Asian polymer market shrugs off China's new preferential PE import duties
By Wong Wen Yin, Chua Sok Peng in Singapore
February 20, 2013 - Asia's polymer market has shrugged off China's new preferential import
duties for polyethylene from some countries, as the minimum price for the tax
reduction to kick in is seen as too high and trade flows from these nations
are almost negligible.
Effective January 1, 2013, China cut the polyethylene import duty
for Least Developed Countries to 3%, from 6.5%, provided the landed prices of
low density PE and high density PE from these countries exceed $3,800/mt on a
But market sources said the impact is minimal as historically, HDPE and
LDPE prices have never hit $3,800/mt CFR Far East Asia and polymer exports
from these countries are negligible. (See related graph: HDPE vs LDPE, CFR FEA ($/mt): January 8, 2008 - February 20, 2013).
"It is very rare for HDPE and LDPE to hit such a price level. Maybe
there are some specialty grades for medical use which are able to hit
$3,800/mt CFR China but it is very rare for commodity grade. In addition,
these countries doesn't export to China. The impact is almost zero," said a
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Prices of HDPE-film and LDPE have never crossed $3,800/mt CFR Far East
Asia since Platts started assessing them in May 2006 and April 1983
The all-time highs recorded for HDPE-film and LDPE prices were $1,825/mt
CFR Far East Asia and $1,945/mt CFR Far East Asia respectively, on July 16,
Platts data showed.
Asian HDPE film prices closed the week ending February 15
at $1,490/mt CFR FEA (basis China) the highest since September 2008, while Asian
LDPE closed at $1,463/mt CFR FEA.
According to data from China's General Administration of Customs, the
country's average import price of LDPE in 2012 was $1,430/mt, CIF basis, with
imports of 1.57 million mt for the year.
Total HDPE imports in 2012 was 4 million mt,
averaging $1,376/mt, CIF.
Meanwhile, countries that will be eligible for the preferential import
tax rate are almost nearly absent from China's historical trade data.
China's main import sources of HDPE and LDPE are Saudi Arabia, Iran and South Korea.
Only Sudan was seen as an import source of HDPE for China in 2012, at a
total volume of 0.85 mt for the year with imports landed in China in April
and June, historical data from China's customs bureau showed.
According to the United Nation's definition, a country would be named
Least Developed Country if its three-year average gross national income per
capita falls below $750, has weak human resources and economic vulnerability.
Forty-eight countries fall under this category, with 33 of them in the
Some countries that fall into the category are Laos, Sudan and Yemen.
Next page: China set to get influx of Iran-origin PE after 3-month hiatus