Korea and Mexico Launch Anti-Dumping Probes, Impacting Chinese PET Resin Trade Dynamics

The anti-dumping investigation initiated by Korea against Chinese PET resin, announced on January 12th, is expected to significantly reduce the export of PET resin from China to Korea. This investigation comes after a surge in Chinese PET resin exports to Korea, driven by trade barriers imposed by the United States and Japan on Chinese PET resin from 2015 to 2017. The preliminary ruling is anticipated within three months, and the potential imposition of anti-dumping tariffs is likely to prompt a rapid decline in Chinese PET bottle chip exports to Korea.

Recently, Mexico has also announced its decision to launch an anti-dumping investigation into PET bottle chip and PET fiber chips originating from China, responding to applications from local polyester manufacturers Alpek and Indorama. The investigation specifically targets products falling under tariff codes 3907.61.01 and 3907.69.99, with a focus on PET resin and chips with viscosities ranging from 0.60 to 0.88 deciliters per gram (dL/g). This anti-dumping investigation aims to assess whether Chinese imports are being sold in Mexico below fair market value and if such practices are causing significant harm to the domestic PET industry. The applications from Alpek and Indorama signal concerns about the potential adverse effects of Chinese imports on the local polyester sector. Overall, the investigation underscores Mexico's commitment to safeguarding its domestic industry and addressing potential distortions in the market.

Before 2015, the quantity of Chinese PET resin exported to South Korea was negligible, accounting for less than 0.7% of the total. However, from 2016 onwards, the import of PET resin from China to Korea increased substantially, reaching 118,000 tons by the end of 2022, almost nine times the cumulative growth in the previous decade. In 2023, Chinese PET resin exports to Korea are projected to reach a historical high of around 150,000 tons. The anti-dumping investigation is expected to impact Chinese companies such as Hainan Yisheng Petrochemical, China Resources Chemical Materials Technology, Yisheng Dahua Petrochemical, and Zhuhai China Resources Chemical Materials Technology.

Examining the supply and demand situation in Korea, the country has two major PET resin manufacturers, TK Chemical and Lotte, with capacities of 300,000 tons and 500,000 tons, respectively. Korean PET bottle chip manufacturers may face challenges if the domestic market share is taken over by foreign competitors and the export market performs poorly, especially amid declining demand from Europe and the United States in 2023. The decline in Korean exports of PET resin between 2017 and 2023, coupled with increased competition from Chinese PET bottle chip enterprises, has prompted Korean companies to focus more on the domestic market.