India’s revised ADD structure to impact several PVC markets

08 April 2014 11:10 Source:ICIS News

(Adds details throughout)

SINGAPORE (ICIS)--The new structure of anti-dumping duties (ADDs) on polyvinyl chloride (PVC) imports into India is expected to impact the nature of PVC imports both into the country and elsewhere, market sources said on Tuesday.

“This new duty structure is likely to close the arbitrage for Chinese PVC imports into India, considering the high ADDs imposed on these,” according to an Indian PVC converter.

The Government of India announced anti-dumping duties (ADDs) on polyvinyl chloride (PVC) imports into the country, in the range of $9.47-189.99/tonne, according to an official document received by ICIS on Tuesday.

Chinese-origin carbide-based PVC cargoes often make their way into the Indian market at low prices, in times of high ethylene-based PVC prices from northeast Asia.

However, with the new ADD structure enforced, Chinese producers are likely to find it difficult to sell to India at competitive prices, owing to hefty ADDs imposed on these cargoes.

According to the document issued by the Department of Commerce in India, ADDs are now applicable on several exporters selling into the country following investigations initiated in October 2012 on ADD imposed against imports of PVC suspension grade originating in or exported from Taiwan, China PR, Indonesia, Japan, Korea RP, Malaysia, Thailand and the USA as well as the European Union and Mexico.

However, PVC imports from South Korean producers LG Chem and Hanwha Corporation are exempt from ADD payments.

ADDs on Chinese PVC cargoes exported from China or any other country other than China are subject to ADDs in the range of $91.27-147.96/tonne.

Taiwanese major Formosa Plastics Corporation exporting PVC from Taiwan and European Union is exempt from ADD payments, while all other Taiwanese PVC lots originating in Taiwan or any other country are subject to ADDs in the range of $9.47-61.25/tonne.

US producer Westlake Vinyl Corporation’s exports to India are subject to ADDs of $29.99/tonne, while Formosa Plastics Corporation USA’s lots exported by Tricon Dry Chemicals LLC will be charged ADDs at $31.22/tonne. All other US origin PVC lots will be charged ADDs at $115.54/tonne.

For the full table on ADDs imposed on various origin cargoes, please refer to final findings here.

ADDs levied on Ineos Vinyls Deutschland GmbH Germany, INEOS Sverige AB Sweden, INEOS ChlorVinyls Ltd, UK and INEOS ChlorVinyls Belgium NV are at $39.65/tonne, while all other cargoes produced in the European Union (EU) and exported out of the EU or elsewhere are subject to ADDs of $189.99/tonne.

Mexican PVC major Mexichem Resinas Vinílicas, S.A. de C.V’s exports to India would be subject to ADDs of $88.10/tonne, while all other Mexican cargoes originating in and/or exported out of Mexico would be subject to ADDs of $163.05/tonne.

Details on ADDs levied on European and Mexican imports are available here.

According to market sources, this new structure of ADDs proposed is additionally expected to impact nearby markets such as the Middle East.

“With cargoes from key northeast Asian producers exempt from ADDs in India, the Middle East could be pushed to look for supply from the US, as the northeast Asian producers would prefer to sell to India at higher prices,” a trader in the Middle East said.

The Middle East markets enjoyed sourcing northeast Asian cargoes at competitive prices, amid the uncertainty in the Indian PVC market in the last couple of months following the impending announcement on the new ADD structure.

Indian importers were hesitant to book cargoes without a clear idea on the ADDs, and the delay in the official announcement led buyers to defer purchases.

This saw some major northeast Asian producers move cargoes to the Middle East at competitive prices.

However, with India announcing zero ADDs on these northeast Asian cargoes, producers would be eager to sell to India at better prices.

Total PVC demand in India stood at 2.25m tonnes in 2013. Of this 1.25m tonnes are locally produced, while the rest is imported.

By Veena Pathare