |
Price on 10/30/06
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Price on 9/25/06
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Price on 10/24/05
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| Cotton |
52.35 cents
|
55.40 cents
|
51.76 cents
|
| Wool |
$2.70
|
$2.57
|
$2.28
|
| Polyester staple |
85 cents
|
85 cents
|
82 cents
|
| Polyester filament |
82 cents
|
82 cents
|
83 cents
|
| September Synthetic PPI |
115.1
|
114.9
|
112.7
|
| Crude Oil |
$60.75
|
$60.55
|
60.83
|
|
*The current cotton price is the September average on fiber being delivered to Southeastern region mills, according to Agricultural Marketing Services/USDA. The wool price is based on the average price for the week ended Oct. 27 of 11 different thicknesses of fiber, ranging from 15 microns to 30 microns, according to The Woolmark Co. Information on polyester pricing is provided by the consulting firm DeWitt & Co. The synthetic-fiber producer index, or PPI, is compiled by the Bureau of Labor Statistics and reflects the overall change in all synthetic-fiber prices. It is not a price in dollars but a measurement of how prices have changed since 1982, which had a PPI of 100. Oil prices reflect last week’s closing price on the New York Mercantile Exchange of future contracts for light, sweet crude oil to be delivered next month.
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