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Turkish players evaluate the imposed anti-dumping duty on Iran PS

by ChemOrbis Editorial Team -
  • 04/01/2019 (08:27)
Turkey’s Ministry of Economy enacted an anti-dumping duty of 11.3% on PS imports originating from Iran. The duty entered into force on December 31, 2018. Players were not caught by surprise as expectations had already called for an extra duty of of 11-14% .

Aschem requested an investigation in 2018

Aschem Petrokimya Sanayi A.S. filed a petition requesting a dumping investigation on PS imports from Iran in May last year. The local producer alleged that this origin was traded at less than fair value and hurt domestic sales, while the dumping margins calculated for imports from Iran were above negligible levels.

Imports of Iranian PS climbed to around 42,000 tons in 2017, up 90% from 22,000 tons in 2016 and 9,000 tons in 2015, according to ChemOrbis Import Statistics. Iran was Turkey’s second largest PS supplier in 2016-2017 following Belgium, meanwhile.

This news recalled Egyptian PS to minds

In January 2016, an anti-dumping duty of 11.3% was set on Egyptian PS due to similar reasons. Turkey imported around 44,000 tons of GPPS from Egypt during 2014 when compared to almost 28,000 tons in 2013. It ranked as the second top import source of Turkey in both years following Belgium. However, in 2015, GPPS imports from Egypt totaled nearly 9.000 tons, sending the country to the 7th place in the list following an anti-dumping investigation.

Initial responses from PS players are out

Most participants concurred that the news will possibly strengthen domestic PS producers’ stance. Some buyers voiced their concerns that traders may also lift their offers following the news. PS prices in Turkey followed a relentlessly bearish trend during the last 3 months.

A source from a Turkish producer commented, “We expect the decision to support both distributors and buyers since aggressive Iranian prices also hurt competition power of buyers who export their goods.”

A large trader opined, “The new duties would raise the costs for buyers who procure Iranian PS with inward processing certificate. For manufacturers, who sell their goods to the domestic market, offers from Iran would appear unworkable from now on. We have to wait to see whether or not Iranians will adjust their prices down in order not to lose their competitive power in Turkey.”

Players are at odds about near-term impacts

Some buyers do not project any major impact of the imposed duties on PS prices as they argue, “The decision was already expected and plentiful volumes were secured from Iran in the last couple of months.”

On the other side of the coin, traders expect supply constraints to emerge soon regardless of the state of end product markets. “HIPS availability has been tight for some time due to a limited number of supply sources, while traders do not have much en-route cargoes to arrive in January and February for GPPS. We heard that some distributors already raised their prices,” a player affirmed.

Will it trigger price hikes?

A converter noted, “The market may stabilize between lower European styrene contracts and possibly waning Iranian cargos. Slow end business would cap any possible hike attempts.”

On another note, disposable makers complained about their low profits blaming the contraction in their business in line with the bans on plastics usage. “Raw material costs will rise in the medium term, assuming a lack of Iranian sources, which may hurt our margins further,” one said.

What are the future destinations for Iranian PS?

Turkey has been a major outlet for Iranian PS during the last three years amid prosperous logistic conditions. Players started to discuss where Iranian PS cargos might be directed now that buying interest will fade in Turkey. “Iranian suppliers may start to focus on their exports to Europe, the Balkans, Central Asia and Pakistan more in the next months,” opined a trader.
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