EU fines four chemical giants with 260 million euros

On July 14, the European Commission announced that Orbia, Clariant, and Celanese were fined 260 million euros (approximately RMB 2.075 billion) for violating EU competition rules. The reason is that these three companies participated in cartels that conspired to lower the purchase price of ethylene. Westlake Chemical (Westlake) also participated in the cartel, and avoided a fine of approximately 190 million euros by disclosing the cartel to the European Commission.

The European Commission's investigation found that from December 2011 to March 2017, four chemical companies coordinated price negotiation strategies for ethylene sellers in the process of formulating the monthly contract price (MCP) of ethylene to influence the industry price reference and obtain MCP in its favor.

The four companies "participated in a cartel on the purchase price of ethylene in the market," colluding to buy ethylene at the lowest possible price. All four companies admitted to participating and agreed to a settlement, the European Commission said. The report stated that the cartel’s activities covered Belgium, France, Germany and the Netherlands.

Margrethe Vestager, vice president of the European Commission, said: “This cartel aims to manipulate the price of ethylene for companies to buy.” “The four companies in the cartel colluded and exchanged information about the purchase price. Information, this is illegal. The European Commission does not tolerate cartels of any kind. The EU’s antitrust rules not only prohibit cartels related to the coordination of sales prices, but also prohibit cartels related to the coordination of purchase prices.”

Clariant was fined 155.8 million euros, Celanese was fined 82.3 million euros, and Orbia was fined 22.3 million euros. According to the European Commission, all three companies received fines relief for cooperating with the investigation.

The European Commission has extended the deadline for paying fines by three months. The European Commission stated that it has taken into account the impact of the new crown pneumonia outbreak on various industries and the short-term liquidity problems that companies may have.

It is reported that in the ethylene procurement market, the price of ethylene fluctuates greatly. In order to reduce the risk of price fluctuations, an MCP formula is often adopted in the ethylene supply agreement, and MCP is an industry formed after separate negotiations between ethylene sellers and buyers. Price reference.