Brazilian Tax Exemption for China-Related Polyester Filament Yarn Extended
- 23-Aug-2023 5:14 PM
- Journalist: Robert Hume
On August 18, 2023, the Executive Committee of Brazil's Ministry of Development, Industry, Trade, and Services, responsible for foreign trade matters, chose to extend the suspension of imposing final anti-dumping duties on Polyester Filament Yarns (PFY) that are not sold in retail (except sewing thread). This measure aimed to ensure fairness in pricing and support Brazilian businesses. However, recent Chinese PFY prices have fluctuated since the beginning of this month, with values decreasing during the week of August 18, 2023. The current Chinese PFY 150D/48F export price is traded at USD 1148/MT FOB Shanghai.
Before this, in March 2021, a trade association in Brazil initiated an investigation into these specific types of PFY originating from China and India. Their concern was whether these yarns were being sold at prices lower than usual in Brazil, potentially harming local Brazilian businesses that produce similar products.
By September 2021, the trade association discovered that these yarns were indeed being sold at significantly reduced prices within Brazil, causing difficulties for local enterprises engaged in similar production. Consequently, in August 2022, a different group in Brazil that handles trade stuff decided to include additional tariffs on these PFY originating from China and India. This levy aimed to establish equilibrium in pricing and provided support to Brazilian businesses. The initial plan was for this tariff to remain in effect for a duration of five years.
However, Brazil's economic growth in July seemed to be primarily influenced by its anti-dumping policy. As per the anti-dumping ruling announced in the previous year, anti-dumping duties were set to be enforced starting from August 22, 2023. Consequently, some customers rushed to restock their goods in July. Nevertheless, it was revealed on August 18, 2023, that Brazil has once again delayed the implementation of its anti-dumping measures. The anticipated impact on the market because of this postponement is predicted to be minimal.
Meanwhile, in China, polyester product exports continue to surge in 2023, particularly for fibers like PFY and PSF, showing a higher growth rate than expected. From January to June 2023, the export quantity of PFY and PSF rose by 27% and 25%, respectively, compared to the previous year.
Therefore, ChemAnalyst forecasts that the export demand for PFY might continue to increase from the Brazilian market, owing to a cost advantage in the global competition due to their extensive industrial supply chain. Additionally, the decline in sea freight rates throughout this year is also contributing to the favorable conditions for exporting PFY.