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Paint producers are pushing for a rethink of EU anti-dumping measures in opposition to Chinese language exports of a key uncooked materials, saying they may result in manufacturing facility closures and additional erosion of the area’s industrial base.
The bloc’s paint producers worry that tariffs of as much as 39.7 per cent on Chinese language exports of titanium dioxide (TiO2) would bankrupt smaller producers and push larger producers to shift manufacturing outdoors the bloc.
The provisional duties imposed in July have but to be confirmed by member states.
“This is a question of survival of these industries,” mentioned Nicolas Dujardin, chief working officer of Océinde, a family-owned French paint producer. “If all those investigations result in such high taxes in Europe, then there are going to be some bankruptcies.”
On account of an anti-dumping investigation launched final yr, the EU launched provisional measures, together with retroactive duties, that might be adjusted or confirmed subsequent January.
The talk places a highlight on the dilemma the EU faces in defending its industries from Chinese language competitors with out stoking inflation and producing greater prices for its personal producers.
Paula Salastie, the fourth-generation household proprietor of Finland’s Teknos, mentioned the paint sector would face a chronic downturn if shoppers had been hit by even greater costs, and that if Chinese language provide had been diverted elsewhere, uncooked materials shortages would trigger manufacturing outages.
“If we’re unable to sell as much as we were expecting, then we need to cut jobs. We are looking with a very keen eye,” she mentioned.
The duties meant its subsequent investments had been prone to go outdoors the bloc, she added.
The European Fee declined to remark however famous that paint producers had till October 21 to submit their views forward of a vote by member states.
Massive paint producers have additionally criticised the duties. Pedro Serret Salvat, president of Europe, Center East and Africa at PPG, the world’s second-largest paint firm, mentioned they’d “have a negative impact on the competitiveness” of its EU producers.
The obligation was “disproportionate” and the retroactive software was “unacceptable”, he added.
Paint producers have mentioned the tariffs can be acceptable if launched steadily together with elevated subsidies for native titanium dioxide manufacturing.
Nevertheless, western TiO2 producers have been badly hit by Chinese language competitors.
China’s manufacturing capability has ballooned from 1.4mn tonnes in 2008 to an estimated 6.1mn tonnes this yr, taking its share relative to international consumption from 29 per cent to 83 per cent, based on TZMI, an trade info supplier.
Roughly 1.1mn tonnes of non-Chinese language manufacturing has shut down since 2007, together with 5 vegetation within the EU, based on estimates by the European TiO2 Coalition, which made the grievance that led to the anti-dumping probe.
Tronox, a titanium dioxide producer that led the European TiO2 Coalition, mentioned its market was “a microcosm of the problem with Chinese overcapacity” that additionally affected sectors akin to batteries, photo voltaic panels and metal.
The corporate mentioned the utmost enhance in paint costs ensuing from the duties can be 5 per cent. Paint producers disputed this, saying the affect might be greater.
Defending the TiO2 trade mattered for the European aerospace trade because it was very important to producing titanium metallic utilized in plane, Tronox added.
“We can’t operate with capacity utilisation at 60 per cent,” mentioned Jeffrey Neuman, basic counsel of Tronox. Defending the trade by means of tariffs was “a fundamental industrial resilience question”, he added.
Some paint makers mentioned they anticipated the duties each to provide the UK a Brexit windfall and to spice up Turkish rivals, with each nations nonetheless capable of entry low-cost Chinese language pigments.
However Tom Bowtell, chief govt of the British Coatings Federation, mentioned any aggressive edge from decrease enter costs would in all probability be negated by the additional commerce prices incurred by leaving the EU.
Tronox mentioned it was involved that the UK might be flooded with Chinese language materials as exporters sought different markets outdoors the EU, particularly as Brazil and India had launched their very own anti-dumping investigations in opposition to TiO2 shipments from Asia’s largest economic system.
