The Ministry of Commerce of the People's Republic of China (MOFCOM) announced the final ruling results of the styrene monomer anti-dumping duties (ADD) investigation on 22 June, with some US companies facing the implementation of duties of up to 55% .
According to figures provided by Wood Mackenzie, the duties cover companies from South Korea, Taiwan and the US, with leading Korean firms such as Lotte Chemical, LG Chem and SK Global facing duty rates of 7.5%, 6.6% and 6.6% respectively.
In the US, Lyondell Chemical, Wastlake Styrene, Ineos Styrolutions and Americas Styrenics are facing duty rates of between 13.7% and 13.9%. “All other” suppliers, said the Wood Mackenzie report, face a duty rate of 55.7%.
Commenting on the duties, which have been preliminarily enforced since February this year, Truong Mellor, Wood Mackenzie senior research analyst, said both the US and South Korea saw a steep drop in volumes into February 2018 ahead of the preliminary tariff announcement.
“Taiwan shipped an additional 20kt, but this uptrend was quickly reversed by March. Q1 2018 has already seen a marked difference in the trade flows of styrene into China in anticipation of the preliminary ADDs, which were announced in February,” Mellor noted.
According to Mellor, US imports into China dropped from 111 kilotonnes (kt) in the first quarter of 2017 to just under 65kt in the first quarter this year.
Similarly, South Korea imports into China more than halved in the first quarter of this year at 111kt, compared to 255kt in 2017.
Taiwan imports into the country, edged up from 65kt in the first quarter of 2017 to just under 70kt this year, said Mellor, adding that last year's numbers were impacted by turnaround activity.
Speculating over where these volumes were being diverted to, the Wood Mackenzie analyst said a bulk of US exports, which were slightly higher year-on-year at 352kt in the first quarter, were destined for Mexico.
Close to 70kt of product moved into western Europe compared to 5kt the previous year, noted Mellor.
And Turkey absorbed a 20kt shipment, compared to nothing over the same period last year.
The higher final duty numbers, warned the analyst, will likely accelerate this trend going forward. European suppliers must therefore “carefully manage” the balance, “either through higher exports into the Mediterranean, Asia or by trimming back domestic operating rates.”
He further noted that South Korea has begun moving export volumes into other countries within Asia since late last year.
Close to 30kt have been shipped to India since December 2017, he added.
While exports have increased to Malaysia, Japan and Thailand, the amount has not been enough to counteract the drop in China-bound volumes, totalling around 175kt from January-May 2018, Mellor added.
As for Taiwan, volumes have been increasingly moving to South Korea, India, Hong Kong and Vietnam.