ID :
41961
Wed, 01/21/2009 - 15:34
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https://www.oananews.org//node/41961
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(News Focus) Chinese petrochemical makers accuse S. Korean firms of dumping
By Nam Kwang-sik
SEOUL, Jan. 21 (Yonhap) -- Petrochemical makers from South Korea and China have
been in a heated dispute over complaints by the Chinese makers that cheaper South
Korean products eroded their earnings, industry sources said Wednesday.
The specific petrochemical products in dispute are terephtalic acid (TPA),
polypropylene (PP) and polyethylene (PE), all raw materials used to make plastic
bottles, textiles and plastic shopping bags, government officials said.
The Chinese companies say that since July of last year, when falling oil prices
pulled down the price of petrochemical products, South Korean manufacturers began
exporting their products to China at below market prices.
Several South Korean companies, including LG Chem Ltd., Honam Petrochemical Corp.
and Samsung Total Petrochemicals Corp., have been accused of dumping in China.
According to Platts, which provides energy and commodities information, South
Korean polypropylene imports represented 32.5 percent, or 81,000 tons, of China's
total imports, while polyethylene accounted for 20.1 percent, or 64,400 tons, in
September of last year. Prices of manufactured goods, however, using the South
Korean imports were on average at least 700 yuan (US$102) cheaper than Chinese
products.
Chinese petrochemical giants Sinopec and China National Petroleum Corp. suffered
huge losses this year, hit by falling exports and cheaper petrochemical imports
from South Korean companies, Platts added.
On Jan. 9, South Korea's Ministry of Knowledge Economy received a notice from its
Chinese counterpart that several Chinese petrochemical makers had proposed
launching an anti-dumping investigation into South Korean TPA.
"The notice is not official. China's Department of Commerce notified us only of
the fact that the Chinese manufacturers called for an anti-dumping probe on the
TPA produced by South Korean makers," said an official at the ministry speaking
on condition of anonymity.
"If China officially opens an anti-dumping investigation into our products, it
will first send to us formal documents, including the list of the Chinese
companies that lodged the anti-dumping complaint," the official added.
Six South Korean TPA manufacturers -- Samsung Petrochemical Co., Samnam
Petrochemical Co., Taekwang Industrial Co., KP Chemical Corp., SK Petrochemical
and Hyosung Corp. -- have been named in the dispute. Their combined exports to
China amounted at about 2.8 billion won last year.
The two countries' petrochemical makers will begin discussions on settling the
trade dispute in Beijing beginning Wednesday, the sources said.
Meanwhile, a South Korean delegation led by the Korea Petrochemical Industry
Association (KPIA) held two-day talks in Beijing on Dec. 15 of last year to seek
a resolution to the dispute over the prices of PP and PE with officials from the
China Petroleum and Chemical Industry Association, according to an official at
KPIA.
Both sides, however, failed to reach a consensus and say they plan to hold
additional talks in the near future.
If China rules in favor of the local manufacturers, Korean petrochemical makers
will be hit by stiff sanctions, market watchers say.
"Nearly all South Korean petrochemical makers produce petrochemicals such as PP
and PE. If China imposes anti-dumping sanctions on them, it will cause huge
losses in their earnings," said J.J. Kim, an analyst at Woori Investment
Securities Co.
One market watcher who asked not to be identified said local petrochemical
producers would have to find a new market if such sanctions were put in place.
"About 25 percent of petrochemicals produced in South Korea are exported to
China. If exports to China are blocked, local petrochemical makers will have to
find alternative markets or they will have no option but to shut down their
plants," he added.
In 2000, China imposed safeguard measures on South Korean PE imports in
retaliation for South Korea's ban on Chinese-made tofu.
South Korean PE plants ceased operations for one month following the measures.
This year's outlook for South Korea's petrochemical producers is grim due to
slumping exports and slowing global demand, according to the KPIA.
Exports of petrochemicals are predicted to fall by 3.1 percent to $31.2 billion
from 2008, while imports will drop 4.1 percent to $11.7 billion.
ksnam@yna.co.kr
(END)
SEOUL, Jan. 21 (Yonhap) -- Petrochemical makers from South Korea and China have
been in a heated dispute over complaints by the Chinese makers that cheaper South
Korean products eroded their earnings, industry sources said Wednesday.
The specific petrochemical products in dispute are terephtalic acid (TPA),
polypropylene (PP) and polyethylene (PE), all raw materials used to make plastic
bottles, textiles and plastic shopping bags, government officials said.
The Chinese companies say that since July of last year, when falling oil prices
pulled down the price of petrochemical products, South Korean manufacturers began
exporting their products to China at below market prices.
Several South Korean companies, including LG Chem Ltd., Honam Petrochemical Corp.
and Samsung Total Petrochemicals Corp., have been accused of dumping in China.
According to Platts, which provides energy and commodities information, South
Korean polypropylene imports represented 32.5 percent, or 81,000 tons, of China's
total imports, while polyethylene accounted for 20.1 percent, or 64,400 tons, in
September of last year. Prices of manufactured goods, however, using the South
Korean imports were on average at least 700 yuan (US$102) cheaper than Chinese
products.
Chinese petrochemical giants Sinopec and China National Petroleum Corp. suffered
huge losses this year, hit by falling exports and cheaper petrochemical imports
from South Korean companies, Platts added.
On Jan. 9, South Korea's Ministry of Knowledge Economy received a notice from its
Chinese counterpart that several Chinese petrochemical makers had proposed
launching an anti-dumping investigation into South Korean TPA.
"The notice is not official. China's Department of Commerce notified us only of
the fact that the Chinese manufacturers called for an anti-dumping probe on the
TPA produced by South Korean makers," said an official at the ministry speaking
on condition of anonymity.
"If China officially opens an anti-dumping investigation into our products, it
will first send to us formal documents, including the list of the Chinese
companies that lodged the anti-dumping complaint," the official added.
Six South Korean TPA manufacturers -- Samsung Petrochemical Co., Samnam
Petrochemical Co., Taekwang Industrial Co., KP Chemical Corp., SK Petrochemical
and Hyosung Corp. -- have been named in the dispute. Their combined exports to
China amounted at about 2.8 billion won last year.
The two countries' petrochemical makers will begin discussions on settling the
trade dispute in Beijing beginning Wednesday, the sources said.
Meanwhile, a South Korean delegation led by the Korea Petrochemical Industry
Association (KPIA) held two-day talks in Beijing on Dec. 15 of last year to seek
a resolution to the dispute over the prices of PP and PE with officials from the
China Petroleum and Chemical Industry Association, according to an official at
KPIA.
Both sides, however, failed to reach a consensus and say they plan to hold
additional talks in the near future.
If China rules in favor of the local manufacturers, Korean petrochemical makers
will be hit by stiff sanctions, market watchers say.
"Nearly all South Korean petrochemical makers produce petrochemicals such as PP
and PE. If China imposes anti-dumping sanctions on them, it will cause huge
losses in their earnings," said J.J. Kim, an analyst at Woori Investment
Securities Co.
One market watcher who asked not to be identified said local petrochemical
producers would have to find a new market if such sanctions were put in place.
"About 25 percent of petrochemicals produced in South Korea are exported to
China. If exports to China are blocked, local petrochemical makers will have to
find alternative markets or they will have no option but to shut down their
plants," he added.
In 2000, China imposed safeguard measures on South Korean PE imports in
retaliation for South Korea's ban on Chinese-made tofu.
South Korean PE plants ceased operations for one month following the measures.
This year's outlook for South Korea's petrochemical producers is grim due to
slumping exports and slowing global demand, according to the KPIA.
Exports of petrochemicals are predicted to fall by 3.1 percent to $31.2 billion
from 2008, while imports will drop 4.1 percent to $11.7 billion.
ksnam@yna.co.kr
(END)
