Punching Bag of Protectionist Trade Policy
Last month, the Indian government imposed anti-dumping duties on toluene diisocyanate (TDI) South Korean companies produced and exported to India. The duties are US$220, US$310 and US$440 per ton for Hanwha Chemical, BASF Korea and OCI, respectively. The annual TDI production capacity of BASF Korea is 160,000 tons and those of Hanwha Chemical and OCI are 150,000 tons and 50,000 tons, respectively.
Anti-dumping duties were imposed on Chinese and Japanese TDI manufacturers as well. However, the amounts stood at US$260 per ton for Chinese and US$150 per ton for Japanese. “TDI has become one of the most important business items for those South Korean companies as its price is soaring these days,” said an industry source, adding, “The impact of the duties seems to be rather limited as the Indian market is not their major market yet.” TDI, a raw material of polyurethane, is used for the production of vehicle seats, mattresses, paints, building insulation materials, etc. China is currently the largest customer, but India is one of the markets with the largest growth potential given its 1.2 billion population.
According to those in the industry, the Indian government is likely to continue to impose import restrictions for a while and the next target is likely to be dioctyl phthalate (DOP). The Indian government held a public hearing last month to discuss anti-dumping duties on DOP and is going to make a determination in March this year. According to the Central Board of Excise and Customs (CBEC), India imposed a total of 42 anti-dumping duties on Chinese products last year. The number is likely to increase sharply this year and South Korean companies may get involved against their will.
Nowadays, South Korean chemical as well as steel products are being targeted by the protectionist trade policy of an increasing number of governments. Last year, the United States slapped anti-dumping duties on ESBR rubber and dioctyl terephthalate (DOTP) imported from South Korea. In addition, investigations are ongoing on silicon solar cells, polyester staple fibers, PET resin and so on. China is currently looking into methyl isobutyl ketone, styrene and nitrile rubber while conducting a reinvestigation on acrylic fibers. Decisions on most of the issues are likely to be made within this year.