India Extends Anti-Dumping duty on Imports of Chinese Methylene Chloride

The Central Board of Indirect Taxes and Customs (CBIC) issued a notification on Tuesday, announcing the extension of anti-dumping duty (ADD) on imports of Methylene Chloride from China till January 31, 2021 unless revoked or amended earlier. Methylene chloride, also known as Dichloromethane or Methyl Dichloride (MDC) is a solvent used in the manufacture of pharmaceuticals, polycarbonate and phenolic resins, rayon yarn, agro and fragrance chemicals.

The board said that the decision has been taken after the Directorate General of Trade Remedies (DGTR) initiated the probe and found prime facia evidence regarding excessive dumping of the product in the Indian market from China. Domestic MDC manufacturers-Gujarat Fluorochemicals Ltd., TGV SRAAC Ltd (formerly known as Sree Rayalaseema Alkalies and Allied Chemicals Ltd) and Chemplast Sanmar Ltd. had filed an application before the designated authority in August 2020, alleging the negative impact of imported products in the margins and profits of the Indian manufacturers. India had first imposed the duty in May 2016. Domestic Methylene Chloride price showed a 4.4% decline (QoQ) during Q2FY21 and the product is being currently traded around INR 33.5 per kg in the Indian market. Sharp decline in prices was due to fall in upstream Chorine and Methanol values.

ChemAnalyst forecasts that MDC spreads are likely to show improvement post the imposition of ADD and the step is likely to serve as a level-playing field for domestic manufacturers as imports from China held more than 60% share of the India’s total demand in 2019.