Shipments of subsidized ammonium sulfate fertilizer from China have harmed U.S. manufacturers and will be subject to duties, according to federal trade regulators.
The U.S. International Trade Commission has determined the U.S. industry is “materially injured” by the Chinese dumping of the fertilizer, which the U.S. Department of Commerce has found to be sold at “less than fair value.”
As a result, ammonium sulfate from China will be subject to countervailing duties of more than 200 percent.
Federal trade authorities began investigating imports of ammonium sulfate from China last year after a U.S. company, PCI Nitrogen, complained that the nation had increased shipments of the fertilizer to the U.S. by eightfold between 2013 and 2015.
Chinese manufacturers controlled about 12 percent of the U.S. market for ammonium sulfate in 2015, up from 2 percent two years earlier, which drove down domestic prices by roughly 25 percent, PCI Nitrogen claimed.
Ammonium sulfate is largely a byproduct of steel and nylon manufacturing, which are favored by the Chinese government with reduced taxes and tariffs, as well as preferential loan programs.
“Producers in China are expanding capacity to produce ammonium sulfate well beyond any forecasted increase in global demand,” according to PCI Nitrogen’s petition. “Much of this new capacity will be targeted at export markets and the U.S. market, in particular.”
The fertilizer is a niche nitrogren product in the U.S., where it’s used by farmers who also want to increase sulfur levels in their soil.
Prices for ammonium sulfate had dropped in the U.S. despite rising demand for the fertilizer, likely due to the glut of Chinese product flowing into country, according to a preliminary finding by U.S. ITC.
China exported roughly $700 million worth of ammonium sulfate in 2015, with less than one-tenth getting shipped to the U.S., where the fertilizer is manufactured in 11 states, the agency found.