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. Last Updated: 07/27/2016

U.S Tariffs Target Caucasus Nitrate Firm

In a fresh blow to Russian exporters, the United States has made a preliminary decision to slap anti-dumpingtariffs of over 250 percent on Russian imports of ammonium nitrate.

U.S. trade officials decided Dec. 30 to impose sanctions of 264.59 percent on Russian imports of the chemical - used to make fertilizer - singling out producer Nevinnomyssky Azot, based in the North Caucasus, as the main offender.

"The department ... preliminarily determined that there is a reasonable basis to believe or suspect that critical circumstances exist for imports of solid fertilizer grade ammonium nitrate from Russia," the Commerce Department said in a statement faxed to The Moscow Times on Tuesday. "If the [department] continues to find critical circumstances in the final determination ... imports of this product will be liable for duties 90 days prior to the publication of the [department's] preliminary determination."

Commerce will make its recommendation March 14 and the U.S. government's International Trade Commission will also make one on April 28. Whatever decisions are reached will take effect May 5, the Commerce Department said.

Washington is acting on allegations by the Committee for Fair Ammonium Nitrate Trade, which includes producers Air Products & Chemicals, Inc., El Dorado Chemical Co. and La Roche Industries, Inc., that the Russians have been dumping ammonium nitrate on the U.S. market at below market value.

"The members of Cofant applaud the commission's preliminary affirmative decision," Cofant chairman George Porvaznik told the Chemical Market Reporter after the initial ruling was made last year. "We have been concerned about this situation for quite some time."

According to the Commerce Department's findings, Russia sold 227,992 tons of ammonium nitrate for $10.57 million ($46.36 a ton) over the first nine months of 1999. Over the same period in 1998, Russia sold 153,900 tons for $12.54 million ($81.48 a ton).

Russia's price cutting may be explained by the effects of ruble devaluation on producers' costs. For the first 7 1/2 months of 1998, the ruble traded at about 6 to the dollar, while Russia's currency was between 21 and 25 to the dollar during the first nine months of last year.

The Russian Trade Ministry plans to challenge the sanctions within 30 days, Interfax reported.

Russian producer Nevinnomyssky Azot has said it is ready to meet the U.S. challenge.

"This is not the first time that this situation has arisen, and it may go on for a number of years," company commercial director Alexander Moskalenko was quoted by Interfax as saying. Nevinnomyssky Azot is holding talks with lawyers to represent it in potential court proceedings, he said.

Official Russian exports of ammonium nitrate differ drastically from the U.S. findings. According to the government, Russia produces over 2 million tons of nitrate ammonia a year of which some 7 percent is exported to the Unites States, the newspaper Nezavisimaya Gazeta reported Tuesday. Exports typically totaled $10 million to $20 million last year, and Russia exported $12 million in 1998, the paper said.

The ammonium nitrate tariff comes at a time when U.S. producers are grappling over Russian imports. Just last June U.S. steel makers called for crippling anti-dumping tariffs to be imposed on cold-rolled, flat-rolled, carbon-quality steel. The Commerce Department opened an investigation into the allegations and was considering tariffs as high as 178 percent. But Russian authorities bowed to voluntary curbs and signed a preliminary agreement Dec. 10 with Washington to cap shipments at 340,000 metric tons per year.