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August 24, 2017 02:00 AM

ExxonMobil buys East West facility, Mexico launches ESBR dumping investigation

Miles Moore
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    BATON ROUGE, La.—Seven months after joining Lion Elastomers L.L.C. in petitioning the International Trade Commission for emulsion styrene-butadiene rubber dumping relief, East West Copolymer L.L.C. filed for bankruptcy and shuttered its doors.

    Things have moved quickly since.

    The former East West facility sold twice since its closure in March, first to Lion and then to ExxonMobil Corp., each time for a reported purchase price of $5.6 million.

    ExxonMobil confirmed the purchase of the 94-acre East West property adjacent to its chemical plant in Baton Rouge, but said it has no immediate plans for reopening the former ESBR facility. A spokesman for ExxonMobil noted that the additional acreage provides unique synergies with the firm's integrated complex and helps position the company for potential future investments.

    Jesse Zeringue, Lion's CEO and president, could not be reached for comment.

    Meanwhile, the ITC ruled in favor of U.S. ESBR producers after finding evidence of material injury to the industry caused by ESBR imports from Mexico and three other countries.

    The Mexican Ministry of Economy announced Aug. 10 that it was initiating an investigation of alleged ESBR dumping in the Mexican market by producers from South Korea, Poland, Japan and the U.S.

    Korea and Poland were two of the four countries—along with Brazil and Mexico—named in the U.S. investigation begun in August 2016.

    On July 11, the U.S. Department of Commerce assigned a final dumping margin of 19.52 percent against Mexican ESBR imports. The other countries in the investigation were assigned antidumping duties as follows:

    • Brazil, 19.61 percent;
    • Korea, 9.66 percent for LG Chem Ltd., 44.3 percent for Daewoo International Corp. and Kumho Petrochemical Co. Ltd.; and
    • Poland, 25.43 percent.

    U.S. Customs and Border Protection already has begun collecting cash deposits in these amounts from ESBR importers from the four countries.

    On Aug. 3, the ITC voted 2-2 in a final determination of material injury to the U.S. ESBR industry caused by import sales of less than fair value. A tie vote in the ITC signifies an affirmative vote.

    Industrias Negromex, Mexico's only ESBR producer, filed its antidumping petition April 11, with the Ministry of Economy. Negromex is part of Dynasol Group, a joint venture involving Spain's Repsol and Mexico's KUO Group.

    According to Negromex, the scope of the investigation refers to SBR rubbers that have 22.5 to 62.5 percent butadiene by weight.

    These are classified within the 1500 series (non-extended cold polymerized polymers), 1700 (extended cold polymers with oil), and 1900 (high styrene) as defined by the numerical system of the International Institute of Synthetic Rubber Producers, the company said.

    The scope of the investigation could be extended to include ESBR imports from other countries, Negromex said. The Ministry of Economy has not set any preliminary determination or hearing dates, it said.

    Negromex's petition for dumping relief was not motivated by the U.S. investigation, according to the company.

    "Both investigations are completely independent," a company spokeswoman said. "We have been tracing imports that are traded at less than fair value for several years now in Mexico, especially after the expiration of dumping duties that Mexico had against Brazil."

    There have been ESBR dumping investigations in India and Brazil as well as the U.S., the Negromex spokeswoman said.

    "The only difference between all these cases is that the ESBR trade changes in the U.S. were a result in production disruptions and changes in ownership that caused uncertainty in the market, and this, we think, was reflected in the split vote of the ITC," she said.

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