China imposes ADD on adipic acid from the US, EU and S Korea

26 June 2009 06:42  [Source: ICIS news]

Adipic AcidBy Judith Wang

SHANGHAI (ICIS news)--China will levy a security deposit on adipic acid imports from the US, EU and South Korea as a temporary anti-dumping measure, the country’s Ministry of Commerce said on Friday.

Industry sources said the latest move showed China was using anti-dumping measures to protect the domestic industry in the midst of an economic downturn.

"Trade disputes will increase when the economy is not good. Anti-dumping is a common measure to deter imports and to protect [the] domestic industry," Yan Beina, an analyst from Shanghai-based brokerage house Guosen Securities said.

China’s Ministry of Commerce said in a preliminary announcement on Friday that it would impose a security deposit on adipic acid imports from 27 June, after a preliminary investigation showed that the United States, the European Union and South Korea "dumped" cargoes into the mainland.

"In the long run, the imports from the US, EU and Korea will definitely decrease. The import volume of imported adipic acid will likely drop to below 10,000 tonnes/month after the implementation of the antidumping duties," a trader based in Shanghai said adding that imported volumes usually exceed 12,000 tonnes/month.

The security deposit ratio ranged from 5.7-35.4, depending on the levels of "dumping" by different companies from these countries, the ministry said on its website.

A source from Rhodia Polyamide co in South Korea took solace in the fact that although the company was slapped with a 6% security deposits for all its China-bound exports, it was one of the lowest rates when compared to the other companies.

"But we [will] probably reduce exports to China in the future and focus on other markets in Asia, for example, Japan and Taiwan," the source added.

China launched anti-dumping investigations on adipic acid imports from the US, the European Union and South Korea on 10 November, 2008.

The measure would hinder imports to some extent, most adipic acid producers and traders said, but added that they were also waiting for the reaction from the market as the policy had just come out in the morning.

“However, we will consider to buy imports as long as the price is reasonable,” an end-user in eastern Zhejiang province said.

From late last year, China has frequently launched anti-dumping investigation on the imports of chemical products, including adipic acid, polyamide 6,6, nylon 6, and methanol.

“These moves also prove that China is gradually daring to voice its own views on the international stage amid the economic downturn. It is not a bad thing,” Yan of Guosen Securities said.

On Thursday, China also levied a security deposit on polyamide 6,6 imports from the US, Italy, Britain, France and Taiwan.

Adipic acid is primarily used in the production of nylon 6,6 and for manufacturing polyurethanes and polyester resins which are in turn used in automotive texiles and shoes. It’s feedstocks include benzene, cyclohexane and ammonia.

China’s adipic acid producers include Shandong Hongye Chemical, Shandong Haili and Liaoyang Petrochemical.

 

Company

Security Deposit Ratio

Korea

Rhodia Polyamide Co. Ltd.

6.0%

 

Asahi Kasei Chemicals Korea Co.

5.7%

 

All others

16.7%

European Union

RADICI CHIMICA S.p.A

11.3%

 

RADICI CHIMICA DEUTSHLAND GMBH

11.3%

 

BASF SE

18.1%

 

All Others

30.3%

US

Solutia Inc.

16.8%

 

All Others

35.4%

 

 

 

 

 

 

 

 

 

 

 

 

 Source: China's Ministry of Commerce

 With additional reporting by Yu Guo and Dolly Wu.

For more on adipic acid visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect


By: Judith Wang
+65 6780 4359



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