Impact of Indonesian anti-dumping investigation against Chinese homo PP

The Indonesian Anti-Dumping Committee (KADI) has initiated an antidumping investigation on imported Polypropylene Homopolymer products included in tariff postal number 3902.10.40 (BTKI 2022) imported from Saudi Arabia, the Philippines, South Korea, Malaysia, and the People's Republic of China, Singapore, Thailand, and Vietnam.

So, if the anti-dumping measure is established, what will be the impact on China's PP exports?

1. Continued expansion of domestic production capacity

In recent years, China's PP production capacity has continued to expand. By the end of 2024, China's PP production capacity is expected to reach 42.685 million tons/year. As market competition intensifies, domestic spot prices have already become a global lowland. Imports are gradually shrinking, and exports increase. Against the background of difficult improvement in domestic demand, expanding exports is undoubtedly an important way for enterprises to reduce pressure.

2. China's import and export situation

The import dependence of PP has been declining year by year. In 2023, it was about 11.21%, and from January to October 2024, it was about 9.61%. Judging from historical data, the import and export situation has obviously changed in 2020-2021. In 2021, the PP import volume decreased by about 26.80% compared with 2020, while the export volume increased by about 223.41%. Subsequently, the import volume has been declining year by year, and the export volume remains high. In 2024, the export volume has increased significantly again. From January to October, the export volume has reached 2.0232 million tons, and the annual export volume is expected to reach 2.3-2.5 million tons. With the change in the import and export situation, China's net import volume of PP has rapidly decreased.

3. China's export of homo PP to Indonesia

From the perspective of export structure, homo PP accounts for the vast majority of total PP exports, basically remaining above 85%.

Among homo PP exports, the proportion flowing to Indonesia has increased in recent years. At present, it can be said to be China's second largest trading partner. In 2023, the export volume was about 91.4kt, accounting for about 7.95%. From January to October 2024, the export volume was about 158.5kt, accounting for about 8.71%. Generally speaking, although the proportion is not high at present, it cannot be underestimated.

At present, it is still unknown whether the anti-dumping measure will be established, including the countermeasures after the hypothetical establishment. Traders are suggested to pay attention to follow-up news in time. If it is established, it will be a big blow to domestic enterprises.