Stock Prices of Korean Chemical Companies Fell for Anti-dumping Duties

Aekyung Petrochemical’s stock price fell 7.47% and closed at 11,150 won (US$9.5) per share. The stock prices of many other South Korean chemical product manufacturers fell that day, too. For instance, Korea Petrochemical, Hanwha Chemical, Lotte Chemical and LG Chem lost 4.26%, 4.22%, 4.08% and 2.96%, respectively.

This has to do with the U.S. Department of Commerce’s decision to impose preliminary anti-dumping duties on South Korean plasticizer manufacturers and exporters. The U.S. Department of Commerce decided on January 27 to impose a preliminary anti-dumping duty of 3.96% on Aekyung Petrochemical and 5.75% on LG Chem, claiming that these companies sold their plasticizers at prices lower than the fair price in the U.S. market.

In addition, the Department of Commerce decided to levy an anti-dumping duty of 4.47% on every company producing and exporting a plasticizer from South Korea to the United States. At present, South Korean companies’ share in the U.S. plasticizer market is as high as 56%.

According to industry experts, the imposition of the tariffs is likely to have a rather limited impact on the stock prices of the South Korean companies. This is because plasticizers are a main business item for only a small number of South Korean companies and their plasticizer exports to the U.S. market are not so great both in amount and value. For example, LG Chem exports less than 6,000 tons of plasticizer to the U.S. a year, worth less than 10 billion won (US$8.5 million) and approximately 0.05% of its annual sales. Aekyung Petrochemical’s annual plasticizer export amounts to 450,000 tons but the shipment to the U.S. is only about 20,000 tons.