April 8, 2025 – Recently, the European Commission issued an announcement. In response to the applications submitted by Lanxess Germany and RadiciGroup on January 28, it launched an anti – dumping investigation on adipic acid originating from China. The time scope of this investigation is from January 1 to December 31, 2024, and the injury investigation period starts from January 1, 2021 and lasts until the end of the dumping investigation period. As planned, the preliminary ruling result is expected to be announced within 7 months.
Last April, we discussed the frequent anti – dumping investigations faced by Chinese chemical enterprises and the signals they revealed. At that time, the situation of the trade war was becoming increasingly severe. Now, one year later, what changes have taken place? Is the trend of de – globalization still accelerating? According to AsiaMB, official data shows that among the annual anti – dumping cases against China, the number of cases in the chemical raw materials and products industry and the rubber products industry is quite substantial. In the past five years, there have been a total of 139 related cases. There were 28 cases in 2020, and the number continued to decline in the following two years. However, it started to rise again from 2023, and in 2024, the number of cases reached as high as 61, including Mexico’s anti – dumping against China’s SBS, Brazil’s anti – dumping against China’s polyether polyol, and the anti – dumping of epoxy resin by the United States and the European Union against China. As of now, 62 anti – dumping measures are still in effect, 58 are under investigation, and the rest have been closed without measures or the measures have been terminated. In terms of the countries initiating anti – dumping, India, the United States, and the European Union are the main initiators, with India accounting for the largest proportion. India’s domestic chemical production capacity is relatively weak, but its demand is extremely strong, and its anti – dumping policies often show the characteristic of “fluctuation”. For example, after India implemented the BIS policy restrictions on China’s PTA and polyester products last year, Chinese enterprises still achieved export growth by exploring emerging markets such as Turkey and Vietnam. As China breaks through trade barriers with its cost – advantage, the European and American markets have also begun to protect their domestic industries. Taking PTA as an example, China’s production cost is the lowest in the world, forcing some old – fashioned production capacities in Europe and the United States to be phased out. It is worth noting that high – value – added products have gradually become the new focus of anti – dumping. The European Union imposed a tariff of 6.6% – 24.2% on polyester chips, and 14 economies including South Korea, Mexico, and India have also successively launched relevant investigations. However, Chinese enterprises have maintained their export volume through entrepot trade. In the first five months of 2024, the export volume of polyester chips reached 2.4 million tons, a year – on – year increase of 18%.
Let’s take a look at the situation of Lanxess and RadiciGroup, the enterprises that initiated this anti – dumping. Lanxess Germany has an adipic acid production capacity of 88,000 tons, and RadiciGroup has a production capacity of 80,000 tons. The combined capacity of the two is 168,000 tons, which is only 14% of the production capacity of Huafeng, the leading adipic acid enterprise in China. Moreover, the overall profit level of adipic acid is on a downward trend. For adipic acid plants in Europe and the United States, due to much higher raw material costs, labor costs, and environmental protection costs than in Asia, the price spread of adipic acid has gradually dropped to a historical low. Since the industry profit declined from its peak in 2022, it has been in a state of almost loss. To cope with this situation, European enterprises have taken self – rescue measures one after another. After an accident at its headquarters, BASF shut down its adipic acid production capacity and gave up its second – place global market position. In February last year, Lanxess also announced a price increase of €250 per ton for adipic acid globally, citing a significant increase in raw material costs. Invista in the United States is also having a hard time. In October last year, Invista’s largest adipic acid base in the United States carried out layoffs, and another base was directly shut down and integrated with the above – mentioned base.
Facing anti – dumping barriers, China’s leading enterprises have three breakthrough paths: global layout, technological iteration, and differential competition. Many typical cases show that anti – dumping has instead forced industrial upgrading. Take the styrene market as an example. It was highly dependent on imports (with an import dependence degree of 30% in 2017). After implementing anti – dumping against South Korea, the United States, and Taiwan in 2018, domestic production capacity was rapidly released. In 2023, the import dependence degree dropped below 5%, and in March 2024, it even achieved net exports. South Korea has changed from the main importing party to China’s largest export market, accounting for 74% of China’s export volume in 2023. The styrene industry has reduced production costs to the lowest level in the world through technological upgrading. Wankai New Materials has built a 300,000 – ton polyester chip base in Nigeria, China Resources Materials’ products cover 88 countries, and Sanfangxiang focuses on non – restricted markets such as South America and Africa, all achieving “indirect export”. Experts suggest that enterprises can adopt a two – track approach: reducing costs through integrated production domestically (such as the PTA – polyester full – industry chain model of Zhenhai Refining & Chemical) and establishing multi – regional production capacities abroad (such as Wankai’s African base). Enterprises that actively adapt to rule changes often achieve unexpected growth after breaking through trade barriers. The transformation of the styrene and polyester chip industries has already verified the feasibility of this path.