Safeguard measures investigation initiated after surge in LPG steel cylinder imports 

THE Department of Trade and Industry (DTI) said it has found adequate evidence to consider imposing safeguard duties on imported liquefied petroleum gas (LPG) steel cylinders.

Trade Secretary Alfredo E. Pascual said in a notice posted on the DTI’s website dated March 29 that the department received an application from Ferrotech Steel Corp. to initiate a preliminary safeguard duties investigation, claiming that a surge in imports of LPG steel cylinders is harming domestic industry.  

“The DTI, acting under Section 6 of Republic Act 8800 or the Safeguard Measures Act, has made an evaluation of the application and found the existence of a prima facie case that will justify the initiation of a preliminary safeguard measures investigation on imports of LPG steel cylinders falling under ASEAN Harmonized Tariff Nomenclature Code 73.11 from various countries,” Mr. Pascual said.

According to the DTI, the period covered by the investigation on steel cylinder imports is between 2017 and 2021.  

Ferrotech said in its application that it is proposing ten years of safeguard measures.

“This is in order for us to be competitive with imported LPG cylinders to remain viable and for the continuity of operations,” the company said.

Citing the Bureau of Customs, the DTI said in a separate report that imports of such cylinders rose 24% to 15,942 metric tons (MT) in 2019 and 45% to 23,058 MT in 2020. Import volume dropped 13% to 19,990 MT in 2021.

It added that imported cylinders landed in the Philippines totaled 10,827 MT in the seven months to July 2022, of which 98.26% came from China. The seven-month total is equivalent to 54% of 2021 imports.

Between 2017 and 2021, the DTI said that China accounted for 98.9% of the 85,172 MT imported into the Philippines. The remainder came from Thailand, Vietnam, Japan, Australia, South Korea, and Mexico.

The Philippines imposes a 10% most-favored-nation tariff rate on imported LPG cylinders.

“Increased imports of LPG steel cylinders are the substantial cause of serious injury to the domestic industry in terms of declining market share, production, sales, capacity utilization, employment profitability and even losses, and existence of price depression and price undercutting,” the DTI said. 

“Total Philippine apparent consumption of LPG steel cylinders grew during the period of investigation from approximately 16,000 MT to 25,000 MT,” it added.

The DTI said that correspondingly, the share of domestic LPG steel cylinders declined from 30% in 2018 to 10% in 2021.

It added that domestic sales volume fell 32% in 2019, 36% in 2020, and 8% in 2021.

“The condition of competition showed that the market share of domestic products decreased during the period of investigation. Imports continued to displace the domestic market and continued to cut into the industry’s sales and market share from 30% in 2018 to 10% in 2021,” it added.

Ferrotech, based in Valenzuela City, sells steel cylinders to the domestic and Southeast Asian markets.  — Revin Mikhael D. Ochave