EPCA’18: Europe chem players ponder Brexit with the fear of the unknown

Source: ICIS News

2018/10/11

VIENNA (ICIS)--European chemical players continue to ponder over Brexit and the rising uncertainty amid the fear of the unknown, a focal point of this year’s European Petrochemical Association (EPCA) meeting.

Anti-dumping duties, tariffs and the impact on logistics were all key discussions points, with many trying to plan ahead to protect businesses where possible.

“Brexit is the main threat to UK businesses,” said one chemical player at the event.

Buyers’ across many markets are building stock, to try and manage any short-term logistical difficulties come March.

With talk of long delays at ports and uncertainties over tariffs, building stock is one way that buyers can try to manage the initial turbulence.

However, many buyers do not have the storage capacity to hold raw materials for longer periods, so this can only be seen as a short-term method.

Questions have been raised over existing anti-dumping duties, with many players expecting duties to be lifted for material to the UK, changing global trade flows.

In the European melamine market, there are duties against Chinese producers and so an increase in Chinese exports to the UK after the country leaves the European Union is expected.

Tariffs against the UK were also discussed, with some questioning what the impact will be on UK producers if they are subject to a 6.5% duty.

This could be offset by the exchange rate, keeping UK material attractive to the European market.

Much of this is dependent on the deal reached between the UK and the EU, determining duties and tariffs.

There was also continued talk of chemical companies moving head offices from the UK to Europe, with this the more attractive option after Brexit.

While some players consider this the main concern and threat to the industry for next year, this sentiment is not shared by all.

“I think it will be a storm in a tea cup, just like the ‘Millennium bug’. Planes didn’t fall out of the sky and the internet didn’t crash, there will be a business after Brexit," one player said.