EC to impose 12% duty on China, Thailand PE bags

Prema Viswanathan

05-Jul-2006

UPDATE: This story has been updated with confirmation from the EC and comments from industry players.

By Prema Viswanathan

PE bagSINGAPORE (ICIS news)–The European Commission (EC) is expected to impose anti-dumping duties of up to 12% on Chinese and Thai polyethylene (PE) bag producers from 1 September, Asian converters said on Wednesday.

Duties on Chinese imports were likely to be around 10-12% while Thai producers could pay a tax of 5-6%, said one converter.

Malaysia, one of the three countries that were originally investigated, would be exempted, he added.

An EU official confirmed that member states would slap anti-dumping duties on Chinese and Thai polyethylene (PE) bag producers, and that Malaysia would be exempt. He said the formal measures would be forthcoming in the next few weeks.

Chinese PE bag producers were rushing to complete orders for delivery before the duties kicked in, said traders. This, together with tight supply in the region and the Middle East, has pushed up high-density PE (hdPE) and low-density PE (ldPE) prices.

LdPE film prices were $20-30/tonne higher than last Friday at $1,280-1,290/tonne CFR China, while hdPE film was up $10/tonne at $1,280-1,320/tonne.

Malaysian bag producers could be the beneficiary of the duties on China and Thailand, with one converter speculating that imports to the European Union (EU) could increase by as much as 30%.

A second Malaysian converter said his company’s exports to Europe had increased eight-fold to 800 tonnes/month since the start of 2006. Bigger producers, who can export up to 4,000 tonnes/month, were likely to benefit even more, he added.

Malaysia exports 140,000 tonnes/year of plastic bags in total, but that amounts to only half of China’s exports.

The plans were condemned by the British Retail Consortium (BRC) as misguided and unlikely to benefit significantly European producers.

“The EC said they have done an analysis of production costs of PE bags and export prices but we see no evidence that these bags are being sold for less than the cost of production,” said Richard Dodd of the BRC. 

However, European polyethylene producers welcomed the plans.

“Where companies are shown to have been dumping, then the EC should pursue the various corrective mechanisms with full vigour,” said Philip Law, the British Plastics Federation’s (BPF) director of public and industrial affairs.

The EC launched an investigation into PE bag exports from China, Thailand, and Malaysia on 30 June last year. This was targeted at PE bags that were less than 0.1 mm thick and contained more than 20% of PE.

In 2004, the US imposed anti-dumping duties of between 2.26% and 122.88% on retail PE bags exports from these three countries.

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