It's Official! China Continues Anti-dumping Duties on Optical Fiber from the US and EU for the Next 5 Years
The Ministry of Commerce announced today that, based on the recommendation of the investigating authority, the Customs Tariff Commission of the State Council has decided to continue imposing anti-dumping duties on imported non-dispersion-shifted single-mode optical fiber originating from the United States and the European Union, effective from April 22, 2017, for a period of 5 years.
It is reported that the Ministry of Commerce issued Announcement No. 17 of 2011, deciding to impose anti-dumping duties on imported non-dispersion-shifted single-mode optical fiber originating from the United States and the European Union, with an implementation period of 5 years. On April 21, 2016, upon application by the domestic non-dispersion-shifted single-mode optical fiber industry, the investigating authority issued Announcement No. 15 of 2016, deciding to initiate an expiry review investigation from April 22, 2016, on the anti-dumping measures applicable to imported non-dispersion-shifted single-mode optical fiber originating from the United States and the European Union.
The investigating authority ruled that if the anti-dumping measures were terminated, the dumping of imported non-dispersion-shifted single-mode optical fiber originating from the United States and the European Union into China would likely continue or recur, and the injury caused to China's domestic industry would likely continue or recur. Based on this determination, China's anti-dumping measures on non-dispersion-shifted single-mode optical fiber imported from the US and the EU will continue to be enforced.
China's Market Under Siege from All Sides
Since China issued 3G licenses in 2009, the country has rapidly advanced broadband infrastructure construction. After the prolonged downturn following the optical communications bubble burst, the optical fiber industry witnessed a surge in market demand. After 2013, China proposed the "Broadband China Strategy," and in recent years has pushed operators to "increase speeds and reduce fees," making China the world's largest optical fiber consumer market.
The investigating authority found that from 2011 to 2015, China's demand for non-dispersion-shifted single-mode optical fiber accounted for 50.22%, 52.96%, 56.05%, 57.01%, and 61.48% of global market demand, respectively, rising by a cumulative 10 percentage points. For non-dispersion-shifted single-mode optical fiber producers in the US and the EU, the Chinese market holds strong appeal and remains an important target market.
Indeed, since China Mobile launched the world's largest centralized optical fiber procurement in 2015, the three major operators have increased their centralized fiber procurement from 2016 to 2017, with demand remaining robust. The industry also predicts that this wave of strong demand in China will not cool down as 4G construction nears completion. With network traffic continuing to grow at high speed, pressure on broadband infrastructure will only increase. As a core foundational product, optical fiber still enjoys broad market space.
The investigating authority found that during the implementation of anti-dumping measures, US optical fiber manufacturers had significant idle capacity, domestic consumption did not grow noticeably, and overcapacity was prominent. Exporting was an important sales model for US non-dispersion-shifted single-mode optical fiber, requiring the international market to absorb excess capacity. The EU's idle optical fiber capacity also remained consistently between 29% and 36% of total capacity.
In China's non-dispersion-shifted single-mode optical fiber market, there is no substantial difference between imported products or between imported and domestic products. Market competition is increasingly fierce, with price being the primary competitive tool. Therefore, US and EU optical fiber manufacturers have strong incentives to dump products into the Chinese market, and in fact, they continued to export large volumes to China even during the anti-dumping period. This is a "fat piece of meat" no one is willing to give up. According to C114, optical fiber manufacturers from South Korea and India also dumped products into China during this period and faced anti-dumping sanctions.
The ruling report shows that during the review investigation period, after adjusting for factors affecting price comparability such as sales conditions and trade levels, the export price of non-dispersion-shifted single-mode optical fiber originating from the US to China was USD 7.35 per fiber-core kilometer, with a normal value of USD 8.53 per fiber-core kilometer, constituting dumping. The export price of non-dispersion-shifted single-mode optical fiber originating from the EU to China was USD 7.85 per fiber-core kilometer, with a normal value of USD 10.41 per fiber-core kilometer, constituting dumping.
**A Boon for Domestic [Optical Fiber Manufacturers](
Undoubtedly, this anti-dumping ruling will be a major boon for domestic optical fiber manufacturers.
Currently, the domestic optical fiber industry is characterized by strong demand and tight capacity. Unit prices of optical fiber have stopped falling and begun to recover, and operators' centralized procurement is no longer purely price-driven. Domestic optical fiber manufacturers generally achieved good results in 2016. Looking ahead to 2017, domestic manufacturers are committed to expanding optical fiber preform and optical fiber capacity, seizing this wave of major network upgrade opportunities.
This anti-dumping measure can be said to have effectively safeguarded market fairness and justice, creating a prosperous and stable development environment for domestic broadband network development. If low-priced dumping of US and EU optical fiber were allowed to continue unchecked, it would undoubtedly disrupt the mature market system that has been established, causing significant impact on the sustainable development of domestic optical fiber manufacturers, thereby affecting their willingness to produce and expand capacity, and ultimately having a negative effect on the optical fiber supply for operators' large-scale broadband network construction.
For the same purpose, China has also imposed anti-dumping sanctions on optical fiber preforms originating from the US and Japan. As the "jewel in the crown" of the optical fiber industry, optical fiber preforms account for 70% of the industry's profits. In recent years, Chinese optical fiber manufacturers have been entering the preform R&D and manufacturing space, but their overall strength remains relatively weak. If subjected to unfair market competition from international optical fiber giants, they would find it difficult to achieve healthy development.
In August 2015, the Ministry of Commerce issued Announcement No. 25, determining that imported optical fiber preforms originating from Japan and the US were being dumped, that China's domestic industry was threatened with material injury, and that there was a causal relationship between the dumping and the threat of material injury, and decided to impose anti-dumping measures on the product.
Before 2011, domestic optical fiber manufacturers were generally weak and had little ability to withstand the blows of international optical fiber giants. By 2016, domestic optical fiber manufacturers had grown into a significant force in the industry, with production and sales volumes exceeding half of the global share, and continuously investing in R&D in high-end product areas to narrow the technology gap. Anti-dumping measures have played a considerable role in the prosperous development of the domestic optical fiber industry, and looking ahead, the prospects will be even brighter.
Source: Internet