China’s Sinopec seeks antidumping probe on Iranian LDPE

06 September 2012 05:09  [Source: ICIS news]

By Chow Bee Lin

Port of Qingdao in Shandong, east ChinaSINGAPORE (ICIS)--Chinese petrochemical giant Sinopec is seeking an antidumping investigation on low density polyethylene (LDPE) imports from Iran, a company source said on Thursday.

The state-owned firm has lodged a complaint with China’s Ministry of Commerce on the inflow of Iranian material into the country.

“Sinopec has been in talks with the ministry about the possibility of carrying out an antidumping investigation on Iran’s LDPE export to China,” the Sinopec source said.

Sinopec has been collating information to support its antidumping complaint against Iranian LDPE export to China, a major Chinese trader said.

But establishing an antidumping case may turn out difficult because Iranian LDPE export prices to China are higher than production costs in the Middle Eastern country, another Chinese trader said.

If China launched the antidumping probe, Iranian LDPE producers may get hurt because the northeast Asian country is one of the few remaining markets after international economic and financial sanctions were imposed on Iran, a third Chinese trader said.

Nonetheless, Iran
is expected to continue exporting LDPE into China, even with an antidumping duty, as it can afford to sell at lower prices because of its low-cost feedstocks natural gas and ethylene, the trader said.

China is the largest importer of Iranian LDPE with the imports facilitated by Chinese traders who either buy directly from producers or traders based in the Middle East and northeast Asia.

In January-July 2012, China imported 214,567 tonnes of LDPE from Iran, up 39.15% year on year, according to China Customs data.

Some importers in India are concerned that if China imposes an anti-dumping duty on Iranian LDPE, Iranian producers might divert all their cargoes to India.

India, which is the second largest PE resins consumer in Asia, may then be exposed to a sudden surge in Iranian imports, creating a supply overhang that will weigh on prices, Indian importers said.

“Not many players [in India] are keen to import Iranian cargoes for now. But again, if these Iranian cargoes are much more cheaply priced than [cargoes of] other origins, we will still buy,” a Mumbai-based trader said.

An Iran-based LDPE producer said that a Chinese antidumping duty on the product may in turn affect China’s exports of catalyst to the Middle Eastern country.

Iranian PE producers have been importing catalyst from China as the US-led economic and financial sanctions on Iran had made it very difficult for Iran to import catalyst from their regular suppliers in Europe, he added.

Additional reporting by Amy Yu and Ong Sheau Ling

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Chow Bee Lin
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