08 March 2012 17:22 [Source: ICIS news]
By Chow Bee Lin and Michelle Klump
SINGAPORE (ICIS)--Long shipment time and logistics issues are widely seen to be the major hindrances in the polyolefin trade flow between South Korea and the US, and hence bilateral trades of these petrochemicals are not expected to increase significantly, even in a duty-free environment.
Delivery from a resin plant to a plastic processor’s warehouse is estimated to take about two months, either from South Korea to the US or vice versa. Most buyers are unwilling to bear the price risks of such long shipment time, particularly when prices are volatile, and South Korean producers export plastic resins in 25-kg bags, but US importers prefer bulk shipments.
Despite the barriers, South Korean polypropylene (PP) producers are likely to try to tap the ?xml:namespace>
Under the FTA, due to be effective on 15 March, hompolymer PP exports from
US import duty on South Korean block copolymer PP will be further reduced to 2.1% in 2013, before being removed in 2014, industry sources said.
Duty-free exports to the US look like an attractive option for South Korean PP producers because it is increasingly difficult for them to maintain their foothold in China, its current key export destination, as a result of intense competition from the domestic producers and the Middle East suppliers.
That was a small quantity compared to the 1.2m tonnes of PP South
The discovery of large shale gas reserves in the
History has shown that when there is import demand in the US, South Korean PP producers are capable of responding to it quickly - South Korea exported significant volumes of PP and polyethylene to the US when plants there were forced to shut down because of Hurricane Katrina in 2005.
“Some of our plants have the facility to do bulk packing,” a PP producer said.
Another producer said: “It doesn’t cost much to install bulk packaging facility at our plants.”
Read John Richardson and Malini Hariharan's Asian Chemical Connections blog
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