Japan, S Korea target India NBR market after China imposes ADDs

Author: Helen Yan


SINGAPORE (ICIS)--Acrylonitrile butadiene rubber (NBR) producers from Japan and South Korea are diverting their cargoes to the price-sensitive Indian market following the anti-dumping duties imposed on their product by the Chinese government.

-  NBR makers from Japan and South Korea  target Indian market

- Competition heats up in the price-sensitive Indian NBR market

-  NBR price upside capped by depreciation of Indian rupee

Deposit rates of 12.0% - 56.4% were applied to imports from Japan and South Korea starting 16 July when the Chinese Ministry of Commerce imposed the ADDs in an announcement.

The move followed initial investigation results indicating the two countries were dumping cargoes that is hurting China’s domestic industry.

The inflow of Japanese and Korean NBR cargoes into India has weighed on prices in India, given the competition between the two major Asian NBR makers to gain more market share in the Indian sub-continent.

Spot prices of NBR had remained flat at $2,550-2,650/tonne CFR India since 19 July, ICIS data showed.

“We understand the Japanese NBR makers are facing stiff competition in the Indian market and they have been quoting very competitive prices in a bid to gain more market share,” an Indian rubber distributor said.

Japan-origin NBR was heard available in India at around $2,800/tonne CFR India.

“Japan-origin NBR is usually quoted at a premium of $200/tonne to the general commodity grade due to its quality,” a Japanese NBR maker said.

“We are looking at other markets since the ADDs were imposed on imports into China. India is quite a big NBR market, but India is a price-sensitive market and there is resistance to price hike,” he added.

The depreciation of the Indian rupee against the US dollar had also weighed on spot appetite for import cargoes, which are usually transacted in US dollars.

The Indian rupee (Rs) on Tuesday hit an all-time low of Rs 70.08 per US dollar, down by over 7% in this year and one of the worst performing currencies in Asia.

“With the depreciation of the Indian rupee against the US dollar, it is more expensive to import cargoes into India and difficult for buyers to accept any price hike,” a NBR buyer said.

Further capping the upside potential is the availability of cheaper deep-sea material from Europe and Russia.

“Customers in India have more options to choose from due to the availability of cargoes from several sources. Indian customers can choose to buy from Europe or Russia, which are usually much cheaper than Asia-origin product,” another Indian rubber importer said.

Spot prices of Russian or European material were available at $2,400-2,500/tonne CFR India.

Anti-dumping duties imposed by the Chinese Ministry of Commerce

South Korean companies Deposit rates
Kumho Petrochemical 12.0%
LG Chem 15.0%
All others 37.3%
Japanese companies   Deposit rates
Zeon Corp 30.0%
JSR Corp 18.1%
All others 56.4%

Focus article by Helen Yan