New AD/CV Duties Requested on Epoxy Resin From 5 Countries

A domestic producer coalition seeks the imposition of new antidumping duties and countervailing duties on epoxy resin from China, India, South Korea and Taiwan, as well as antidumping duties on epoxy resin from Thailand, it said in petitions filed with the Commerce Department and the International Trade Commission last week. Commerce will now decide whether to begin AD/CVD investigations, which could result in the imposition of permanent AD/CVD orders and the assessment of AD and CVD on importers.

The coalition, comprising Olin Corp. and Westlake Corp., says China, "thanks to help from government support and other market distortions," has "ramped up substantial additional capacity" for epichlorohydrin (ECH), a key ingredient of epoxy resins. China "also became a major supplier of ECH to producers" in India, South Korea, Taiwan and Thailand, and as a result, "all five subject countries increased their production of epoxy resins -- and began dumping those products into the United States and other markets."

Proposed Scope

The petition proposes the following scope for the investigations:

"The merchandise subject to these petitions are epoxy resins, also known as epoxide resins or polyepoxides, which are polymers or prepolymers containing epoxy groups. Epoxy resins range in physical form from low viscosity liquids to solids and are used in a wide range of applications such as coatings, paints, adhesives, composite materials, wind blade systems, insulating materials, civil engineering materials, and electronics. All epoxy resins are covered by the scope of these petitions irrespective of physical form, viscosity, grade, purity, molecular weight, or molecular structure and regardless of packaging.

"Epoxy resins may contain modifiers or additives, such as hardeners, curatives, colorants, pigments, diluents, solvents, thickeners, fillers, plasticizers, softeners, flame retardants, toughening agents, catalysts, Bisphenol F, and ultraviolet light inhibitors, so long as the modifier or additive has not chemically reacted so as to cure the epoxy resin or convert it into a different product no longer containing epoxy groups. Such epoxy resins with modifiers or additives are included in the scope where the epoxy resin component comprises at least 30 percent of the total weight of the product. The scope also includes blends of epoxy resins with different types of epoxy resins, with or without the inclusion of modifiers and additives, so long as the combined epoxy resin component comprises at least 30 percent of the total weight of the blend.

"Epoxy resins are characterized by the presence of reactive epoxy groups that allow them to be readily cross-linked at the time of use. Epoxy resins may be reacted (cross-linked) either with themselves or with a wide range of co-reactants, often referred to as hardeners, curatives, or curing agents. The cross-linking reaction is commonly referred to as curing. The epoxy resins and blends thereof covered by this scope have not been cured.

"Epoxy resins that enter as part of a system or kit with separately packaged coreactants, such as hardeners or curing agents, are within the scope. For such entries, both the epoxy resin and the co-reactant are covered by the scope of these petitions when entered together.

"The scope includes merchandise matching the above description that has been processed in a third country, including by commingling, diluting, introducing, or removing modifiers or additives, or performing any other processing that would not otherwise remove the merchandise from the scope of the investigations if performed in the subject country.

"The scope also includes epoxy resin that is commingled with epoxy resin from sources not subject to this investigation. Only the subject component of such commingled products is covered by the scope of this investigations.

"Excluded from the scope are phenoxy resins, which are polymers weighing more than 11,000 Daltons and containing no epoxy groups other than at the terminal ends of the molecule. Phenoxy resins’ Melt Flow Index ('MFI') at 200°C (392°F) range from 4 to 70 grams per 10 min and its Glass-Transition Temperatures ('Tg') range from 80 to 100°C (176 to 212°F).

"Excluded from the scope are certain paint and coating products, which are blends, mixtures, or other formulations of epoxy resin, curing agent, and pigment, in any form, packaged in one or more containers, wherein (1) the pigment represents a minimum of 10 percent of the total weight of the product, (2) the epoxy resin represents a maximum of 80 percent of the total weight of the product, and (3) the curing agent represents 5 to 40 percent of the total weight of the product.

"Excluded from the scope are preimpregnated fabrics or fibers, often referred to as 'pre-pregs,' which are composite materials consisting of fabrics or fibers (typically carbon or glass) impregnated with epoxy resin.

"This merchandise is currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) subheading 3907.30.0000. Subject merchandise may also be entered under subheadings 3907.29.0000, 3824.99.9397, 3214.10.0020, 2910.90.91, 2910.90.9000, 2910.90.2000, and 1518.00.4000. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope is dispositive."

Commerce Accepting Comments on Petition Support

The Commerce Department will accept comments on domestic industry support for the petitions to determine whether the petitions meet the dual requirements of support by domestic producers or workers accounting for (1) at least 25% of the total production of the domestic-like product and (2) more than 50% of the production of the domestic-like product produced by that portion of the industry expressing support for, or opposition to, the petition. If the petitions meet these requirements, among others, Commerce will initiate antidumping and countervailing duty investigations. Comments on industry support are due April 16.