After the sword of Damoclit in the Brazilian anti-dumping investigation was suspended for more than a year, Hailiang shares finally breathed a sigh of relief. The company announced yesterday that it received a notice on January 30 and the relevant anti-dumping investigation has been revoked. The company said that the Brazilian withdrawal of the anti-dumping investigation against the copper tube originating in China has a positive effect on the company's further expansion of the Brazilian copper tube market.

However, China’s export situation to Brazil is still grim. In 2012, Chinese products were frequently subjected to Brazilian anti-dumping investigations and became the hardest hit by Brazil's anti-dumping investigation. The impact on related industries and listed companies varies.

Involving multiple industries

Liquid epoxy resin, ceramic tableware, motorized passenger car tires, motorcycle tires, alkaline refractory materials, seamless carbon steel pipes, table fans, nylon threads... In 2012, Chinese products frequently shot in Brazil for anti-dumping.

It is reported that from September 6, 2011, the Brazilian Foreign Trade Commission has adopted a series of measures to restrict imports, including raising import tariffs on seven manufactured products and anti-dumping on a batch of imported products. Of the seven products that raise tariffs, five are imported from China, including ceramic tiles, bicycles, and split air conditioners. Some analysts pointed out that these trade protection measures are the main goal of Chinese products.

In 2012, as the economy continued to slow down, Brazil’s trade protection policy continued to increase, and anti-dumping investigations frequently pointed to Chinese products. Affected by this, in 2012, according to the statistics of the General Administration of Customs, China’s exports to Brazil totaled US$52.3 billion, down 0.2% year-on-year.

In this regard, Song Lifang, an expert on international anti-dumping issues at Renmin University of China, told China Securities Journal that China is Brazil's largest source of merchandise imports, and that China's exports are paying more and more attention to emerging countries and regions such as Brazil. Brazil frequently conducts anti-dumping investigations on Chinese products. It is very unfavorable for the export of Chinese products. "At the same time, Argentina, Mexico, Chile and other countries in Latin America have similar economic structures and similar industrial structures. Brazil's anti-dumping investigations on Chinese products may have a demonstration effect and cause a chain reaction."

At the same time, Song Lifang pointed out that the anti-dumping investigation is not conclusive. Whether the dumping is established or not still has the problem of calculation and identification. It will involve the game between China and Brazil and the game in Brazil. The impact of anti-dumping investigation on Chinese exports will depend on the specific Happening.

Electromechanical light industry is greatly affected

From the perspective of China’s export structure to Brazil, mechanical equipment, computer and communication technology, instrumentation, fabrics and products, optoelectronic technology, liquid crystal display panels, steel, transportation tools, automatic data processing equipment and components, and air conditioners are China's main exports to Brazil.

Song Lifang said that in the anti-dumping investigation in Brazil, China's electromechanical industry and light industry were the most affected. For the tire industry that was frequently subjected to Brazilian anti-dumping investigations in 2012, the tire industry related person told reporters that this matter has not been determined, and the relevant impact is not good, but the amount of China's exports of tires to Brazil is not very large.

Related listed companies reacted differently. On May 9, 2012, Jiuli Special Materials announced that the company is facing a Brazilian anti-dumping investigation, but the company's export value to Brazil is not large, and the investigation will not have a major impact on the company's operations. According to the data, from January 2007 to December 2011, the sales revenue of welded austenitic stainless steel pipe products exported to Brazil by Jiuli Special Materials was 2.58 million yuan, accounting for only 0.03% of the company's total operating income during the period.

In contrast, Xiuqiang, a Brazilian anti-dumping investigation in early 2013, said that home appliance glass is the company's third largest product, accounting for 11.67% of the revenue. As domestic competition intensified and sales of home appliances declined, the company gradually shifted its home appliance glass business overseas, with Brazil being one of the fastest growing markets. In 2011 and 2012, the company exported glass-related products for refrigeration equipment to Brazil, which accounted for approximately 3.6% and 6.8% of the company's total product sales revenue, respectively. The Brazilian anti-dumping investigation has caused the company's overseas expansion to suffer important setbacks. The specific impact still needs to wait for the results of the investigation, and will not affect the export of the products in the short term.

If Xiuqiang shares are faced with anti-dumping investigations, Yantai Wanhua is directly affected by the final anti-dumping ruling. In November 2012, Brazil made an anti-dumping final ruling on aggregated MDI imported from China. The high anti-dumping duties caused Chinese companies to worry.

It is reported that China's export of MDI to Brazil in 2010-2011 is about 70-90 million tons, of which Yantai Wanhua has a large share. The company's capacity expansion rate continues to increase, and it is expected that the capacity after expansion in 2014 will reach 1.8 million tons/year. The company plans to export a large part of its MDI products to Europe and the United States. Brazil, as the largest country in South America, will also become the main consumer of China's MDI.

Song Lifang said that due to the global economic downturn, Brazil's anti-dumping investigations on Chinese products in the future will only intensify. Although the trade between China and Brazil is highly complementary, to get rid of this situation of repeated anti-dumping investigations, the key is to change the export structure and improve the technical content of the products.