ITC rules U.S. NBR industry not injured by imports

WASHINGTON—The International Trade Commission has determined that the U.S. industry "is not materially injured or threatened" by imports of acrylonitrile-butadiene rubber (NBR) from France, Mexico and South Korea.

In a unanimous 5-0 decision issued July 11, the ITC said that the U.S. Department of Commerce has determined that the NBR imported from those countries is "sold in the United States at less than fair value." As a result of the ITC's vote, Commerce will not issue antidumping orders on the NBR from France, Mexico and South Korea.

The ITC said apparent U.S. consumption of the NBR was $165.1 million, and that the imports in question accounted for $89.8 million.
The investigation was started in response to a petition filed in June 2021 by Zeon Chemicals L.P. that covered bale, slab, crumb, powder, pellet, particulate and liquid forms of NBR. NBR Latex and hydrogenated NBR (HNBR) were excluded from the petition.

NBR is used in a wide range of mechanical rubber goods, including hose, oil and gas components, wire and cable, rollers, O-rings and many others.

With those exclusions, Zeon said it was the only U.S. supplier of the NBR materials covered in the antidumping probe.

Zeon, in its petition, listed Kuhmo Petrochemical and LG Chemical Ltd. as known producers of the NBR in South Korea, Dynasol Group's INSA in Mexico and Arlanxeo in France. The firm alleged dumping margins of 72.27 percent in France, 97 percent in Mexico and 110.31 percent in South Korea.

Zeon also said that while imports of the NBR in question dropped 28.9 percent from 2018 to 2020, Zeon's domestic shipments fell by an even greater rate. Because of the alleged dumping actions, Zeon said capacity utilization was cut by nearly half and its operations went from a profitable situation to a negative balance sheet.

In August 2021, the ITC preliminarily ruled that there was a "reasonable indication" the U.S. industry was materially injured by the imports in question. It instructed the DOC to continue its investigations into the allegations.

But after the complete investigation, the ITC reversed its course and said there was no injury. The commission said its full report will be made public in August, and that will contain the views of the ITC and information developed during the investigations.

In a statement to Rubber News, Zeon said it appreciated the thoroughness of the investigation by the ITC and Commerce over the last year. The firm said because of other players abandoning NBR production in the U.S., it is the sole producer of the NBR covered under the probe, and that it remains committed to domestic projection.

"Global challenges with long supply chains have exposed weakness of relying strictly on imported goods," Zeon said. "Zeon strongly believes our three U.S. factories for synthetic rubber—Louisville, Ky.; Houston; and Hattiesburg, Miss.—are important for helping our customer base to have a robust, local source of supply."

Zeon specifically identified Negromex/Insa as operating from Mexico after closing a Uniroyal NBR factory in Ohio; Goodyear's closure of a Texas factory; and Lion Elastomers' closure of its Baton Rouge, La., NBR factory.

Lion Elastomers last year signaled plans to expand its emulsion-based facility in Port Neches, Texas, to manufacture NBR. At the time Lion said it was targeting the second half of 2022 to begin production.

Two attorneys from the Washington office of the Clark Hill P.L.C. law firm, which focuses on international trade, represented Industrias Negromex, S.A. de C.V. and Dynasol L.L.C. during the investigation. Negromex is the sole Mexican foreign manufacturer/exporter of NBR and Dynasol is its affiliated U.S. importer of synthetic rubber.

"I am pleased that the Commission was able to apply the facts to the law and render a considered determination," William Sjoberg told Rubber News in a statement. "I am even more pleased that the client will now be able to sell its NBR in the United States without the burden of unlawful antidumping duties."

Sjoberg and associate Maram Salaheldin said they worked with Negromex and Dynasol to ensure the investigation's record correctly reflected the companies' financial and economic information. Based on that information, they submitted arguments both in writing to the ITC and DOC in addition to appearing at an administrative hearing before the ITC.

"The key to turning around the vote at the Commission was the more robust administrative record that allowed us to conduct a more detailed economic analysis," Sjoberg said. "With that analysis, we were able to both highlight our client's affirmative information and, as important, to establish that any injury to the U.S. industry was not attributable to imports of NBR from the subject countries."