China chemicals will suffer more as trade war intensifies

BARCELONA (ICIS)–As the US-China trade war intensifies, China chemical markets will suffer further falls in margins and pricing, according to an ICIS consultant.

In a podcast interview (see foot of story) senior ICIS consultant, John Richardson, said that the ramping up of the trade war is hurting confidence amongst China’s domestic consumers as well as export-oriented manufacturers.

There is evidence that Chinese polyethylene (PE) converters are moving to other Asian markets such as Vietnam where they can set up production plants in just two months to avoid trade war tariffs, he added.

On 1 June China ramped up tariffs on $60bn of US imports from 5%-10% up to 5%-25%.

A higher tariff rate of 25% affects US imports of toluene, xylene, paraxylene, methanol, purified terephthalic acid (PTA), polystyrene, acrylonitrile-butadiene-styrene (ABS), polyvinyl chloride (PVC) , toluene di-isocyanate (TDI) and methylene diphenyl di-isocyanate (MDI), among others.

These chemicals were previously subject to tariffs of 10%. Click here to see the full list of chemicals.

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Richardson quotes figures from the ICIS Supply and Demand database.

Click here to view related stories and content on the ICIS US-China trade war topic page.

Podcast interview by Will Beacham