BUSINESS
HAVING THE METTLE FOR SODIUM MARKETS
THEODORE GRAY
DuPont lodged a complaint with U.S. trade authorities in late 2007, alleging that French imports were being sold at less than fair market value relative to the cost of production. On Oct. 14, the U.S. Department of Commerce levied an antidumping duty of 66.6% on sodium imports from Métaux Spéciaux and DuPont France. An ongoing ITC investigation will COMPETE HEAD-TO-HEAD in sodium metal determine whether these imports injure ANN M. THAYER, C&EN HOUSTON the domestic sodium industry—that is to say, DuPont. DuPont declined to be interviewed by “SODIUM IS a small world,” says Frédéric C&EN, but the company has made its potitanium for military vehicles and aircraft, and sodium methylate catalysts for biodieChaminant, sales director of France’s sition clear in recent trade hearings and sel synthesis (C&EN, Aug. 25, page 20). Métaux Spéciaux SA, the world’s largest briefs. “Imports of sodium metal from sodium metal producer. Global demand In two or three years, Chaminant expects France have already had an adverse imthe sodium market to grow to between of 80,000 to 90,000 metric tons per year pact on DuPont’s production, shipments, 100,000 and 120,000 metric tons per year. is supplied entirely by MSSA, DuPont, and and sales,” testified Kenneth J. Hilk, three Chinese companies. But despite DuPont’s business and marketing what might appear to be a cozy marketmanager for reactive metals, in place, the two Western firms are accuslate 2007. DuPont has been unable ing each other of dumping sodium by to raise prices to offset raw mateselling it at cut-rate prices in a business rial, energy, and labor costs and as worth roughly $180 million. a result has seen its business lose Sodium metal is valued as a powermoney, he said. MSSA’s aggressive ful reducing agent, yet it is so highly actions since 2003, a lawyer for Dureactive that it doesn’t occur naturally Pont added, have led to a “precipiin its pure form. Instead, the soft tous decrease in DuPont’s market metal is made through the capital- and share.” energy-intensive electrolysis of molDuPont’s problems are its own, MSSA maintains, and are not due ten sodium chloride. to the French firm’s sales or pricing MSSA’s facility in the French Alps strategies. According to Chaminant, taps into hydroelectric power, as does DuPont uses much of its sodium DuPont’s in Niagara Falls, N.Y. MSSA’s production capacity is 27,000 metric output itself for making biodiesel tons, Chaminant says, and he esticatalysts or sells it at a contracted mates that DuPont’s is a few thousand tons price to Rohm and Haas, its largest Declining tax incentives, REACTIVE MARKET Sodium metal is a less. MSSA ships the hard-to-handle metal rising energy costs, and customer, for producing sodium powerful reducing in ingots, containers, and railcars, as well as quality concerns are borohydride and other chemicals. In agent used widely in by pipeline, whereas DuPont supplies bulk limiting Chinese sodium 2006, DuPont lost its second largest chemical production. exports, leaving MSSA and forms and imports ingots from China. customer, Syngenta, which changed DuPont as the main global In its heyday, sodium was made by sevits sodium-using paraquat herbicide eral companies that supplied producers— suppliers. MSSA also is the manufacturing process and moved including DuPont—of tetraethyl lead, the only producer of highly purified sodium used production to China. as a coolant for fast-breeder nuclear reactors. air-polluting gasoline additive that was Meanwhile, MSSA’s largest U.S. cusphased out in the U.S. in 1986. Sodium deMSSA exports most of its product. U.S. tomer is the polysilicon producer MEMC, which it serves from a loading facility built mand declined further in the 1990s, when imports of sodium from France have been in 2004 in Texas. MEMC has also been a titanium producers moved to cheaper rising, nearly doubling between 2005 and reducing agents as a response to increased 2006. The average import price in recent DuPont customer. competition from Russian titanium enteryears has been between 91 and 95 cents Because sodium plants can’t easily ing the market. But many specialty chemiper lb, according to the U.S. International be stopped or started, producers rely on contracts and careful, long-term supplycal and purified metal makers still use soTrade Commission (ITC), compared with about $1.06 per lb in 2004. and-demand planning with customers. dium as an intermediate in manufacturing. “We reached the bottom of the market about two years ago and are now on a growth curve,” Chaminant says. “New applications with rapid growth are developing.” Applications that call for sodium include polysilicon production for photovoltaics, new lower cost processes for making
The two Western firms accuse each other of dumping sodium by selling it at cut-rate prices.
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“Sodium isn’t a commodity, and this isn’t a do compete, MSSA’s prices are generally spot market,” Chaminant says. higher than DuPont’s. To illustrate this, For the ITC investigation, MSSA and he points to ITC data that show French DuPont have identified 71 U.S. purchasers imports underselling domestic product in just three of 12 quarters. MSSA believes Duof sodium. Of the 38 firms that replied to Pont’s contracted price to Rohm and Haas an ITC questionnaire, the top 10 accounted for 94% of reported purchases. About half has limited DuPont’s flexibility in raising of the 38 bought only from MSSA, with the prices and is also much lower than MSSA’s rest evenly divided between buying from prices to its own customers. DuPont or from both companies. Although Chaminant says he’d rather compete in the marketplace, MSSA has MSSA doesn’t deny that it has gained market share at DuPont’s expense, but it credits launched a regulatory counterattack. In quality, product form, and logistics rather August, at the company’s behest, the Eurothan price. Sodium is generally produced in different grades that U.S. IMPORTS vary by purity and the amount Volumes of sodium imported from France of residual calcium. Some cusjumped between 2005 and 2006 tomer feedback offered to ITC indicates that DuPont’s mateVOLUME VALUE AVERAGE (MILLION LB) ($ MILLIONS) PRICE PER LB rial causes operating and safety 2005 8.6 $7.8 $0.91 problems that don’t occur with 2006 15.1 13.8 0.92 MSSA’s Sopure grade, which has 2007 13.4 12.5 0.93 less than 200 ppm of calcium. DuPont argues, however, First-half 2007 5.8 5.6 0.96 that French and U.S. technical First-half 2008 7.9 7.6 0.95 grades of sodium, which are SOURCE: U.S. Department of Commerce about 99.8% pure and have less than or equal to 400 ppm of calcium, are perceived as interchangeable. pean Commission began two trade invesDuPont also contends that calcium buildup tigations of DuPont. “We believe DuPont and plugging can occur with commercialis selling sodium in Europe at lower than quality material regardless of the source. market prices and is receiving unfair subsidies for electricity,” Chaminant says. MSSA claims DuPont’s prices are 25–35% lower “WITH FEW rare exceptions, the purity level of sodium metal does not materithan those DuPont charges in the U.S. and that it gets subsidies from the State of New ally affect the end-use application,” Hilk testified. “Every U.S. customer who is now York of 30–40%. As a result, MSSA says it purchasing sodium metal from Métaux has, has lost up to 35% market share in Europe at some time in the past, purchased their during the past five years as DuPont exrequirements from DuPont.” ports from the U.S. have increased. DuPont characterizes the sodium busiThe EC won’t make its preliminary ness as a mature one in which price is the determination until April 2009, whereas single largest factor influencing purchasing ITC should reach a final decision by late November. In its preliminary decision in decisions. The company points out that 2007, ITC indicated that it lacked “reliable MSSA’s purer Sopure product, which has accounted for nearly 90% of MSSA’s growth in information either affirming or negating significant adverse price effects” and was the U.S. market, would be expected to comtherefore unable to draw a conclusion that mand a price premium but hasn’t. MSSA introduced its Sopure grade with there was no injury from French imports. Nevertheless, with ITC Chairman Daniel R. “a limited or no premium, so customers would try it out,” Chaminant says, with Pearson dissenting, the commission found that the industry in the U.S. is experiencthe result that the improved performance made it “the new standard” for customers. ing material injury and that it would move ahead to a final investigation. Beyond quality, some sodium purchasers U.S. trade officials, meanwhile, have told ITC that they purchase MSSA sodium to have a second supplier or to avoid buying been collecting the antidumping duty on MSSA imports. That additional cost has from DuPont because some of these purchasers compete in downstream markets been passed on to customers, Chaminant such as sodium methylate. says, “but we haven’t lost one customer Chaminant claims that where the firms due to the increased price.” ■ WWW.CE N-ONLI NE .ORG
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