EU ADD against Chinese PET bottle chip generally digested, pay attention to whether RPET can be removed

Early April 2024, the European Commission announced the final ruling on the anti-dumping investigation of Polyethylene Terephthalate (PET) originating from China, imposing anti-dumping duties ranging from 6.6% to 24.2% on the products involved, with specific rates detailed in the attached table. The products in question are Polyethylene Terephthalate with a viscosity equal to or greater than 78 milliliters/gram. The EU CN (Combined Nomenclature) code for the products is 3907 61 00 (TARIC code 3907 61 00 10). The announced rates were actually preliminarily indicated in the announcement on November 28, 2023, with rates set at 6.6% for Sanfame, 10.7% for Wankai, 17.2% for China Resources, and 11.1-24.2% for other companies (specific rates can be found in the final table).

Since the initiation of the anti-dumping investigation on PET bottle chip from China by the EU early March in 2023, the export volume from mainland China to EU has significantly decreased. Taking Italy as one of the main destination markets, Chinese customs data shows that Italy imports from China were at 10,267 tons in January 2023, while dropped to 1.1 tons by December. Similarly, imports from China to countries like France and Belgium have notably declined.

However, looking at the export data from the past two years, despite the EU conducting anti-dumping investigations on Chinese companies since 2023, the export volume from China to Poland, a member state of the EU, has been increasing annually. It is understood that a portion of these exports are re-exported from Poland to Ukraine. Since the Russia-Ukraine conflict, trade channels in eastern and northern Ukraine have been largely blocked, leading Ukraine to rely on the EU and the Middle East to meet its domestic demand. The import of PET bottle chip from China to Poland increased from 5.4 thousand tons in 2021 to 81.5 thousand tons in 2023, representing a growth rate of 1409%.

Based on historical data, the European Union has sporadically conducted anti-dumping investigations on PET bottle chip originating from mainland China over the years. Since the removal of the previous anti-dumping duties in 2017, Chinese PET bottle chip companies have once again increased their exports to the EU. From expanding exports in 2018 to reaching a historical high of around 440,000 tons in 2022, to another anti-dumping investigation in 2023, there has been a gap of about four to five years. This period coincides with a gradual improvement in the global supply and demand structure of the PET bottle chip industry, with no new overseas facilities added and some being phased out, further widening the cost gap between the Asia, America, and Europe regions, highlighting the advantage of Chinese export enterprises.

In general, Chinese PET bottle chip companies are gradually expanding their business in other regions, and the impact of the EU's imposition of anti-dumping duties on Chinese PET bottle chip has largely diminished last year. It can be said that the current practices of Europe and America ultimately complicate trade flows rather than completely block Chinese exports. Furthermore, it is important to note that as RPET does not have a separate tariff code, and food grade rPET chips are also levied anti-dumping duties together with virgin PET resin. Despite the EU tariff code being 39076100, which translates to polyethylene terephthalate with a viscosity equal to or greater than 0.78 ml/g, sources indicate that anti-dumping duties are also imposed on PET resin with viscosity below 0.78 ml/g (0.76-0.78 part) without any apparent policy loopholes.

Figure 1. EU final anti-dumping duty on polyethylene terephthalate