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A look at India’s LDPE market on newly proposed antidumping duties

by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
  • 06/04/2022 (02:54)
The Indian government is expected to impose anti-dumping duties (ADD) on LDPE imports from Saudi Arabia, Singapore, Thailand and the US on the basis of recommendations from an investigation initiated about 17 months ago on a plea by domestic producers.

Anti-dumping duties of $17-70/ton on Saudi, $89-217/ton on Thai, $185/ton on Singapore and $74/ton on US imports are recommended by India’s Ministry of Commerce and Industry.

Market players expect the duties to be imposed in the next one to three months. “The Ministry of Commerce and Industry has recommended ADD to be imposed on LDPE imports from the four countries. Now the recommendations have to go to the Ministry of Finance and then to the cabinet, before we see their imposition,” said an Indian trader.

Meanwhile, Reliance is the only LDPE producer in India, with an annual output of about 500,000 tons.

Market players expect Saudi and Thai shipments of LDPE to be hit hard by this proposed anti-dumping duty.

50% of LDPE imports are of Mideast origin

According to data from Global Trade Tracker, India started to apply separate tariff codes for LDPE and LLDPE at the customs as of April 2020. Before this date, LDPE and LLDPE imports were traded under the same tariff code. Accordingly, India imported around 140,000 tons of LDPE in the second, third and fourth quarters of 2020.

Saudi Arabia was the major supplier, not surprisingly, having a 23% share in India’s overall LDPE imports. The US and Qatar followed with respective market shares of 16% and 15%. The UAE was the fourth largest supplier for LDPE imports of India, holding a 12% share.

When it comes to 2021, more than 210,000 tons of LDPE imports were reported in India. Saudi Arabia was dethroned upon the investigation initiated. The UAE moved up to the top of the list, bearing a share of 27% in overall LDPE imports, while Saudi Arabia followed with a 17% share and Qatar with 14%. The US moved down to fourth place with a 9% share.

Saudi LDPE shipments to India to be hit hard

“Middle East origin LDPE forms about 50% of the imports into India”, said a major market player. “Some of these imports from Saudi Arabia are often sold at levels much lower than the market. The government has chosen to target those imports. At the same time, there are other origins which are priced at mark-to-market levels and these have not been included in the current ADD,” he also explained.

LDPE import prices are currently being quoted in a $1700-1740/ton CIF west-coast India range, traders said.

ADD levels on Saudi-origin shipments

As per the recommendations, Saudi-origin exports from any country of LDPE produced by Saudi Ethylene and Polyethylene Company will likely be imposed ADD at $17.05/ton, while that by Sadara Chemical and Rabigh Refining and Petrochemical at $46.73/ton.

Shipments of other Saudi-origin LDPE from any other exporting country will be imposed $70.09/ton, with the same ADD imposed on shipments from Saudi Arabia from producers other than the three mentioned above.

Traders say re-exports of Saudi shipments from other Middle Eastern ports would likely be checked more strictly with the imposition of ADD on Saudi-origin material.

Imports from Singapore, Thailand to draw higher ADD

LDPE exports or re-exports from Singapore will likely be charged ADD of $185.17/ton at Indian ports, if the government approves the findings.

Thai shipments from Thai Polyethylene Company could draw $89.14/ton, while that from PTT Global will draw an ADD of $134.47/ton.Exports of other Thai producers from Thailand or re-exports from Thailand will attract ADD of $216.76/ton, according to the recommendations.

Some traders argue that lamination-grade LDPE from Thailand has been dumped into India, resulting in unfair competition for Indian operators.

Meanwhile, statistics suggest that around 6,000 tons of LDPE was imported from Singapore and 4,500 tons from Thailand in the last three quarters of 2020. In 2021, more than 12,000 tons of LDPE imports were reported from Singapore, while imports from Thailand followed with around 8,900 tons.

Some US companies form an exception

Imports from the US will attract a $74.27/ton ADD, except for shipments from Westlake Polymers LLC and Westlake Longview Corporation, which do not attract ADD.

As per the procedure of levying ADD in India, provisional duty is imposed on the basis of preliminary findings. The final findings are drawn on the basis of domestic industry and importers and then the final anti-dumping duty is levied on the exporting countries.

“We haven’t lately been seeing a lot of US shipments anyway, except for off-spec ones that were being brought into the country to be recycled into the market after processing,” said a Mumbai-based trader.

“Perhaps the government wants to regulate this … off-spec flow, or perhaps this is to prevent any arbitrage opportunities ahead bringing huge volumes from the US, harming the local markets,” he added.

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