Manipulating prices? Dow, BASF, Covestro is facing litigation!

Recently, chemical manufacturing giants BASF, Covestro, Dow and other companies have been subjected to anti-monopoly class actions, suspected of plotting to close factories, restrict production, to reduce global supply, and increase the price of polyurethane raw materials.

CUE, a Pennsylvania-based manufacturer of polyurethane products, believes the plot, at least from 2015 until February of this year. CUE said, including Dow Chemical, Covestro, Huntsman, LANXESS, Mitsui Chemicals, Wanhua Chemistry, as well as corporate branches, are 'offending anti-monopoly criminals', in their past actions, facing civil and criminal cases. The manufacturer said that this time the companies coordinated for two isocyanate chemicals. A series of factory parking, and 'near synchronization' prices are raised.

CUE said: 'According to the news, the above price increase is too frequent, too close, is a purely parallel behavior, which must be the result of the co-ordinated coordination and agreement of the defendants. In addition, released on the same day The price increase announcement cannot be just a parallel act of imitation. CUE believes that this plot is secretly planned by the various trade groups to which these chemical companies belong. According to the contents of the 30-page indictment, 90% of the global isocyanate production share, competitors can not easily enter, polyurethane construction materials can not be easily replaced by non-isocyanate chemicals, making it easy to exchange the isocyanate market of individual companies, the operation of the defendants became possible .

CUE said, because in this market, it is easy to exchange between suppliers, which means that a manufacturer can't raise prices themselves. In other words, the price increase must be coordinated. The indictment says that the result is that the supply at that time The reduction began to work, starting from the beginning of 2016, 'the price has risen sharply'. One of the graphs shows the continuous and sharp rise in prices. In one year, the price of a product called diphenylmethane diisocyanate (MDI) rose by 25%. Another price called toluene diisocyanate (TDI) has risen by 35%.

CUE said in the indictment: 'According to the news, in early 2015, the defendants reached an agreement to rationalize and support the price of isocyanates by deliberately reducing supply. Throughout the period, the defendant agreed to implement, coordinate and rotate the chemistry. Factory parking, usually based on the 'force majeure' clause, allows them to cancel previous purchase orders. The reason for these factory parking is purely an excuse, such as a hypothetical shortage of raw materials or the need for 'maintenance'.

C.U.E. said: 'The indictment details the number of factory closures and shutdowns that occurred during the period, which drove down global supply and pushed up prices. Such parking times are not typical in the isocyanate industry and do not meet the standards.

CUE also stressed the importance of using a grand jury to investigate the fact that it is illegal in law. CUE said: 'The defendant is a recidivist who violated antitrust. In the past, he has communicated and operated prices in the same industry. Except Wanhua and Mitsui In addition, all defendants or their company's predecessors had received government investigations and civil litigation regarding the monopoly of polyester and polyether urea prices between 1995 and 2009. The complaint further states that the total amount of settlements resulting from these litigations exceeds One billion dollars.