South Korea Plans to Continue Imposing Anti-Dumping Duties on Chinese PET Resin

Background of the Investigation

Previously, on November 20, 2023, South Korean company TK Chemical submitted a request to the Trade Commission to initiate an anti-dumping investigation against four Chinese manufacturers: Hainan Yisheng Petrochemical Co., Ltd., Yisheng Dahua Petrochemical Co., Ltd., China Resources Chemical Innovative Materials Co., Ltd., and Zhuhai China Resources Chemical Innovative Materials Co., Ltd. 

The investigation formally began on January 12, 2024, and on May 30, the Trade Commission issued a positive preliminary ruling recommending temporary anti-dumping duties. On July 30, the South Korean Ministry of Finance announced the imposition of temporary anti-dumping duties for a period of four months on related products, which include terephthalic acid (TPA), ethylene glycol (MEG) with a intrinsic viscosity of 78 mL/g or higher, and recycled PET resin. The relevant Korean tariff code is 3907.61.0000.

For the involved Chinese manufacturers, Hainan Yisheng Petrochemical Co., Ltd. and Yisheng Dahua Petrochemical Co., Ltd., along with their affiliates and exporters, the duty rate is set at 6.62%. For China Resources Chemical Innovative Materials Co., Ltd. and Zhuhai China Resources Chemical Innovative Materials Co., Ltd., the rate is 7.83%, while other suppliers face a rate of 7.12%.

Impact of Anti-Dumping Policies  

Market analysts suggest that these anti-dumping policies and investigations will indeed have an impact on China's PET bottle grade exports, primarily affecting export volumes and market distribution. 

For instance, since December 28, 2020, India has implemented anti-dumping duties on Chinese PET resin bottle grade, but the disparity in duty rates among companies has led to uneven effects. Additionally, a sharp decline in India's imports of PTA from China in 2023 significantly impacted its polyester production. These factors have allowed Chinese bottle flakes to enter the Indian market at competitive prices, leading to a notable increase in exports to India. In 2023, the top five export destinations for Chinese PET resin bottle grade were Russia, India, the UAE, the Philippines, and Indonesia.

Further, on April 2, 2024, the European Union also issued a final ruling on anti-dumping duties for Chinese PET resin. The impact on traditional EU countries has already been substantial, with limited additional shock expected for Chinese exports. It is anticipated that exports to Poland and Lithuania may decline in 2024, although overall figures are expected to remain significant.

From January to August 2024, the export volume of high-viscosity PET resin under tariff code 39076110 reached 3.77 million tons, marking a year-on-year increase of 28.4%. This reflects China's cost advantages in global polyester production and a recovering global economy, contributing to continued growth in PET bottle grade exports.

Context of South Korea's Anti-Dumping Measures  

The imposition of temporary anti-dumping duties by South Korea occurs within the context of its role as a significant transshipment hub for PET bottle trade. The supply and demand dynamics in the PET bottle grade market limit South Korea's willingness and ability to enforce strict anti-dumping measures against Chinese imports.

 After the formal imposition of these duties on July 30, customs data showed that in August 2024, total exports of PET bottle grade reached 610,700 tons, an increase of 36.6% year-on-year. Exports under tariff code 39076910 totaled 108,000 tons, up 60.9%, while those under code 39076110 reached 503,000 tons, a 32.3% increase. According to recent statistics, September 2024 saw Chinese PET bottle grade manufacturers receive export orders amounting to 710,000 tons, reflecting a year-on-year growth of over 26% and a month-on-month increase of 50% compared to August.

Overall Assessment of the Policy Impact  

Overall, South Korea's anti-dumping policies appear relatively moderate, with limited marginal impact on China's PET bottle grade exports, which continue to flow in international trade. China maintains the lowest production costs for PET resin manufacturing globally, particularly in overseas markets like the United States, which have long depended on imports. Consequently, anti-dumping policies are unlikely to significantly restrict Chinese PET resin exports, primarily affecting trade flows and increasing transshipment and transportation costs.

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