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On back of antidumping duty, PTA capacity may rise
Aug '10
China's PTA industry has finally got an opportunity to come out of the vicious cycle of cheap PTA imports. Xianglu Petrochemical Company had lodged a complaint with the designated authorities against PTA imports originating from South Korea and Thailand.

The Ministry of Commerce has issued the final ruling after 20 months, in favour of domestic PTA producers by imposing antidumping duties on PTA imports from these two countries.

This cognizance of the existence of dumping PTA into China, originating in Thailand and South Korea is the first successful anti-dumping case launched by Chinese enterprises in Xiamen, the involved amount is US $3.6 billion, also the largest one among international anti-dumping cases in history.

PTA is the most important chemical raw material of polyester industry and the main raw material of beverage packaging industry. PTA production capacity in China has reached 15.5 million tons and accounts for 41 percent of the total production capacity in Asia, and 34 percent of total production capacity in the world.

However, China's domestic PTA demand is huge, due to which several countries like South Korea, Thailand, Japan, Malaysia, Mexico and others have targeted the Chinese market, to fill up the demand-supply gap.

The economic condition of Xianglu Petrochemical began to deteriorate sharply in 2007. The second phase of its 1.5 million tons PTA project, originally planned for starting construction in 2008 had to be canceled. The company also had to reduce its workforce for the first time in its history in 2008.

In the same year, China's largest PTA plant owned by Hualian Sanxin, too was forced to restructure its operations due to the dumping of PTA. Domestic PTA industry suffered industry-wide losses for the first time in 2007. Investigations revealed that, the main reason for the industry downturn was, large dumping of PTA at low cost by South Korea and Thailand.

On December 12, 2008, Xianglu Petrochemical was forced to take the initiative and lodged a complaint to launch anti-dumping action against PTA imports from South Korea, Thailand. On August 11, 2010, the Customs Tariff Commission of the State Council decided to levy anti-dumping tax on PTA imports originating in South Korea and Thailand, with rates ranging between 2-20.1 percent.

In the next 3 to 5 years, China's PTA production capacity may increase from 41 percent to over 61 percent of the total production capacity in Asia. PTA industry will put its focus again on industrial innovation through information and logistics integration and the industry will enhance its competitiveness.

Fibre2fashion News Desk - China

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