China's antidumping probe on S Korean SM puzzles market players

16 June 2017 05:05 Source:ICIS News

Port of Shenzhen in China 24 April

SINGAPORE (ICIS)--China will conduct an antidumping investigation on imports of styrene monomer (SM) from South Korea, a move that puzzled some market players, industry sources said on Friday.

Market participants in the South Korean SM sector have mostly adopted a neutral view on the probe. A copy of the notice dated 12 June was obtained by ICIS.

A major producer of SM in South Korea confirmed that the anti-dumping investigation notice has been served to the government. Details on duration of the probe were not immediately available.

South Korea is a major supplier of SM to China, shipping out volumes in excess of 1m tonnes/year of the chemical to its northeast Asian neighbor.

China is a net importer of SM, with total annual demand at nearly 10m tonnes, of which 3m-4m tonnes are covered by imports.

SM is a liquid chemical used to make resins like polystyrene (PS) and acrylonitrile-butadiene-styrene (ABS) as well as synthetic rubbers like styrene-butadiene-rubber (SBR) and styrene-butadiene-latex (SBL).

Market sources said that China’s antidumping investigation extends to SM from other sources as well.

“[We] heard they will do investigation for Taiwan and US origin cargoes also,” said a broker in South Korea.

Some players expect the probe to have limited market impact in the near term, as the investigation is expected to be long drawn.

Most players have adopted a wait-and-see stance in the meantime.

“Nothing [is] clear .. so, no idea [on its impact] so far,” said another Korea-based SM broker.

Major traders were taken by surprise by the Chinese government’s decision to probe Korean SM imports.

“Korean SM producers don't sell SM to China cheaper than domestic price … so it is unreasonable to impose anti-dumping duties,” said a major trading house in South Korea with an international presence.

Some market players said that China is unlikely to impose anti-dumping duties on South Korean SM at the end of the probe.

Focus article by Clive Ong

Picture: Port of Shenzhen in China (Source: REX/Shutterstock)

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By Clive Ong