Anti-Dumping cases on the rise

nylon 6.jpgAnti-dumping duties (ADDs) are on the rise, as countries seek to protect their own manufacturers.

The most publicised ADDs so far, of course, were those by the US on Chinese tyres in September. In retaliation, China hit companies such as BASF with duties on US produced nylon 6. Separately, India imposed an ADD on caustic soda.

Now, the whole issue is revving up again. Last week, Europe imposed ADDs on Chinese shoes. And, as ICIS news reported , China imposed ADDs on PTA imports from Korea and Thailand – both long-standing suppliers to the country. Yet it is only a month since the new free trade agreement between China and Asean came into force. Today, India has taken action against phenol imports from Japan and Thailand.

These ADDs are likely to be only the start of the story. As China’s new petchem capacity comes online, its demand for imports will greatly reduce. Equally, India is unlikely to want to see these volumes move into its domestic market, just as it is also expanding capacities. Whilst Western countries are unlikely to want to encourage imports, when their own unemployment is at high levels.

As John Richardson notes today, the combination of the global economic crisis and big increases in petchem/polymer capacity is a lethal cocktail. As a result, those without a strong domestic market will likely find it increasingly hard to move their traditional export volumes.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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