A financial crisis sweeping over the world exacerbates market players' anxieties. Global polyolefin industry suffers from slackening demand. China, as the market with huge potentials, attracts numerous players' attentions. Producers in Korea, the US, the Middle East and other places are looking more at the Chinese market for export orders. In the last month of 2008 and first two months of 2009, Chinese polyolefin imports increased sharply, domestic prices remained on a losing streak and producers suffered from decreasing profits. Besides, rumours are flying that anti-dumping investigation will be launched on PP/PE imports. If this is true, imports from which countries will be included? How about the process and impact on domestic market? In this context, CBI China provides the Given Anti-dumping Investigation on Imported PP/PE----Series Reports and probes into the issue with you together!

Firstly, what is anti-dumping?
Anti-dumping means taking measures with intentions to discourage importation and sale of foreign-made goods at prices substantially below domestic prices for the same items. But before the measures taken, three conditions must be confirmed: first, dumping exists actually; second, dumping does damages or has damaging threat to domestic industries, or hampers development of relevant industries; third, cause and effect relationship between dumping and damages must be confirmed.

The first condition: dumping exists actually:
A product is considered as being dumped given export prices lower than its normal values. The normal values refer to the comparable prices of the like products in the exporting countries in the ordinary course of trade. Given unavailability of equitable prices in the exporting countries, the normal values shall be export prices of the like products from the exporting country to the third country.

The second condition: damages and treats by dumping:
Damages and threats by dumping are mainly assessed from output, operating rates, sales volume, market shares, profits, sales revenue and other aspects. With a purpose to know whether Chinese polyolefin industry is influenced or not, CBI China analyses the industry in terms of selling prices, profits, output, operating rates, import volume and market shares.

Selling prices and profits
Usually, import prices are higher than domestic prices, but the situation changed in the second half of 2008. According to CBI statistics, CFR offers were far lower than domestic prices during September 2008 to February 2009. Taking imported HDPE film as an example, in June, CFR converted prices were CNY1,000/tonne lower than domestic prices and the gap was widened to CNY2,500/tonne in middle November. As a result, imports poured into China.

The calculation method to convert CFR prices into CNY prices is as follows:
CFR converted prices= (CFR prices*(1+tarrif rate)*(1+VAT)+charges)* exchange rate
Tariff rate=0.065; VAT=0.17; Charges=19.4; exchange rates vary on a daily basis.