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India TDI Anti-dumping Policy Indicates a Fiercer Competition

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PUdaily, Shanghai- On June 5, Indian Authority decides to impose anti-dumping duty on imported TDI products from China, Japan and South Korea for 6 month. Anti-dumping duty rate to China is USD 260/ton, Japan USD 140/ton, and South Korea USD 170-400/ton (involving USD 170/ton duty rate to Hanwha, USD 310/ton to BASF, as well as USD 400/ton to others). Why does India make such decision on this occasion? And how will it influence the whole market? 

 The reason for anti-dumping 
        
  GNFC, with a capacity of 67 kt/year, is the only TDI plant in India. In addition to the local supply, it exports 30-40% to the Middle East and Africa. And yet its sales in these regions is doom to be imperiled by the coming Sadara from Saudi Arabia. Also, considering its lower influence and acceptance in Asia-Pacific region than Japanese and Korean plants, anti-dumping policy is the most effective and cost-saving way to ensure domestic sales.

Influence to Supply-Demand Relation in India 

  GNCF is able to meet its 50 kt/year domestic demand as long as it maintains regular operation. However, the facility failure may impede the regular production of downstream factories. 
      
  As such, downstream factories would rather adjust the proportion between import and local supply than stop import completely to avoid the supply suspension. PUdaily has learned from a large foam producer that India used to adopt a proportion of 6:4 between local supply and import and now turn to 8:2. Most TDI plants are equipped with warehouses in Singapore for transfer to reduce the time for transport. 

 Attitudes of TDI Plants in China, Japan and Korea 
        
 The anti-dumping policy is to lower the positivity of TDI supply from these countries. According to the newly baked survey of PUdaily, a Korean factory has made a clear decision that it would not export to India any more. Some Chinese companies who was interested in this emerging market shifted to a wait and see stance. Those who have old customers in India chose to remain the previous supply for the being and adjust strategy generally. 
     
 And for Sadara, the policy is a favorable news. First, the policy promote GNFC to give more supply to local market while reducing supply to the Middle East. Moreover, Sadara is out of the anti-dumping list. Saudi Arabia roles an origin of crude oil for India , and it is closer to India than countries in SE Asia geographically. Given these factors, Sadara TDI has the possibility to take the market share of Japanese and Korean ones when the policy is being conducted. 

 The Policy Showcases a Fiercer Global Competition on TDI 

 As mentioned above, Chinese plants is holding a wait and see stance foremost. The phenomenon is mainly ascribed to no frequent customers and small demand in India. What's more important is that few plants have systematic plan on export. Notwithstanding the remarkable export of China in 2016, most orders came from customer's inquiry but not their own exploration on overseas market. 

 The anti-dumping has not laid significant impact on Chinese plants, though. The policy suggests that Asia-Pacific and even the whole world is involved in an ever-intensifying competition. 

 In the end of this year, Sadara, the joint venture of Dow and Saudi Aramco, is to supply TDI, and Middle East, Africa as well as Europe will be given priority. Then, the Chinese, Japanese and South Korean sources will suffer most. Adapt from these regions, Asia-Pacific is also a target. As a major destination, China is likely to eye a huge impact if Sadara chooses to adopt a low-price strategy placed by its costs advantage, despite the its small amount. 

 Besides, Wanhua 30 kt/year TDI facility is to be started in the second half of 2018. It will have acted as the largest integreted equipment by that time. Together with its original accumulation and brand influence, the industry is anticipated to see a new round of reshufflue. 

Threatened by a serious of challenges, both internal and external, PUdaily believes it's time for domestic TDI plants to make a systematic purpose for sales at both home and abroad so as to have a good preparation for the fiercer competition in the coming 2018.