Taiwan charges China suppliers of dumping
The Taiwan Cement Manufacturers’ Association (TCMA), formed by Taiwan`s top-eight cement producers, has filed a complaint with the Ministry of Finance (MOF) and the International Trade Commission (ITC) under the Ministry of Economic Affairs, charging China of dumping cement on the island and also suggesting the authorities levy anti-dumping taxes on cement from China.
Lower-priced China-produced cement began encroaching on the Taiwan market in the fourth quarter of 2009, forcing prices of Taiwan-produced cement to drop over 20% from the earlier NT$2,500 to the current NT$2,000 per ton, the biggest decline in five years. According to the statistics compiled by the TCMA, Taiwan imported in 2009 two million tons of cement, for a year-on-year growth of 300,000t, with imports cornering over 20% of the domestic cement market.
Unreasonably Cheap Import
Checking with China`s customs enabled the TCMA to confirm that China`s cement producers currently export cement to Taiwan at between US$35 and US$36 per ton FOB (free on board). Based on the customs statistics, the TCMA notes cement importers in Taiwan pay between NT$1,900 and NT$2,000 per ton for cement from China including overhead costs. As such, the TCMA is suspicious, assuming producers receive no subsidies, of how the importers can sell cement from China for under NT$2,000 per ton in Taiwan.
Furthermore, the power rationing measure imposed by China`s government is pushing up prices in that cement market. For instance, cement in Jiangsu Province is quoted at CNY330/t or approximately between US$49 and US$50/t. With China’s cement producers currently quoting export prices at between US$35 and US$36/t, obviously lower than domestic prices, the TCMA charges China`s cement producers of dumping in Taiwan. According to the investigation by the TCMA, China currently exports cement to Singapore and the rest of Asia for around US$40/t, clearly higher than the US$36 quoted for the Taiwan market.
Because of the underselling rivalry from China`s cement producers and exporters, the TCMA says most of Taiwan`s cement firms have seen their profitability from the core business plummet in the first half of this year. For instance, Taiwan`s top-two cement firms—Taiwan Cement Corp. and Asia Cement Corp.—saw a sharp drop in operating profit margin in the first half of this year. Taiwan Cement`s gross profit margin declined by two percentage points year-on-year to 6.22% in the first half, with operating net income totaling NT$140m , down a whopping 56% YoY. Asia Cement`s operating profit margin declined by some 14 percentage points to 6.38% in the first half from 20.27% earlier, with operating net income totaling NT$15m as compared to last year`s NT$726m. Other leading cement producers in Taiwan with plummeting profitability in the first half of this year include Universal Cement Corp., Chia Hsin Cement Corp., Lucky Cement Corp., Hsing Ta Cement Corp. and Southeast Cement Corp. Published under Cement News
