China EPDM spot buying picks up amid prelim ADDs on three origins

Author: Helen Yan

2020/10/28

SINGAPORE (ICIS)--China’s demand for ethylene propylene diene monomer (EPDM) has picked up momentum, with buyers seeking cargoes for up to January shipments following temporary levies imposed on imports from the US, EU and South Korea.

The temporary antidumping measure took effect on Wednesday.

Spot offers for November shipments have increased by about $50-100/tonne, depending on the origin and inventory levels of suppliers.

On 21 October, EPDM prices were assessed at $1,700/tonne CIF (cost, insurance and freight) China, up by $100/tonne week on week and about 8% higher since late September, ICIS data showed.

“We are raising our offers for November shipments due to strong demand and limited supplies,” a supplier said.

Chinese demand for EPDM is expected to strengthen in the months ahead, possibly up to the Lunar New Year in February 2021, market sources said.

“Demand is picking up and we are getting enquiries from Chinese customers for shipments till January next year, till before the Lunar New Year in February,” another supplier said.

The Lunar New Year falls on 12 February in 2021.

China has imposed ADD deposit rates of above 200% on EPDM cargoes coming from the US, while slapping double-digit rates on imports from the EU and South Korea, following an investigation.

China EPDM antidumping deposits effective 28 October 2020

Origin Company Rate
US Dow Chemical Co 222.0%
US Exxon Mobil Corp 214.9%
US Arlanxeo USA 219.8%
US Lion Copolymer Geismar 219.8%
US Others 222.0%
South Korea Kumho Polychem 12.5%
South Korea Lotte Versalis Elastomers 21.1%
South Korea Others 24.5%
EU Arlanxeo Netherlands BV 18.1%
EU ExxonMobil Chemical France 14.7%
EU Versalis SpA 16.5%
EU Others 31.7%

Source: China Ministry of Commerce

The Chinese commerce ministry determined that EPDM dumping from the three sources is causing injury to the domestic industry.

EPDM is used in the automotive and construction industries for various seals due to its excellent resistance to environmental factors such as ozone, ultraviolet (UV) and general weathering.

Typical applications are window and door seals, electrical gaskets, insulation cables, waterproofing sheets, water-resistant sealing parts and wire-coating.

Demand for EPDM is being bolstered by China’s recovering automotive industry, which is the world’s largest.

September vehicles sales in the country increased by 12.9% year on year and up 17.4% from August. The sales volume for the month at 2.57m units was the highest recorded so far in 2020.

Vehicle production in September posted a 14.1% year-on-year growth to 2.52m units, which represented a 19.1% increase from the previous month.

Focus article by Helen Yan

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