Representative Tom Reed (R-New York) received the...
At this point, many of you probably have learned that the U.S. Department of Commerce (DOC) has announced a significant preliminary increase of anti-dumping duties on steam-activated carbon imported from China. Domestic manufacturers can expect to see duties increase from 4.8% to as much as 14 to 228%.
Following the announcement, U.S. Customs and Border Protection will require importers to post a deposit in the amount of the duties.
Currently, the average duty is 72.52%, according to a Water Quality Association (WQA) report. The preliminary duties will be valid until April 2007 when the DOC is expected to make a final decision on whether to make the duties permanent.
The increase is a result of an anti-dumping petition filed in March 2006 by two of the largest U.S. producers of steam-activated carbon, Calgon Carbon Corp. and Norit Americas, Inc. The petition states that dumped imports from China are hurting the domestic carbon industry, with alleged anti-dumping margins of 132 to 731%.
After the announcement, John Stanik, Calgon Carbon’s president and chief executive officer stated, “We are very pleased with the preliminary tariffs … Over the coming months, we anticipate that prices for steam-activated carbon will move forward toward fair market prices that more accurately reflect both demand and manufacturing costs of our products.” As an importer of Chinese activated carbon, Calgon Carbon also will be evaluating its pricing policies as a result of the DOC decision, according to Stanik.
Not all carbon manufacturers see eye to eye on this issue. In a release from Carbon Resources, LLC, issued before the DOC announcement, the company stated, “Activated carbon products as an industry would generally experience a price escalation if Chinese carbons were eliminated from the scene by a high duty level. Domestic manufacturers could raise prices in many markets, and overall the carbon market would shrink.”
According to Carbon Resources, a high duty of 100% or more would effectively stop most imports of activated carbon from China and probably result in renewed interest by other countries to start manufacturing coal-based carbon and importing it to the U.S. So, how would all this impact the water treatment industry?
Carbon is frequently used in water filters and other products. Specifically, steam-activated carbon is used to remove tastes and odors from drinking water and reduce organic compounds in wastewater.
At the WQA Mid-Year Leadership Conference in Park City, Utah, Ken Schaeffer, president of Carbon Resources, discussed the issue at the Manufacturers/Suppliers Section Meeting, stating: “All activated carbon prices will go up significantly. Chinese carbon prices will rise because of the new duty levels, and non-Chinese carbons such as coconut-shell carbons and domestic coal carbons will go up because they are alternative products.”
According to the WQA, it is estimated that more than 80% of carbon currently exported to the U.S. will be affected. A higher duty level on Chinese activated carbon will have a ripple effect that could increase the cost of many U.S. products, and the water treatment industry is certainly not insured against price hikes. Small carbon businesses will probably get hit the hardest by the new duty levels and may have to look for other carbon sources. There is a good chance that municipalities will not be able to obtain carbon at the original prices they were quoted, and that could potentially trickle-down to the consumers.
One thing is certain: higher carbon prices are on the horizon, and our industry will be among those affected.