Korea’s petrochemical industry divided over Chinese styrene imports

[Courtesy of each company]

South Korea’s petrochemical industry is engaged in an intensifying dispute over Chinese styrene imports.

According to multiple industry sources on Monday, a trade council under the Ministry of Trade, Industry, and Energy held a stakeholder meeting on June 27 on styrene imports from China. The meeting was part of the ministry‘s investigation into allegations of styrene dumping from China that began on April 9.

Styrene is a raw material for synthetic resins that can increase the elasticity of materials. It is also used to produce polystyrene (PS) and acrylonitrile butadiene styrene (ABS).

In the meeting, Hanwha TotalEnergies Petrochemical Co. and Yeocheon NCC Co. were in favor of imposing anti-dumping tariffs on Chinese imported styrene. The companies argue that they suffer severe operating losses due to overcapacity and low-cost exports in China, both of which they say lead to market prices falling below production costs.

Yeocheon NCC is a 50:50 venture between Hanwha Solutions Corp. and DL Chemical Co.

LG Chem Ltd. and other counterparts, on the other hand, opposed tariffs on styrene from China, saying there have been many other importers of styrene, including Japan and Taiwan.

They point out that as styrene has been traded at international prices, imposing anti-dumping duties only on Chinese imports risks trade rifts.

LG Chem has been phasing out its styrene production since 2019 and recently signed a contract with Lotte Chemical Corp to ensure long-term supply of styrene.

The trade council is expected to announce a preliminary decision on imposing anti-dumping duties on Chinese styrene by September 9.