China slaps duties on polyester film

17 January 2000 00:00  [Source: ACN]

China has imposed provisional antidumping duties of up to 72% on imports of polyester film from South Korea. This is the first time the government has levied antidumping duties on imports of a chemical product, and the second time that it has announced antidumping duties on any product.

The move marks a significant victory for the six Chinese producers who first filed their antidumping petition in April 1999 (ACN 19 July, p5). These producers alleged that the South Korean imports led to a dramatic fall in domestic prices and market share and forced three of them to halt operations.

South Korean producers, however, have reacted angrily against the decision. Several producers confirmed they are now seeking legal counsel and plan to appeal against the decision. Under Chinese regulations, they have until 3 February to file their appeal.

According to the official statement, all South Korean imports except those from SKC Corp will face a 72% antidumping duty. This is in addition to the close to 70% import duty already imposed on polyester film imports. Imports from SKC Corp will be levied a 21% antidumping duty.

Sources from several South Korean producers said that the antidumping duty would make it virtually impossible for them to export to China, which currently accounts for the majority of total South Korean exports of B-grade polyester film.

And while India is also a major market for B-grade polyester film, some South Korean producers said they found it difficult at times to meet specific demands by Indian buyers, and therefore do not expect to increase their exports to India significantly.

A source representing a Chinese polyester film producer, however, said Chinese producers believe some South Korean producers may attempt to maintain current levels of exports to China. 'South Korean producers may attempt to avoid the antidumping duties by exporting via Hong Kong,' he said.

The antidumping duty follows close to seven months of investigations by Chinese authorities. These authorities reported that in Q1-Q3 1998, direct exports from South Korea to China was 9127 tonne, up 328% for the whole of 1997. Chinese officials also believe that the bulk of the rise in imports via Hong Kong are from South Korea, and said such imports in Q1-Q3 1998 were an additional 7518 tonne.

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