China Chemical Reporter

2003‐ISSUE30 (2003/10)

Chinese Enterprises Win PVC Antidumping Case
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On Sept. 29 the Ministry of Commerce made a final ruling on the PVC antidumping case lodged by Chinese enterprises. Chinese enterprises won the case and relevant departments of the state will impose antidumping tax on the import of PVC originated from the four countries of the United States, Korea, Japan and Russia, as well as from Taiwan Province.
5 Chinese enterprises including Shanghai Chlor-alkali Chemical Co., Ltd.(上海クロルアルカリ）, Hebei Cangzhou Chemical Industry Group Co., Ltd.（滄州化工実業）, Beijing No. 2 Chemical Co., Ltd.（北京化工�U廠）, Jinhua Chemical Group Co., Ltd. （錦化化工集団）and Tianjin Dagu Chemical Co., Ltd.（天津大沽化工） lodged the PVC antidumping case to the former Ministry of Foreign Trade and Economic Cooperation on March 1, 2002 on behalf of the Chinese PVC sector. It was stated in the complaint that the increase of the export made by foreign PVC producers to the Chinese market through price reduction caused drastic price drop of domestic PVC products and difficult product sales in Chinese enterprises and seriously endangered the development of the PVC sector in China.
These 5 enterprises are major PVC producers in China. The capacity of PVC is 320 000 t/a in Shanghai Chlor-alkali Chemical Co., Ltd., 290 000 t/a in Hebei Cangzhou Chemical Industry Group Co., Ltd., 300 000 t/a in Tianjin Dagu Chemical Co., Ltd., 130 000 t/a in Jinhua Chemical Group and 160 000 t/a in Beijing No.2 Chemical Co., Ltd. The output of PVC in these 5 enterprises in 2002 held the first, the second, the third, the sixth and the seventh place respectively in China and accounted for 33% of the national total.
The victory gained by the Chinese PVC producers in the antidumping case will produce a positive impact on the future performance of the Chinese enterprises. If a minimum 10% antidumping tax is levied according to the final ruling, the average price of domestic PVC products can increase by 5 - 10%.
As a matter of fact, since the decision made by the former Ministry of Foreign Trade and Economic Cooperation on launching investigation and the preliminary ruling made by the Ministry of Commerce in May this year the performance of the 4 listed PVC companies has already made an improvement. These 4 companies have published performance statements for the first half of 2003. The net profit in Beijing No. 2 Chemical Co., Ltd. was 102% higher than the same period of last year. The net profit in Hebei Cangzhou Chemical Industry Group Co., Ltd. was 92.39% higher.
As Shanghai Chlor-alkali Chemical Co., Ltd. only made a thin profit last year, the net profit reaped in the first half of this year was 10107.73% higher. There has been no wage increase for workers in Shanghai Chlor-alkali Chemical Co., Ltd. for 7 years, but the wage increase can hopefully be effected this year. Jinhua Chemical Group Co., Ltd. suffered a loss of RMB74.81 million in the first half of last year, but the loss was already reduced by more than RMB53 million in the first half of this year.
Qilu Petrochemical(斎魯石油化工), whose 2002 PVC output ranked the fourth, has not joined lodging. A source from the company thought that antidumping on PVC may damage consumption. Korea-based Tianjin LG Dagu (天津ＬＧ大沽)ranked the fifth in 2002.