India acetone market bearish pre-elections; US ADD probe weighs

SINGAPORE (ICIS)–India’s acetone market outlook is subdued ahead of the country’s general elections, and amid abundant Asian supply due to ongoing US’ anti-dumping duty (ADD) investigation on imports from five origins, including Singapore and South Korea.

Domestic prices in India softened on 9 April to rupee (Rs) 31/kg ($447/tonne) ex-tank, market sources said.

In the week ended 3 April, domestic prices were assessed at Rs32-33/kg ex-tank Kandla, according to ICIS data.

Acetone can be used in solvent applications and in the manufacture of chemicals for the coatings, plastics, construction and automotive industries. (Source: Sipa/REX/Shutterstock)

Offtake rate was slow due to a cautious mood, as the country heads for its general elections, which will be from 11 April to 19 May. Prime Minister Narendra Modi is running for his second five-year term with his Bharatiya Janata Party (BJP).

“The economy slowed down in the last two years. The market needs to first know the government’s plans for the future,” an India-based trader said.

In a sweeping move in late 2016, the government voided more than 80% of the rupee notes in circulation – the 500- and 1,000-rupee notes; while in July 2017, a standardised national goods and services tax was introduced.

“The government had pushed for a Make-in-India initiative, and when domestic production rose, import prices fell, and many lost money,” an India-based importer said.

Within Asia, acetone supply was deemed plentiful, particularly after the US began its ADD probe on imports from Belgium, Singapore, South Korea, South Africa and Spain.

Saudi Arabia was originally named in the petition of US producers but was eventually dropped from the investigation.

India itself has extended its ADDs on acetone from the US, EU, South Africa and Singapore, for another five years, with immediate effect after completing a review from July 2018 to end-March 2019.

India antidumping duty (ADD) rates on acetone imports

Country	Company	Old ADD rates ($/tonne)	New ADD rates ($/tonne)
Europe	Any	277.85	277.85
Singapore	Any	147.1-158.1	56.91-121.04
South Africa	Any	141.95- 179.65	179.65
USA	Any	213.76	213.76
S Korea	Any	79.75	Pending
Taiwan	Formosa Chemicals and Fibre Corp	86.1	Pending
Taiwan	Taiwan Prosperity Chemical Corp	205.05	Pending
China	Changshu Chang Chun	0	0
Thailand	Any	0	0
Russia	Any	0	0

The ADD extension, however, has had no material impact on cargo availability to India.

Acetone imports from the EU, South Africa, Singapore and the US were first slapped with ADDs on May 2007, which were then extended in March 2014 for another five years.

Imports from South Korea were first levied ADDs in 2008, and then extended for five years starting February 2015; while those from Saudi Arabia and Taiwan were imposed with ADDs in April 2015.

Focus article by Angeline Soh

($1 = Rs69.33)